Two profit lines, one business

Midwich Group, the AIM-listed specialist distributor of audio visual equipment to trade customers, reports two sets of profit figures, and the distance between them matters for anyone reading its accounts. (LSE:MIDW) In its interim results for the six months to 30 June 2026, published on 22 September, adjusted operating profit was £17.0 million while statutory operating profit was £10.3 million.

The gap has narrowed sharply from a year earlier, when adjusted operating profit of £16.6 million compared with a statutory figure of just £4.7 million. (LSE:MIDW) At pre-tax level the group moved to a statutory profit of £4.3 million from a £3.0 million loss, while adjusted profit before tax rose 10.3% to £10.6 million. Revenue increased 3.2% to £640.3 million.

What sits between the numbers

The company sets out the bridge in its income statement. (LSE:MIDW) The largest single item in the half was Amortisation of acquired brands, customer relationships and supplier relationships, at £6.1 million against £7.1 million a year earlier. This is a non-cash charge arising from the acquisitions that built the group, and it should decline as older intangibles are written off.

Share-based payments and associated employer taxes accounted for a further £1.4 million. items produced a net Credit of £0.5 million in the income statement, which the commentary rounds to £0.6 million: an insurance recovery of £2.1 million relating to stock lost in the Dubai Warehouse fire in late 2024, partly offset by £1.5 million of restructuring costs from overhead reduction programmes. (LSE:MIDW) The prior-year half carried a £3.1 million charge.

The audited comparative for 2025 shows how volatile the reconciliation can be: items of £38.3 million that year left the group with a full-year statutory operating loss of £14.9 million, against adjusted operating profit of £43.6 million.

Why the distinction matters

On our reading, the narrowing gap in the first half is a constructive sign, because statutory profit is now positive and the recurring adjustments are mainly amortisation and share awards rather than fresh one-off charges. Even so, restructuring costs recur in several periods, and investors may wish to judge for themselves how they are.

The adjusted figures also drive the Leverage measure that the lending covenants reference. Adjusted net Debt was £138.1 million at 30 June, equal to 2.4 times adjusted EBITDA, which management expects to fall to about 2.0 times by year end. Including £20.6 million of Lease liabilities, total net debt was £158.7 million. The revolving credit Facility of £175 million runs to June 2028, with covenants of three times leverage and four times interest cover.

Shareholder register and Capital returns

A notification published on 2 November 2026 showed that Morgan Stanley's voting rights in Midwich had risen to 10.86% on 27 October, from 9.10% at its previous notification. The holding sits with Morgan Stanley Capital Services, and the filing does not explain the purpose of the position, so we draw no conclusion.

Separately, the board said in September that it was considering a share buyback under its existing authority, likely incremental to the ordinary dividend, with a further announcement if and when appropriate. No programme had been announced in the LSE listing reviewed. The 1.9p interim Dividend is due on 6 November 2026.

Risks and next steps

The board said conditions would remain challenging for the rest of 2026, with the Middle East conflict creating a range of second-half scenarios and Germany still difficult. It expects full-year adjusted profit before tax in line with expectations if recent progress continues, which is guidance rather than a result.

The LSE delayed price for the 3 November 2026 session, was 160.0p. The next scheduled milestones are the dividend payment and any decision on a buyback.