In This Article:
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Revenue: GBP1.317 billion, up 3.5% on a constant currency basis; underlying revenue down 1.4%.
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Gross Margin: Increased by 0.3% to 17.8%.
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Adjusted Operating Profit: GBP48.3 million, down 17.4% from the previous year.
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Adjusted Operating Margin: 3.7%, down by 0.9%.
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Operating Cash Conversion: 97% for the year.
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Leverage: Around 2 times adjusted EBITDA.
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Dividend: Total dividend of 13p for the full year, with a cover of 2 times.
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Technical Sales Growth: Increased by 6.8%.
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Mainstream Revenue: Dropped by 8.9% due to price erosion.
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Interest Costs: Approximately GBP10 million, expected to rise to GBP12 million in 2025.
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Net Debt: GBP130 million at year-end, with leverage expected to remain around 2 times.
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Acquisitions: Four acquisitions completed in 2024, with GBP15.5 million expected for consideration in 2025.
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Regional Performance: UK and Ireland revenue flat; EMEA revenue down 2.7% organically; North America growth of 28% in local currency.
Release Date: March 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Midwich Group PLC (STU:9S2) delivered record revenues and gross margins despite challenging market conditions.
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The company achieved strong performance in strategic product areas such as audio, lighting, and technical video.
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Operating cash generation exceeded expectations with a leverage ratio of around 2 times.
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Four acquisitions were successfully integrated, contributing to revenue growth.
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The company maintained or gained market share in key markets, demonstrating competitive strength.
Negative Points
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Price erosion in mainstream display and projection products led to a decline in underlying revenue by 1.4%.
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Adjusted operating profit decreased by 17.4% compared to the previous year.
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The corporate market remained weak due to economic uncertainty, impacting demand.
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There was significant softness in discretionary spending in education, particularly in Germany and the UK.
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A fire at a neighboring warehouse in the UAE destroyed GBP4 million worth of inventory, impacting short-term profits.
Q & A Highlights
Q: What is the impact of increased defense spending on Midwich Group's business? A: Stephen Fenby, Group Managing Director, explained that the direct impact on Midwich Group from defense spending is relatively small, as they have done some projects in the UK, Germany, and Australia. However, increased defense spending could indirectly benefit the company as it may lead to more money flowing into economies, potentially boosting corporate and educational technology investments.