Shareholders in Midwich (MIDW) saw the value of their holdings rise after the audio visual (AV) distributor revealed that both revenue and adjusted operating profit increased by 28 per cent at constant currencies at the half-year mark. Sales growth, half of which was organic, was achieved across all of the group’s locales, with the key UK & Ireland business recording a 27 per cent increase, including a maiden six-month contribution from Derbyshire-based AV subsidiary Holdan.
That said, just over a third of sales are now derived outside the British Isles, with recent acquisitions from abroad "performing ahead of expectations. The rate of sales growth was particularly noticeable in its German and Australasian businesses, albeit from a lower base. This expanding geographic exposure is to be welcomed in view of a relative slowdown in the UK economy if the credit cycle moves into downtrend, although this has had no discernible effect on Midwich’s B2B activities thus far.
In early September, Midwich sealed a deal to acquire a 70 per cent interest in Gebroeders van Domburg BV, a specialist AV and lighting distributor in the Netherlands. Investec gives adjusted pre-tax profits of £22.1m for the December year-end, leading to EPS of 21.5p, against £17.9m and 18.6p in 2016.
| MIDWICH (MIDW) | ||||
| ORD PRICE: | 420p | MARKET VALUE: | £333m | |
| TOUCH: | 420-435p | 12-MONTH HIGH: | 420p | LOW: 195p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 57p* | NET DEBT: | 48% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Jun | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 † | 158 | 3.8 | 3.5 | 1.53 |
| 2017 | 212 | 8.0 | 7.0 | 4.17 |
| % change | +34 | +110 | +103 | +173 |
| Ex-div: | 21 Sep | |||
| Payment: | 27 Oct | |||
| †2016 dividend was based on profits from 55-day period from completion of listing through to 30 June 2016, so the like-for-like increase was 36 per cent. *Includes intangible assets of £25.3m, or 32p a share | ||||
