Midwich expects ‘record performance in challenging market’

Midwich Group plc expects to report record revenue for 2023 of around £1.3bn, according to a trading update issued today.

The figure represents growth of approximately 7% year on year (6% at constant currency), with organic revenue in line with the prior year.

A positive product mix resulted in a gross margin of around 16.8%, exceeding pre-Covid levels.

The Midwich Group board anticipates reporting adjusted profit before tax of approximately £50 million in line with market expectations.

There was strong cash generation in the year, of around 100% of adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), ahead of long-term expectations of 70%-80%. Adjusted net debt at 31 December 2023 was  around £90m (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 Group will announce its final results for the year ended 31 December 2023 on 19 March 2024.