Audiovisual specialist Midwich has become the latest distributor to break through the £1bn revenue barrier, after enjoying a solid fiscal year.
The firm has shared results for 2022 that showed significant growth in revenues, delivering a 40% improvement on the prior year to move onto £1.2bn from £856m.
A combination of organic growth and a contribution from acquisitions, DVS and Nimans, played their roles in that performance – both of those purchases added to the bottom line, and have now been fully integrated into the group.
The firm also delivered an increase in adjusted profit before tax, with growth of 41.5% to £45.2m, and gross profit margins remained flat year on year at 15.3%.
Stephen Fenby, managing director of Midwich Group, concentrated on the revenue milestone reached by the business in 2022. “We have delivered an outstanding performance this year, with revenues increasing 40.7% to over £1.2bn – a record level – made significant market share gains, and new markets entered,” he said. “2022 saw the strongest annual growth in the group’s history.”
As well as contributing to revenue, the other benefit of the DVS and Nimans deals were to expand the markets Midwich operated in to include more data, unified comms and connectivity.
“Our organic growth of 20.7% (2021: 18.9%) was supplemented by a significant contribution from the two UK businesses acquired early in the year,” said Fenby. “EPS in 2022 was 26.6% higher than in 2019 – the last full pre-pandemic year.”
The audiovisual sector was one of the hardest hit by the pandemic, as public events were cancelled and large displays used in sporting and transport hubs were switched off.
That salutation has largely reversed, and Fenby added that the audiovisual market had recovered from the worst of the challenges of the past couple of years and that growth could be seen in its numbers.
“The impact of the pandemic reduced somewhat in the period, with product shortages easing (but not completely) and the cost of shipping containers reducing significantly during the year,” he said. “We saw the resumption of a significant part of the live events and hospitality markets, and the corporate market strengthened during the year.”
Looking ahead, there was a sense that although economic uncertainty remained, the momentum of the past year would continue, with the firm indicating its pipeline was looking solid across various regions and markets.
“Although still early into the new financial year and mindful of the slower general economic conditions and higher interest rate environment, we remain confident that 2023 will see yet another year of growth in excess of the overall market,” said Fenby.
The results also included a hint that more acquisitions could be on the way, with Midwich’s revolving bank facilities being increased from £80m to £175m to put the business into a position where it could make a move to add to the group.
Midwich has been a consistent source of growth since it went public back in 2016, delivering a compound annual growth in revenue and adjusted operating profit since IPO of 22% and 19% respectively.