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Midwich has revealed that it has been battered by the coronavirus storm, but is starting to plan for the future with the firm belief that the audiovisual (AV) industry is well placed to survive in the changing landscape.
The impact of the pandemic was clearIn the AV-focused distributor’s interim results for the six months to 30 June, with revenues down by 4% to £302m and adjusted profit before tax down by 76.6% to £3.2m.
Market watchers reacting to the numbers accepted the toll that the virus had taken, but pointed out that there was no structural damage to the firm and its prospects remained solid.
Stephen Fenby, managing director of Midwich Group, said Covid-19 had caused problems for the entire AV sector and had dominated its first half.
“The coronavirus pandemic represents the biggest shock to our business sector,” he said. “As the crisis unfolded, we took decisive action to protect our teams, preserve cash and support our customers and vendors. These continue to be our key priorities as the pandemic continues and will optimally position the group as the recovery continues to gather pace.”
Clearly the impact of the virus can be seen in the Midwich’s interim numbers for the first half of 2020, but Fenby indicated that the business had been able to weather the storm.
“Although significantly impacted, our market strength, combined with the diversity of our group in terms of geographical spread, vendor breadth, technology focus and end user markets, have partially mitigated the negative impact of the crisis,” he said.
Midwich is increasingly looking forward and wants to strike a more optimistic tone for investors, with the channel player keen to stress that the future is going to be brighter.
“In recent weeks, whilst we continue to monitor the pandemic, we have increasingly shifted our focus to the future – bringing back our teams, re-opening offices and resuming some face-to-face customer interactions,” said Fenby.
“We have launched new vendor relationships and further developed our expertise in the unified communications sector. Our acquisition programme has also recommenced, with a number of exciting opportunities in the pipeline. Group revenues have improved month on month since April,” he added.
That hint at future acquisitions could see the firm building on the deal it struck in February for Indiana-based AV distributor Starin, which marked the firm’s first business in North America.
“The coronavirus pandemic has been a shock to the global economy, however we believe that the AV industry is well placed for the future. We see no overall change in long-term prospects for the industry. Although some segments of the market may be slower to recover, other trends, such as the increased adoption of UC [unified communications], have unsurprisingly accelerated,” he added.
Fenby said partners had given the firm “incredible support” in recent months and it was looking forward “to returning to our previous financial performance as quickly as possible and continuing our long-term growth trajectory”.