Shares dive against challenging backdrop but Midwich predicts strong future growth

But chairman Andrew Herbert said the Norfolk-based global operator believed it could outstrip the market going forward with a powerful mix of organic growth and acquisitional savvy.

He told shareholders at the AGM in Diss today that significant strategic progress had been made in 2023, including delivering record financial results, entry into the Canadian market, completion of seven acquisitions and further development of the leadership team.

He said that “against a challenging market backdrop, the group's focus on value-added technical solutions resulted in significant margin improvements and further market share gains in our biggest regions.”

Herbert conceded that “the challenging market conditions seen last year have continued into 2024, especially in the UK & Ireland, where our business has experienced a mid-single digit decline in organic revenue year to date, despite achieving record market share with many of our key vendors.”

He said group organic revenue for the first four months of the financial year was in line with the prior year, which is below the board's earlier expectations, as the persistence of elevated interest rates had deferred purchasing decisions and market recovery.

He added that the board believed it was now prudent to assume trading conditions in certain markets, such as the UK & Ireland, would remain challenging for the rest of 2024.

“We now expect adjusted operating profit for the full year to be broadly in line with that achieved in 2023,” he said.

But Herbert was exceptionally upbeat about the future. He said: “Midwich remains well positioned as the leading global specialist Pro AV distributor, with our £1.3 billion revenue in 2023 representing less than one per cent of the global market and 3-4 per cent of our target addressable market.

“We are pleased with recent strategic progress in further diversifying our geographic footprint and technical solutions. The seven acquisitions made during the last financial year have all integrated well and are trading in-line with expectations.

“Over the coming years, we anticipate there being significant opportunities to continue growing faster than the overall market, both organically and through acquisition and we remain excited by the long-term prospects for the business.”