Print and AV specialist distributor Midwich has posted "across-the-board" growth in an H1 which saw its overseas operations outperform its UK business.
Adjusted operating profit increased by 27.7 per cent to £13.5m in the first six months of the year, on revenues that similarly surged by 24.8 per cent to £264.1m.
Speaking to Channelnomics Europe, managing director Stephen Fenby said the UK-based distributor enjoyed a year-on-year sales increase "across all territories", but pointed to Germany and France as its fastest-growing regions.
Midwich's continental European business grew by more than 60 per cent year on year. Its French region grew revenues by 40 per cent while Germany enjoyed a 30 per cent boost, according to Fenby (pictured).
The lightning growth follows an exceptionally busy few years of M&A across the continent for the print and AV distributor. It snapped up Spanish audio distributor Earpro in March 2017, then entered the Dutch market through buying out €30m-turnover Netherlands player Van Domburg the following September.
Although Midwich has been acquisitive across Europe, Fenby said that only around half of Midwich's growth on the continent stemmed from acquisitions, with the remaining half being generated organically.
"Very broadly speaking, it was half organic and half acquisitions. The businesses, particularly in France and Germany, performed very well; we're really pleased with how things have gone there. There was a solid contribution from the two businesses we bought last year: Van Donburg in the Netherlands and Earpro in Spain.
"There has also been a good organic performance in Europe, particularly in France and Germany. France is up by 40 per cent and Germany is up 30 per cent, so we're very pleased with the team's performance out there," he said.
The UK and Ireland, however, lagged behind its other geographies and delivered around 10 per cent revenue growth, according to Fenby.
Sales for the UK and Ireland now account for 58 per cent of group revenues - down from 66 per cent in the first six months of last year - while continental Europe now represents 35 per cent of sales, up from 27 per cent over the same period last year.
"The UK market has been a little bit tougher, but we still grew in the UK," said Fenby.
"We had a good contribution from the Sound Technology business that we acquired last year, and the core business grew. The UK market was a bit more challenging than it was in the first half of last year.
"My feeling is that Brexit uncertainty is weighing on some investment decisions and the timing of some decisions. There's plenty of interest around, and projects are in progress, but people are maybe being a bit hesitant about pushing them on, and have been over the last few months.
"There's just a little bit of hesitation in the market until we see a little bit of clarity about what Brexit will mean."
Midwich has made two more acquisitions in Europe over the last few weeks. The firm bought French audio player Sound Directions just last week, and Bauer und Trummer - which trades as New Media - at the end of August.
The Sound Directions buyout marks Midwich's third audio-focused M&A move in the space of 18 months, a market in which the distributor needed to have a stronger European presence, Fenby claims.
"Audio is an area where we felt we didn't have as strong a presence as we might do," he said. "They increase our specialisation and expertise in two markets in France and Germany and they're very useful and helpful bolt-ons in those more technical market areas."
Fenby previously told Channelnomics Europe that this year he expects to "at least" match Midwich's 2017 M&A tally when it acquired three distributors. With Sound Directions and New Media already in the bag, Fenby said he hopes to close "one or two" more takeovers before the end of the year.
"We do have a pretty active M&A pipeline… our focus area is primarily the European market, but we do have interest further afield," he said.
The distribution boss also weighed in on HP's acquisition of print VAR Apogee. He commented that Midwich's print business has seen a "degree of change" over the years as vendors continue to turn to its channel partners for M&A.
"There is a degree of change in the print side of our business and in the market place out there," he explained.
"There have been a number of acquisitions of large resellers by manufacturers; that is certainly a trend in the market, but we just need to stick to what we're good at and make sure we're still providing good value-add to our customers and vendors."
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