LONDON (ShareCast) - (Sharecast News) - Midwich delivered record revenue and gross margins in 2024, it reported on Tuesday, despite ongoing macroeconomic pressures, as its profits declined.


The AIM-traded firm said revenue rose 1.7% to £1.32bn, or 3.5% on a constant currency basis, while gross profit increased 3.6% to £234.3m

Its gross margin improved to 17.8% - the highest level recorded by the company.

Adjusted operating profit declined to £48.3m from £59.6m, reflecting the impact of challenging market conditions.

Statutory operating profit fell 42% to £24.1m, while profit before tax dropped 39% to £22.3m.

Basic earnings per share declined 43.9% to 15.69p.

The board proposed a final dividend of 7.5p per share, bringing the total for the year to 13p, down from 16.5p in 2023.

Operationally, the company said it saw strong performance in strategic product categories, with market share remaining stable or increasing across most regions.

North America was a key growth driver, with sales rising 28% and organic revenue increasing 7%.

The company undertook cost-saving measures in the second half of the year, achieving £5m in annualised savings.

Midwich completed four small bolt-on acquisitions in 2024, with integration progressing well.

While no major merger and acquisition opportunities were in late stages, the company remains open to acquisitions in the medium term.

Since its IPO in 2016, Midwich said it had achieved compound annual growth of 17% in revenue and 13% in adjusted operating profit, demonstrating the strength of its long-term strategy.

"After three years of strong growth, 2024 was a challenging period for the group," said managing director Stephen Fenby.

"The business continued to be impacted by subdued investment in the education and corporate end user markets, along with significant price erosion in some mainstream product areas due to over-supply by manufacturers.

"Despite these factors, our strategy of focusing on technical product areas resulted in the business remaining robust, with revenue and gross profit growing to record levels."

Fenby said the company's relative performance reflected the "fundamental strength" of the business, its customer and vendor relationships, its geographic and technical solution diversity, and the skills and dedication of its team.

"I believe that the group is very well placed to benefit from an improvement in market conditions.

"In the short term, continued price deflation in mainstream product areas is expected to cause challenges to the growth of the business.

"In the meantime, the group continues to develop new revenue sources, and ensure we operate as efficiently as possible."

Stephen Fenby said the company's expected trading performance for the 2025 full year remained unchanged, with a higher weighting anticipated for the second half of the year.

Reporting by Josh White for Sharecast.com.

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