This announcement contains inside
information for the purposes of the market abuse regulation (EU No.
596/2014) as it forms part of United Kingdom domestic law by virtue
of the European Union (Withdrawal) Act 2018, as
amended.
21 October
2024
Midwich Group
plc
("Midwich" or the "Group")
Trading
Update
Midwich Group (AIM: MIDW), a global
specialist audio visual distributor to the trade market, is today
providing a trading update and revised guidance for the year ending
31 December 2024.
At our Interim Results, issued on 3
September 2024, we highlighted the challenging market conditions
experienced in the first half of the year, with market survey data
indicating a return to growth in mainstream products during the
second half.
In recent weeks, whilst the UK
market has stabilised, and performance in the North American
region, as well as demand in the live events and entertainment
sectors remains strong, broader market conditions have not improved
as anticipated. In particular, Germany has seen a further
deterioration and there remains subdued demand for mainstream
products, primarily in the education and corporate
markets.
We now expect current market
conditions to persist for at least the rest of the year. Given the
challenging AV market backdrop, the Board now expects full year
Group revenue to be marginally ahead of the prior year.
In line with the Group's stated
strategy, the continued progress in product mix in favour of
technical video, audio and lighting products, is expected to result
in full year Group gross margins in line with the record levels
achieved in the first half.
The previously announced overhead
reduction programme is also well progressed. However, whilst these
overhead reductions will support increased operating profit margins
in the second half of the year onwards, the Board expects adjusted
operating profit for 2024 to be significantly below the prior year,
reflecting the operational gearing of the business.
In recent weeks, the Group has
completed three small specialist acquisitions in the UK for a total
combined cash consideration of £12m. These higher margin technical
businesses operate primarily in the live events and fire security
markets. The total consideration paid, when combined with the usual
second half operating cash inflow, is expected to result in
year-end leverage of around 2.2 times adjusted EBITDA. The Group
remains well within its debt covenant levels.
Despite the continuing challenging
market conditions, the Group remains well positioned, has continued
to grow market share in its key markets since the half year and
will seek to drive further revenue mix towards technical product
sales. The Board remains confident in the future prospects of the
Group.
Midwich expects to release a
scheduled year-end trading update on 20 January 2025.
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)
Carlton Nelson / Ben
Griffiths
|
+44
(0) 20 7597 5970
|
|
Berenberg (Joint Broker to
Midwich)
Ben Wright / Richard Andrews
|
+44
(0) 20 3207 7800
|
|
FTI
Consulting
Alex Beagley / Tom Hufton / Matthew Young
|
+44
(0) 20 3727 1000
|
About Midwich Group
Specialisation at scale.
Midwich Group is a network of
businesses which partner with the world's leading technology
companies to accelerate their growth. Selling into over 50
countries from 23 global locations, the Group specialises in
audiovisual technology - whether in state-of-the-art meeting rooms
or on a festival main stage, our solutions help the world connect,
communicate, or experience wow moments.
Taking technology further.
With services ranging from product
distribution to complex system design, focused marketing campaigns
to flexible financing solutions, and showcase events to seed
funding for startups, the Group's ever-expanding offering is
designed to add value and solve its partners' biggest
challenges.
This has enabled the Group to
maintain strong relationships with global manufacturers and a
diverse customer base of over 21,000, including professional
integrators, event production companies and IT resellers in sectors
such as education, corporate, retail and live events.
Enabling tomorrow.
With over 1,900 employees across the
UK and Ireland, EMEA, Asia Pacific and North America, the company
is committed to being a responsible employer.
The Group wants to do the right
thing and actively works to limit its impact on the environment and
communities, and recognises the importance of giving back - find
out more about our sustainability activities
here.
Help us go further, together.
Visit https://midwichgroupplc.com