Midwich's profit up 48% after continental expansion

Specialist audio-visual distributor Midwich saw its shares dip on Tuesday despite posting double digit growth across the board in its interim results.

For the six months ended 30 June the company’s profit before tax jumped 48% to £11.9m as revenue increased by 25% to £264.1m after acquisitions helped to boost results.

Stephen Fenby, managing director of Midwich, said: "The strong performance reported in the first half, coupled with positive sales momentum and strong contributions from recent acquisitions, gives the board confidence that the group will report full year results in line with its revised expectations, which were upgraded at the time of the group's trading statement on 20 July 2018."

Earpro in Iberia and Gebroeders van Domburg in Benelux were acquired in March 2017 and September 2017 respectively, and have "traded well" and catalysed 49.7% growth in adjusted operating profit from continental Europe.

The AIM traded company declared an interim dividend of 4.6p per share, up 10% on-year.

"We have been busy working on opportunities to extend the group's reach and capabilities through the period and were pleased to complete the acquisitions of New Media and Perfect Sound after the period end. The pipeline for strategic acquisitions across the territories in which we operate remains strong and we will continue our disciplined approach," said Fenby.

In response to the results, broker Cannacord said growth prospects look "excellent", reflecting underlying growth in professional audio visual markets, the likelihood of further market share gains and excellent acquisition potential given the fragmented nature of AV markets.

Midwich’s shares, which have gained more than 70% over the past 12 months, were down 5.19% at 640.00p at 1157 BST.