Midwich flags record-breaking revenue in 2023

17th Jan 2024 14:06

(Sharecast News) - Specialist audiovisual distributor Midwich Group reported a strong 2023 performance in a trading update on Wednesday, culminating in record-breaking revenue of £1.3bn, making for 7% growth year-on-year, or 6% when adjusting for currency fluctuations.

The AIM-traded firm said organic revenue remained in line with the prior year's figures.

It said its positive product mix contributed to a gross margin of 16.8%, surpassing pre-Covid levels.

The company added that it expected to report an adjusted profit before tax of around £50m, in line with market expectations.

Midwich said it also saw robust cash generation during the year, surpassing long-term expectations.

Cash generation reached around 100%, exceeding the projected 70% to 80% of adjusted EBITDA.

As of 31 December, the firm reported adjusted net debt of £90m, equivalent to around 1.3 times adjusted EBITDA.

"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," said group managing director Stephen Fenby.

"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 merger and acquisition 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."

Fenby said generating a record performance in a tough market took an "exceptional" team.

"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 said it would announce its final results for the year ended 31 December on 19 March.

At 1334 GMT, shares in Midwich Group were down 6% at 376p.

Reporting by Josh White for Sharecast.com.