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Highlights

  • Midwich Group’s H1FY24 revenue rose 5.8% compared to H1FY23
  • Gross profit for H1FY24 increased 12.2%, driven by record gross margins and technical product sales
  • FY24 revenue exceeded GBP 1.3 billion, reflecting 2% growth despite a decline in organic revenue

Midwich Group PLC (LSE:MIDW) is a UK-based distributor of audiovisual (AV) products, serving the trade market across Europe, Africa, the Middle East, the UK, Ireland, Asia Pacific, and North America.

H1FY24 Financial Performance

In the first half of the fiscal year 2024 (H1FY24), the company reported revenue of GBP 646.1 million. It reflects a 5.8% increase compared to H1FY23, or a 7.5% rise on a constant currency basis. However, organic revenue saw a slight decline of 1.2%, with good growth in North America but slightly lower performance in other regions.

Gross profit for the period reached GBP 111.8 million, a 12.2% increase from the previous corresponding period, driven by a record gross margin of 17.3%, up 1 percentage point from H1FY23. This improvement was particularly higher in North America and EMEA, driven by a higher proportion of technical product sales from recent acquisitions.

Recent Business Update

In the FY24 trading update, the company reported revenue of over GBP 1.3 billion, marking a 2% growth (3% at constant currency). While organic revenue declined by 1%, the focus on higher-margin products helped mitigate the challenges faced in the market. The company achieved a record gross margin of 17.1%, though it was slightly lower than H1FY24 due to price erosion in display categories and supplier pressures. Cash generation reached 90% of adjusted EBITDA, surpassing expectations, while adjusted net debt remained stable at GBP 130 million, reflecting a ratio of 2.1x adjusted EBITDA and efficient financial management.

Company Outlook

The company’s overhead reduction program is almost complete and is expected to save over GBP 5 million annually starting from FY25. Despite economic challenges, the board expects full-year performance to meet previous expectations. This is supported by strategic initiatives and operational efficiencies.

Stock Information

The stock price of MIDW has increased by approximately 2.35% over the past week. However, in the longer term, the stock has declined by around 10% in the past three months and 20.42% in the past six months. The stock’s 52-week range is from GBX 251.00 to GBX 450.13. As of 17 February 2025, the stock closed at GBX 261.00, which is below the average of its 52-week high and low.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 17 February 2025. The reference data in this report has been partly sourced from EODHD/Others.