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Impact of coronavirus seen in Midwich FY numbers
Audio visual distributor saw a year of two halves, but has been able to indicate to investors that things are continuing to improve
The impact of the coronavirus pandemic was apparent in Midwich’s full-year numbers, with the audio visual distributor reporting pre-tax losses for 2020.
Investors will not be panicking, though, because the channel player saw a year of two halves, with the last six months beating expectations and showing signs that the worst is over.
Unaudited full-year figures showed that revenues for the 12 months ended 31 December improved by 3.7% to hit £711.8m, but pre-tax losses came in at £1m, compared with a profit of £23.8m the year before.
April seems to have been the low point – at the height of the first lockdown – with Midwich reporting that after that month, group revenues improved consistently, and it was able to reduce organic revenue decline of 22% in the first half to 7% in the second half.
The message from Midwich chief executive Stephen Fenby was around a narrative of improvement in the second half and of decisions made with acquisitions that would bolster its prospects in 2021.
“2020 was a challenging year for everyone and I would like to take this opportunity to thank all of our employees, partners and suppliers for their tireless hard work and continued support,” said Fenby. “We delivered a robust performance in the year, thanks to our proven business model and our position as a true value-add distributor in the global AV market.”
He added that the year had included the company’s move in February, with the purchase of Starin Marketing, into the US, which he described as “the world’s largest AV market”. Midwich has kept that geographical expansion going, with a move into the Middle East this year with the acquisition of NMK Electronics.
The distributor also updated investors on progress of the integration of deals it struck in 2019 – Prase in Italy, MobilePro in Switzerland and Norwegian distributor AV Partner – indicating that those firms were all now making a positive impact to the business.
Midwich also increased its focus on unified communications capabilities, adding a number of new vendors to support that ambition.
“While we have experienced a slowdown in some of our sectors, we have also witnessed improved performances in others and our results in the second half of the year exceeded the board’s expectations,” said Fenby.
The trading update also included more reassurance, with the firm describing its trading since the year-end being in line with expectations. It also revealed that it continued “to have a strong acquisition pipeline across a number of regions and technologies”.
Fenby added: “We are well placed through our diversified geographical and multi-sector footprint, combined with long-term vendor relationships, to continue to deliver growth and take advantage of market opportunities, both organically and through acquisition.”