REG - Midwich Group PLC - Trading Statement

MidwichAnnouncement

20/01/2025 07:00

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RNS Number : 8558T  Midwich Group PLC  20 January 2025

This announcement contains inside information for the purposes of the market
abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic
law by virtue of the European Union (Withdrawal) Act 2018, as amended.

20 January 2025

 

Midwich Group plc

("Midwich" or the "Group")

 

Year End Trading Update

 

Robust Performance in a Challenging Market

 

Midwich Group plc (AIM: MIDW), a global specialist audio visual distributor to
the trade market, is today providing a trading update for the year ended 31
December 2024.

 

The Group's revenue finished slightly over £1.3 billion, which was marginally
ahead of prior year, and in line with guidance provided in the Group's trading
update in October 2024. Overall revenue growth was approximately 2% (3% at
constant currency), with organic revenue approximately 1% below the prior
year. Further positive product mix shift resulted in a gross margin of
c.17.1%, which was an annual record, but slightly below H1 2024 and the
Board's expectation for the full year. Overheads were in line with
expectations, but the lower gross margin resulted in expected adjusted profit
before tax being slightly below market consensus*.

 

The Group delivered strong cash generation in the year, of around 90% of
adjusted EBITDA, ahead of our long-term expectations of 70-80%. Adjusted net
debt** at 31 December 2024 was c.£130 million (representing approximately 2.1
times adjusted EBITDA***).

 

Stephen Fenby, Group Managing Director, commented:

 

"Challenging market conditions continued throughout the year, and the
anticipated return to growth in mainstream products in the second half did not
materialise. Excess product supply has continued to drive price erosion,
particularly in display categories, and this, combined with some aggressive
supplier activity, impacted gross margins in the second half.

 

The Group's long term focus on higher margin, more specialist product areas
such as technical video, audio and lighting has helped to mitigate the impact
of continued softness in more mainstream categories. I would like to thank all
of my colleagues across the Group, together with our customers and vendor
partners for their continued support.

 

Whilst the broader market backdrop remains challenging, the Group continues to
look for and exploit new growth opportunities, as well as retaining a tight
focus on overhead efficiencies. I believe the Group remains well positioned to
continue to deliver both organic and inorganic growth in the longer term."

 

Midwich will announce its final results for the year ended 31 December 2024 on
18 March 2025.

 

*Market consensus based on an average of £40.2m and a range of £40.0m to
£40.5m, as at 17 January 2025

** Adjusted net debt is borrowings less cash and cash equivalents and
excludes IFRS 16 lease liabilities

*** Adjusted EBITDA represents operating profit before acquisition related
expenses, share based payments and associated employer taxes, depreciation,
amortisation and impairments and, for leverage purposes, includes a proforma
twelve-month contribution from acquisitions

 

For further information:

 

 Midwich Group plc                                       +44 (0) 1379 649200

Stephen Fenby, Managing Director

Stephen Lamb, Finance Director
 Investec Bank plc (NOMAD and Joint Broker to Midwich)   +44 (0) 20 7597 5970

 Carlton Nelson / Ben Griffiths
 Berenberg (Joint Broker to Midwich)                     +44 (0) 20 3207 7800

Ben Wright / Richard Andrews
 FTI Consulting                                          +44 (0) 20 3727 1000

Alex Beagley / Tom Hufton / Matthew Young

 

About Midwich Group

 

Specialisation at scale.

Midwich Group is a network of businesses which partner with the world's
leading technology companies to accelerate their growth. Selling into over 50
countries from 23 global locations, the Group specialises in audiovisual
technology - whether in state-of-the-art meeting rooms or on a festival main
stage, our solutions help the world connect, communicate, or experience wow
moments.

Taking technology further.

With services ranging from product distribution to complex system design,
focused marketing campaigns to flexible financing solutions, and showcase
events to seed funding for startups, the Group's ever-expanding offering is
designed to add value and solve its partners' biggest challenges.

This has enabled the Group to maintain strong relationships with global
manufacturers and a diverse customer base of over 21,000, including
professional integrators, event production companies and IT resellers in
sectors such as education, corporate, retail and live events.

Enabling tomorrow.

With over 1,900 employees across the UK and Ireland, EMEA, Asia Pacific and
North America, the company is committed to being a responsible employer.

The Group wants to do the right thing and actively works to limit its impact
on the environment and communities, and recognises the importance of giving
back - find out more about our sustainability activities here
(https://midwichgroupplc.com/sustainability/) .

 

For further information, please visit www.midwichgroupplc.com
(http://www.midwichgroupplc.com/)

 

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