Midwich ends bumper year above expectations

Audio-visual trade distribution specialist Midwich Group said in an update on Wednesday that it finished 2022 “strongly”, adding that it now expected to report full-year revenue of £1.2bn, making for year-on-year growth of 40%.

The AIM-traded firm said growth was 39% at constant currency, while organic growth was over 20%, as its gross margin remained “broadly in line” with 2021 levels.

As a result of its strong performance, the board said it now anticipated reporting adjusted profit before tax for 2022 “comfortably ahead” of market consensus.

Adjusted net debt at year-end was under £100m, representing around 1.7x adjusted EBITDA, in line with its own expectations.

Cash generation was between 50% and 60%, which was also in line with the board's expectations given the group's strong revenue growth.

In order to support the delivery of its acquisition pipeline, in December the company increased its revolving credit facility to £175m from £80m.

“2022 saw the strongest annual growth in the group's history, with revenue increasing by over 40% to £1.2bn,” said group managing director Stephen Fenby.

“This significant revenue growth led to a record profit performance, for which I would like to thank the team and our partners for their continued support.

“Despite continued general economic uncertainty and rising interest rates, the strength of the business and expected growth of the AV market lead the board to look forward to 2023 and beyond with confidence.”

Midwich said it would announce its final results for the year ended 31 December on 14 March.

At 1257 GMT, shares in Midwich Group were up 10.16% at 542p.

Reporting by Josh White for Sharecast.com.