'Challenging' market conditions weigh heavily at Midwich
By Abigail Townsend
Date: Tuesday 09 Sep 2025
(Sharecast News) - Midwich Group posted a slide in first-half sales and earnings on Tuesday, after economic uncertainty weighed heavily on demand.
Revenues at the AIM-listed specialist audio visual distributor fell 4.3% to £620.3m in the six months to 30 June, or by 2.7% on a constant currency basis, while adjusted operating profits tumbled 24.5% to £16.6m.
Organic revenues declined by 3.5%.
Stephen Fenby, managing director, said 2025 had so far been "challenging" for the entire industry.
He continued: "Education and corporate expenditure [has been] suppressed due to several factors such as high government debt, low or negative GDP growth and tariff uncertainty.
"As a result we have seen reduced demand and price erosion of mainstream products, which has contributed to compressed net margins.
"However, our higher margin technical product categories, which represent over two thirds of first half sales, continue to be more resilient."
Looking to the second half and Midwich said current macroeconomic conditions in certain markets - particularly Germany, France and the US - would likely remain "challenging" for the rest of the year.
However, it also flagged a "positive" start to the second half, which put it on track to deliver organic sales growth during the period.
It concluded: "The group has a strong pipeline of new vendor opportunities which, when combined with positive current trade and steady order books at the start of the second half, and a tight focus on overhead efficiencies, means that the board's expectations of adjusted operating profit for the full year remain unchanged."
Berenberg, which has a 'buy' rating on the stock, said: "We think there are pockets of encouragement within this performance, even despite the continued market challenges.
"Pleasingly, management has maintained its 2025 full-year P&L guidance, while our understanding is that initial trading in July and August has remained in line with management's expectations."
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10 Lower Thames St,
London EC3R 6EN