Q&A: Midwich's vision focused on display
CRN speaks to print and AV distributor Midwich's managing director Stephen Fenby to discuss the firm's half-year results, further acquisitions and the growing displays market
What are the major take homes from your half-year results? We are pleased with the results. We have increased our revenue by just under 34 per cent from £158m to £212m. Gross margin was in-line with what we did last year. We improved our profit before tax by just over 35 per cent to £10.3m from £7.6m. We have declared a dividend of 4.17p which is up 36 per cent on a like-for-like basis from last year. On a more strategic level we have made two important acquisitions this year so far - we bought Earpro, a distributor in Iberia, and we have recently acquired Van Domburg in the Netherlands. Those two businesses improve our depth of coverage in the European market. In UK and Ireland, that business grew 27 per cent in the first half of the year. About half of that was organic growth and the other half from the acquisitions of the Holden business in September last year. In terms of particular growth areas, displays had some good growth and the technical businesses did well too. We have also had six months' worth of strong sales for SMART Technologies, which has contributed to our growth. So we are very happy with the overall UK performance.
In terms of the organic growth you have been seeing, what have been the main drivers there? Some of it has been about taking on new brands, such as SMART. Some of it has been about backing the product areas which are growing well, such as the displays market. We have done some interesting projects in the first half of this year too.
What do Midwich's results say about the wider print and AV market? They say that the market is robust and there are clearly some parts of the economy which have been quieter in the first six months, but the print and AV markets are still strong. The print and AV markets offer solutions to end-users in a number of different ways. They help people to become more efficient and more competitive, so there is a variety of reasons why people want to use the equipment.
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Q&A: Midwich's vision focused on display
CRN speaks to print and AV distributor Midwich's managing director Stephen Fenby to discuss the firm's half-year results, further acquisitions and the growing displays market
What role have resellers had in your half-year results?
We have a strong customer base of resellers - they are resilient, they are adaptable and they are great at looking for opportunities in the market. The reseller industry is very resilient and adaptable with a lot of innovative people. This is similar to our customers who are looking for new opportunities and that is why this part of the technology market is so successful.
What will Midwich's acquisitions approach be for the coming 12 months? An acquisition programme has been part of our strategy for a long time and it accounts for a reasonable proportion of our growth. However, the primary focus is always on our organic growth. Our acquisition strategy will be the same as it has been for a while, which is looking at new geographical markets, but also looking at either entering new technologies or strengthening our position in any of our current technology areas. If I go back to the Holden acquisition, we had started to sell broadcast equipment and we felt that was a market we wanted to do more in, so we acquired Holden.
Shares in Midwich have jumped steeply since these half-year results were announced too… The share prices goes up and down minute-by-minute, but it has more than doubled compared to our float price. I am happy with the market and how it reflects our performance as a business. We just need to focus on doing a great job and presenting our case to the market and then the market will react based on our performance.
Finally, what are the future plans for Midwich?
We want to carry on doing more of the same. We want to grow our core business, investing in the business, looking at new markets and new territories, developing our people and giving them opportunities, and working closely with our vendors. We just want to carry on growing.