Midwich Group PLC – Interim Results

Midwich Group PLC – Interim Results

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

Six months ended

30 June 2018

30 June 2017

% change

Revenue

264,099

211,564

25%

Gross profit

42,879

32,433

32%

Gross profit %

16.2%

15.3%

Operating profit

11,026

8,729

26%

Adjusted operating profit

13,452

10,533

28%

Adjusted operating profit %

5.1%

5.0%

Profit before tax

11,854

8,033

48%

Adjusted profit before tax

13,030

10,253

27%

Adjusted profit before tax %

4.9%

4.8%

Profit after tax

9,118

5,812

57%

Adjusted profit after tax

9,783

8,032

22%

Reported EPS

11.32p

7.04p

61%

Adjusted EPS

12.09p

9.84p

23%

Interim dividend per share

4.60p

4.17p

10%

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. 

Stephen Fenby, Managing Director of Midwich Group plc, commented:

“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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