Management at Midwich (MIDW) was understandably keen to point out further improvement in the gross margin through 2017, up 20 basis points to 15.5 per cent, although one suspects that shareholders would have been more enamoured with the 36 per cent hike in the full-year dividend on a like-for-like basis.
The specialist audio visual distributor recorded adjusted operating profit of £25m, a 31 per cent increase at constant currencies, while delivering sales growth across all its locales, with special praise reserved for the German and Australian markets. That geographic reach now stretches across the Benelux countries and the Iberian Peninsula through deals to acquire Earpro SA and the Gebroeders van Domburg BV Group of companies. But even without the new subsidiaries, the group recorded a 14.8 per cent organic sales increase, and there’s another potential sales catalyst on the horizon.
That’s because Midwich has teamed up with UK TV manufacturer Cello to take advantage of the increase in advertising and marketing initiatives linked to the upcoming World Cup, through the supply of 75 inch and 85 inch Cello televisions to venues in the leisure and hospitality markets, such as pubs, gyms and hotels.
Investec gives adjusted EPS of 26.5p for the December 2018 year-end, rising to 28.8p in 2019.
| MIDWICH (MIDW) | ||||
| ORD PRICE: | 570p | MARKET VALUE: | £453m | |
| TOUCH: | 560-570 | 12-MONTH HIGH: | 660p | LOW: 303p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 67p* | NET DEBT: | 41% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 (M&R 320 Ltd)* | 234 | 8.9 | na | nil |
| 2014 (Jade 320 Ltd)* | 281 | 7.3 | na | nil |
| 2015 (Jade 320 Ltd)* | 314 | 8.6 | 7.1 | nil |
| 2016 | 370 | 12.1 | 10.9 | 8.62 |
| 2017 | 472 | 18.9 | 17.1 | 13.82 |
| % change | +28 | +56 | +56 | +60 |
| Ex-div: | 24 May | |||
| Payment: | 22 Jun | |||
| *Pro-forma figures for previous holding companies. Dividends of 7.7p a share were paid to shareholders of M&R 320 in 2013. **Includes intangible assets of £31.4m, or 40p a share. | ||||
