Midwich CEO on achieving 28% organic revenue growth, Nimans acquisition and whether component shortages are easing

The AV distributor has also given an update on its acquisition of Nimans earlier this year

Midwich has said expanding its product portfolio and its services levels staying "consistently high" contributed to high organic growth for the first half of the year.

The AV distributor secured an organic growth rate of 27.9 per cent in its interim results for the six months ending 30 June 2022.

It claims this is more than double the rate of the overall market.

"We try to do a consistently good job for customers and that seems to pay off," Stephen Fenby, managing director of Midwich, told CRN.

"What contributed to most of the organic growth I think was bringing on new brands, so expanding our product portfolio, and I think service levels have remained consistently high.

"And we do pick up a good proportion of the business that's available in the marketplace."

Midwich's latest trading update also shows revenue increased 45.8 per cent year on year to £568.6m.

It comes after the distributor acquired Nimans for £27.5m and brought a majority stake in Cardiff-based distributor DVS earlier this year.

Fenby said these deals have contributed to growth in the first half of the year.

"They're both going very well, we've been very pleased with how they've fit into the group," he said.

"We spent a fair bit of time with each business looking for mutual opportunities, doing some cross selling of products into each other's customer bases. They are going very well, they've integrated and there's a good fit in there."

Midwich also put growth down to strong demand in all regions.

"There is an element of bounce back from the Covid period that we've seen," Fenby said.

"We've certainly seen some recovery in live events markets and things that involves in-person activities. There has also been some recovery in the corporate market."

"But there is still a long way to go with both of those."

He added: "I think generally, we're picking up a bigger share of the available business by just building on the team that we've got and really focusing more on the key accounts and building our business with them."

Midwich's latest trading figures also show adjusted profit before tax growth of 47.4 per cent to £19.2m and an interim dividend of 4.5 pence per share, an increase of 36 per cent.

Gross margin was slightly lower due to aged stock provisions, although the distributor expects this to "largely reverse".

Fenby said: "The board believes that the Group's business and the broader AV market should continue to improve steadily across the remainder of 2022 and into 2023, although there remains a risk of negative impact due to a decline in general economic conditions.

"Shortages of product and supply chain challenges appear to be easing in some areas, although critical component shortages continue to cause difficulties in completing projects. Our order books remain strong."