Midwich profits rebound in H1

Audiovisual specialist Midwich benefits hugely from the steady ‘return to normal’ worldwide, with the restrictions around offices and events starting to ease

Midwich Group has benefited from the world starting to return to a more normal footing, with audiovisual orders rising as offices and venues reopen.

The distributor shared preliminary first-half (H1) results, for the six months ended 30 June, revealing that it had delivered profits on the back of lockdown restrictions easing.

The first half of last year saw the firm reporting losses after tax of £2.8m, but this time around the firm delivered £4.6m in profit, representing a 263% year-on-year (YoY) improvement. Revenues were also up by a decent margin at 29%, rising to £390.1m.

The firm used its trading update to inform investors of its ongoing recovery, and tthat rading momentum was continuing as more of the venues and activities that required audiovisual solutions reopened.

H1 also included the firm’s first acquisition in the Middle East, NMK Group, to expand its geographical coverage. It revealed that there was a strong pipeline of further purchases across several regions.

“Trading in EMEA [Europe, Middle East and Afirca] showed the greatest improvement, particularly in Germany and France. After a slow start due to a severe lockdown, the UK and Ireland division improved strongly across the period, with revenues in the month of June 2021 reaching the 2019 level. Acquisitions made strong positive contributions in the period, and we have seen a significant number of new opportunities presented,” said Stephen Fenby, managing director of Midwich Group.

Given the enforced closures of business, calls for staff across the world to work from home and the numerous restrictions on live events, the past 18 months have been difficult for channel players focused on providing screens and display technology.

Fenby indicated in his comments accompanying the latest financial update that the market had improved as more of those restrictions were lifted, and the impact this has had on the company’s fortunes is clearly visible in the H1 performance.

“The higher margin live events and hospitality markets are starting to recover in a number of territories, although we believe there is still a considerable way to go. The recovery of the corporate market has been slightly slower than expected, as corporates have in some cases deferred their return-to-office plans,” he said.

“There is a more significant level of enquiries and activity in this market, and we now expect that this will start to be converted into orders and revenue in early 2022.”

There was some caution around the impact of shortages, which have caused so many headaches across the channel: “The board believes that the group’s markets and business should continue to improve steadily across the remainder of 2021 and into 2022, although there remains a risk of negative impact due to further lockdowns. 

“Shortages of product appear to be worsening and are having a dampening effect on revenues, albeit such impacts should be temporary and not affect the general growth trajectory of the business.”

Overall, the one of the update was positive, noting that trading since H1 ended had been in line with expectations and ahead of the same period last year.

“Order books have continued to strengthen and – barring significant lockdowns in key territories – the board expects trading to be comfortably ahead of its previous expectations,” said Fenby.

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