Midwich MD hints at European acquisitions as profits jump 18 per cent

Tom Wright
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Midwich MD hints at European acquisitions as profits jump 18 per cent

Midwich looks set to expand its European presence with MD Stephen Fenby "hopeful" of acquisitions this year

AV distributor Midwich is set to continue on the acquisition trail this year after announcing a revenue increase of 17.8 per cent, according to managing director Stephen Fenby.

Midwich went public in May last year and quickly followed the IPO up with the acquisitions of UK broadcast specialist Holdan and New Zealand-based Wired in September.

Speaking as Midwich announced its first full-year results since going public, Fenby said that, while he would not rule out UK acquisitions, mainland Europe activity is more likely as the distributor looks to move into new territories - with "a number of conversations ongoing".

For the 12 months ending 31 December 2016 Midwich saw revenue up 17.8 per cent year on year to £370.1m, while operating profit was up 14.6 per cent to £14.5m.

Fenby said he is "hopeful" that some acquisition activity will be announced this year.

"Very much top of the agenda is the development of our network, particularly across Europe," he said.

"That process takes time to get to know the management team, it takes time for them to get to know us, so we don't just go in with a chequebook and say ‘off you go' - we want them to stay and we want to work with them.

"Those acquisitions can take a bit longer, but hopefully when we get them we've got the right ones with a high-calibre team and then the vendors know that there is another new territory that we're in that they can come and work with us in."

IPO success

Midwich launched its IPO in May last year with a starting share price of 232p, with the price reaching a high of 351p this month.

Fenby explained that the IPO has given Midwich more international credibility as it looks to expand its global presence.

"I believe we've seen some real benefits from the IPO," he said. "I think it made a real statement to the outside world about our future strategy, our independence - and it gave us funding and some powerful investors for our future development.

"We've seen some very positive reaction from our customers and particularly from our manufacturers who are seeing us as a very serious player in the market place."

Fenby said that in the last year Midwich has seen revenue growth in every territory in which it operates, while its audio-visual arm has continued to be the most fruitful.

Midwich become a SMART Technologies distributor last year, which Fenby described as "a great coup", and recently took the vendor into Germany for the first time.

He added that Midwich's growing international presence is now being noticed by its vendors.

"One of the things that the vendors are finding is that we can give them a really high quality and consistent support in overseas territories where maybe they've felt some weakness," he explained.

"They'll come to us and we can then work with them in different territories, but each time working with the local teams, understanding the market and working with a local strategy for them."

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