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Audio visual distributor Midwich has said that even with the coronavirus pandemic raging, it has managed to finish the second half of its fiscal year strongly.
An end-of-year trading update from the firm issued to investors gave details of how the past few months have gone, with November and December being particularly good.
Midwich is now expecting to report revenue in excess of £710m for 2020 as a whole, representing annual growth of 4%. Pre-tax profits should be around £14m, which is well ahead of expectations.
Even before the distributor had closed out its fourth quarter, market watchers noted that although the pandemic had impacted organic growth and margins, it had not caused the firm any structural damage and the balance sheet had been kept in good shape. It was also clear back in September that monthly run rates were back at 2019 levels, increasing further towards the end of the year.
Midwich said sales before acquisitions were taken into account were 7% lower in the second half of the year, compared with 2019. Because of the 22% drop in the first half, the overall decline will end up at 14% for the year.
Stephen Fenby, group managing director of Midwich, said the firm had made progress in what had been “a very challenging year for both the world economy and our industry”.
He added: “Despite significant challenges, we managed to continue our long-term year-on-year revenue growth. Although markets for many of our higher-margin product areas were significantly depressed, and continue to be so, I am pleased that the group was able to grow its share of the business available. This demonstrates that our service levels have remained high and that we are well placed to capitalise on future market demand when it returns fully.”
During the year, Midwich picked up Starin Marketing in the US in February 2020, followed last month by a move to bolster its operations in the Middle East with the acquisition of NMK.
“As a result of these acquisitions, the group now has a foothold in all strategically important global regions and will look to build on that presence in the years to come,” said Fenby. “Our enhanced team represents by far the strongest in the industry and our acquisition pipeline remains healthy.
“The group has made substantial progress in acquiring new brands while also exiting from lower-margin or unprofitable relationships. In particular, we have enhanced our offering in the unified communications, collaboration and audio segments through the year.”