Midwich Group has announced its interim results for the six months ended 30 June 2023 (H1 2023) which shows revenue growth of 7.4 per cent and adjusted operating profit improving by 30.9 per cent compared to H1 2022.
The company reported increased revenue to £610.4m with organic growth of 2.3 per cent, improvement in gross margins to 16.3 per cent from 14.9 per cent, and adjusted operating profit of £26.4m, up from £20.2m in H1 2022. The results were
Since the end of the reporting period, the Group has acquired Toolfarm.com, Inc and Digital Media Promos (trading as 76 Media) in the US; HHB Communications Holdings Limited and Pulse Cinemas Holdings Limited in the UK; and Video Digital Soluciones S.L. in Spain. The aggregate cash spent (net of cash acquired) on these transactions was £18m. The board stated that it expects this momentum to continue for the remainder of the year.
“Our performance in H1 2023 was strong, with the Group delivering revenue growth of 7.4 per cent and adjusted operating profit improving by 30.9 per cent compared with H1 2022, despite continued challenging market conditions in a number of key markets,” reported Stephen Fenby, managing director of Midwich Group plc. “Particularly notable was the significant improvement in our gross profit percentage, moving from 14.9 per cent in H1 2022 to 16.3 per cent in H1 2023 and our adjusted operating profit percentage which increased from 3.6 per cent to 4.3 per cent. Higher interest charges impacted our adjusted profit before tax, which nonetheless still increased by 13.4 per cent to £21.8 million in the period.”
“Slower than expected corporate and education markets were more than compensated for by strength in the live event and entertainment sectors. The change in mix attributable to the significant growth of technical video and audio products resulted in a favourable product margin mix,” he continued.
“The EMEA region performed particularly well, with strong improvements in organic revenue, gross margin and adjusted operating profit. Although general macro-economic conditions are widely expected to remain challenging over the coming months, the Group continues to be well placed to identify and benefit from organic and inorganic business development opportunities. I believe our demonstrable track record of performing well despite challenging broader economic conditions is a testament to the quality of our business and our ability to grow market share profitably. Furthermore, our order books remain strong and as a result the Board’s expectations for the full year remain unchanged.”