REG - Midwich Group PLC - Year End Trading Update

MidwichAnnouncement

18/01/2023 07:00

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RNS Number : 0330N  Midwich Group PLC  18 January 2023

18 January 2023

Midwich Group plc

("Midwich" or the "Group")

 

Year End Trading Update

 

Record revenue of £1.2 billion, with profit before tax ahead of expectations
and

the Group well placed for the year ahead

 

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 2022.

 

The Group finished the year strongly and the Board now expects to report
record revenue for 2022 of £1.2 billion, representing growth of
approximately 40% over the prior year (39% at constant currency), with organic
growth of over 20%.  The gross margin was broadly in line with 2021 levels.

 

As a result of this strong performance, the Board now anticipates reporting
adjusted profit before tax for the 2022 period comfortably ahead of market
consensus*.

 

Adjusted net debt** at the end of the year was under £100 million
(representing approximately 1.7 times adjusted EBITDA***), in line with the
Board's expectations. Cash generation was between 50% and 60%, which was also
in line with the Board's expectations given the Group's strong revenue growth.

 

In order to support the delivery of its acquisition pipeline, in December 2022
the Group increased its revolving credit facility from £80 million to £175
million.

 

Stephen Fenby, the Group Managing Director, commented:

 

"2022 saw the strongest annual growth in the Group's history, with revenue
increasing by over 40% to £1.2 billion.  This significant revenue growth led
to a record profit performance, for which I would like to thank the team and
our partners for their continued support.

 

Despite continued general economic uncertainty and rising interest rates, the
strength of the business and expected growth of the AV market lead the Board
to look forward to 2023 and beyond with confidence."

 

Midwich will announce its final results for the year ended 31 December
2022 on 14 March 2023.

 

*Market consensus based on an average of £40.8m and a range of £40.1m to
£41.2m, as at 17 January 2023

** 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 and
amortisation and 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 / Arnav Kapoor
 FTI Consulting                                         +44 (0) 20 3727 1000

Alex Beagley / Tom Hufton / Rafaella de Freitas

 

About Midwich Group

 

Midwich is a specialist AV distributor to the trade market, with operations in
the UK and Ireland, EMEA, Asia Pacific and North America. The Group's
long-standing relationships with over 600 vendors, including blue-chip
organisations, support a comprehensive product portfolio across major audio
visual categories such as large format displays, projectors, digital signage
and professional audio. The Group operates as the sole or largest in-country
distributor for a number of its vendors in their respective product sets.

 

The Directors attribute this position to the Group's technical expertise,
extensive product knowledge and strong customer service offering built up over
a number of years. The Group has a large and diverse base of over 20,000
customers, most of which are professional AV integrators and IT resellers
serving sectors such as corporate, education, retail, residential and
hospitality. Although the Group does not sell directly to end users, it
believes that the majority of its products are used by commercial and
educational establishments rather than consumers.

 

Initially a UK only distributor, the Group now has around 1,600 employees
across the UK and Ireland, EMEA, Asia Pacific and North America. A core
component of the Group's growth strategy is further expansion of its
international operations and footprint into strategically targeted
jurisdictions.

 

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

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