TIDMMIDW
RNS Number : 9112Z
Midwich Group PLC
17 January 2024
17 January 2024
Midwich Group plc
("Midwich" or the "Group")
Year End Trading Update
Record 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 2023.
The Group finished the year well and the Board now expects to
report record revenue for 2023 of c.GBP1.3 billion, representing
growth of approximately 7% over the prior year (6% at constant
currency), with organic revenue in line with the prior year.
Positive product mix resulted in gross margin of c.16.8%, exceeding
pre-Covid levels. The Board anticipates reporting adjusted profit
before tax of approximately GBP50 million, which is in line with
market expectations*.
The Group delivered strong cash generation in the year, of
around 100%, ahead of our long-term expectations of 70-80% of
adjusted EBITDA. Adjusted net debt** at 31 December 2023 was
c.GBP90 million (representing approximately 1.3 times adjusted
EBITDA***).
Stephen Fenby, Group Managing Director, commented:
"After two years of exceptional revenue growth, the market
backdrop throughout 2023 was much more challenging, with demand for
our more mainstream AV products impacted significantly in many
territories. We responded to this by focusing on our technical
product categories, completing a record seven acquisitions in 2023
and ending the year with a strong M&A pipeline.
I am delighted to report that the Group delivered the highest
revenue, gross margins and adjusted profit before tax in its
history and, I believe, we made further market share gains in our
biggest regions. Generating a record performance in a tough market
takes an exceptional team and I would like to thank each of my
colleagues together with our customers and vendor partners for
their continued support.
Whilst the broader market backdrop remains uncertain, the recent
acquisitions have integrated well and continue to trade broadly in
line with our expectations. Consequently, the Group remains well
positioned to continue to deliver both organic and inorganic growth
in 2024 and the longer term."
Midwich will announce its final results for the year ended 31
December 2023 on 19 March 2024.
*Market consensus based on an average of GBP50.3m and a range of
GBP49.4m to GBP51.0m, as at 16 January 2024
** 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
Stephen Fenby, Managing Director
Stephen Lamb, Finance Director +44 (0) 1379 649200
Investec Bank plc (NOMAD and Joint Broker
to Midwich) +44 (0) 20 7597
Carlton Nelson / Ben Griffiths 5970
Berenberg (Joint Broker to Midwich) +44 (0) 20 3207
Ben Wright / Richard Andrews 7800
FTI Consulting +44 (0) 20 3727
Alex Beagley / Tom Hufton 1000
About Midwich Group
Midwich Group is a specialist AV distributor, 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 displays,
projectors, technical AV, broadcast, professional audio, lighting
and unified communications. 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 22,000 trade customers, most of which are
professional AV integrators and IT resellers serving sectors such
as corporate, education, retail, residential and hospitality.
Initially a UK only distributor, the Group now has over 1,900
employees across the UK and Ireland, EMEA, North America and Asia
Pacific. 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
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