Midwich records "strong" double-digit revenue growth as profits smash past £42 million

Across the board financial success for audio visual distributor in the six-months ending 30 June 2018
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Midwich, a specialist audio visual distributor to the trade market, today announces its interim results for the six-months ended 30 June 2018.

The results, which cover all regions (UK and Ireland, France, Germany, Iberia, Benelux, and Australasia), show revenues increased by 24.8 per cent to £264.1 million, up from £211.5 in the same period last year. This reflects a trio of acquisitions in 2017 in the firm's display and technical product categories. 

Gross profit increased significantly, topping £42.8 million, up 32.2 per cent (£32.4m) in the same timeline.

Stephen Fenby, managing director of Midwich Group plc said: “The Group has had another strong first half and I am pleased with the performance across all of our territories. The increase in the Group’s gross margin percentage reflects both growth in the core business and a significant contribution from the three acquisitions made in 2017 in our displays and technical product categories. The more specialist nature of the acquired businesses ensures that our value add to customers and vendors continues to increase.

“We have been busy working on opportunities to extend the Group’s reach and capabilities through the period and were pleased to complete the acquisitions of New Media and Perfect Sound after the period end. The pipeline for strategic acquisitions across the territories in which we operate remains strong and we will continue our disciplined approach to add value while both strengthening and diversifying our product offering.

“The strong performance reported in the first half, coupled with positive sales momentum and strong contributions from recent acquisitions, gives the Board confidence that the Group will report full year results in line with its revised expectations, which were upgraded at the time of the Group's trading statement on 20 July 2018.”

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Financial highlights

• Revenue increased by 24.8% to £264.1 million (24.3% on constant currency basis)

• Gross profit margin of 16.2%, a 0.9 percentage point increase on H1 2017

• Adjusted operating profit increased by 27.7% to £13.5 million (27.4% on constant currency basis)

• Adjusted profit before tax improved by 27.1% to £13.0 million (26.7% on constant currency basis)

• Operating cash flow reflects planned investment in working capital to support organic growth and

seasonal trends in working capital cycle

• Progressive dividend policy maintained with 10.3% increase in Interim dividend to 4.60 pence per share (H1 2017: 4.17 pence per share)

Operational highlights

• Double digit revenue and profit growth in all territories

• Investment in new geographies and development of specialist broadcast, lighting and audio segments

enhancing both revenue growth and gross margin

• Recent acquisitions have performed well with a positive impact on the Group gross profit margin

• Strong acquisition pipeline across a number of regions

Post-period highlights

• August 2018 – Acquisition of Bauer & Trummer GmbH (trading as New Media), a leading distributor of

professional video and broadcast equipment based in Nuremberg, Germany and operating across the

German, Austrian and Swiss markets;

• September 2018 – Acquisition of Sound Directions France SAS (trading as Perfect Sound), a small

specialist audio distributor based in St Etienne, France.

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