Highlights

  • Midwich Group achieved a 5.8% revenue increase, reaching GBP 646.1 million in H1FY24
  • Gross profit rose 12.2% YoY to GBP 111.8 million in H1FY24, driven by higher technical product sales
  • The company anticipates full-year revenue above 2023 levels but expects a profit decline
  • Midwich expects market recovery in the second half, supported by acquisitions and cost efficiencies

Midwich Group PLC (LSE:MIDW), an FTSE AIM UK 50 Index company, specializes in distributing audiovisual (AV) products to the trade market.

In the first half of the financial year 2024 (H1FY24), Midwich Group achieved a 5.8% increase in revenue, reaching GBP 646.1 million, compared to GBP 610.4 million in H1FY23. On a constant currency basis, revenue grew by 7.5%, although organic revenue declined by 1.2%. North America saw strong organic growth, while other regions experienced slight declines. The group believes its performance exceeded overall market declines, maintaining or growing market share in key regions.

Gross profit also saw a notable rise in H1FY24, increasing by 12.2% YoY to GBP 111.8 million from GBP 99.6 million in the prior year. The gross margin reached a record 17.3%, up 1 percentage point from H1FY23. The company recorded significant improvements in EMEA and North America in H1FY24, driven by a higher proportion of technical product sales, following recent acquisitions.

Recent Business Update

Midwich Group faces several market challenges, particularly in Germany, where conditions remain weaker than expected. While the UK market has stabilized and North America shows strong performance, demand in the education and corporate sectors is expected to remain subdued through 2024. As a result, the Group anticipates full-year revenue to be slightly above 2023 levels, but adjusted operating profit is expected to fall due to operational gearing. However, Midwich’s strategic focus on higher-margin technical products is helping sustain gross margins at record H1 levels. Recent acquisitions in the UK bolster the live events and fire security segments, strengthening long-term prospects. The Group will release its year-end trading update on 20 January 2025.

Company Outlook

Midwich Group expects challenging macroeconomic conditions in key markets like the UK and Ireland through 2024. However, the company anticipates a recovery in mainstream product demand in the second half of the year. The group remains confident in achieving its adjusted operating profit targets, supported by a strong vendor pipeline, bolt-on acquisitions, and cost efficiencies.

Despite expected market softness in early 2024, industry research predicts a 5.4% annual growth in the AV market through 2029. Midwich’s focus on specialist segments is expected to help sustain margins and create long-term growth opportunities.

Top 10 Shareholders

The top 10 shareholders of Midwich Group hold approximately 68.33% of total shares. Stephen Barry Fenby holds the largest stake with about 16.85%, followed by Liontrust Investment Partners LLP at around 13.74%.

Price Performance

The stock has experienced a modest rise of approximately 1.07% over the past month but has declined by around 23.78% over the last six months. It has a 52-week low of GBX 254.00 and a 52-week high of GBX 450.13 and is currently trading below the average of these two values. As of 23 December 2024, the stock's closing price was GBX 282.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 23 December 2024. The reference data in this report has been partly sourced from EODHD/Others.