These are Midwich Group 's (MIDW) maiden set of figures as a publicly traded entity since its May debut on Aim. And with gross profits up a fifth at the half-year mark, underpinned by a 100 basis point uptick in the margin, any investors that got in at the IPO will be largely satisfied. Additional costs linked to the admission process constricted earnings, but management still felt able to reward shareholders with a 1.53p-a-share payout.
Midwich has been operating since 1979; a Norfolk-based distributor of audiovisual and document products for trade clients, the group now has a global reach, with businesses in Ireland, France, Germany and Australasia.
The group has established a record for initiating and integrating bolt-on acquisitions (10 over the past nine years), complemented by solid organic growth rates and effective cash conversion. The business model is predicated on a value-added approach, which according to analysts at Investec "differentiates it from its competitors". Obviously, the group has had limited time to make its impact felt on London's junior market, although in June it did sign a distribution agreement with whiteboard vendor SMART following the collapse of SMART's one-time exclusive distributor Steljes.
Investec analysts expect adjusted profits of £16.3m for the December year-end, leading to EPS of 15.9p, rising to £18.2m and 17.8p next year.
| MIDWICH GROUP (MIDW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 248p | MARKET VALUE: | £197m | |
| TOUCH: | 240p-255p | 12-MONTH HIGH: | 285p | LOW: 195p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 53p* | NET DEBT: | 33% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 141 | 4.5 | 4.5 | nil |
| 2016 | 158 | 3.8 | 3.5 | 1.53 |
| % change | +12 | -14 | -22 | - |
Ex-div: 22 Sep Payment: 21 Oct *Includes intangible assets of £21.7m, or 27p a share. | ||||
