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Upgraded profits forecast at Midwich sends Diss company’s shares soaring

PUBLISHED: 18:07 18 January 2017 | UPDATED: 10:50 19 January 2017

Stephen Fenby, Managing Director of Midwich in Diss.

Stephen Fenby, Managing Director of Midwich in Diss.

Archant Norfolk Photographic © 2016

Audio-visual trade specialist Midwich has upgraded its revenues and profit expectations in 2016 after a strong second half to the year.

In its pre-close trading update, the Diss-based firm said it had carried momentum from the first half of the year, and had been buoyed by the weakness in sterling, which drove growth at its overseas businesses.

As a result it expects to report revenue of approximately £370m, representing growth of around 18% on the year before, with movements in exchange rates accounting for around 3% of that growth.

The update sent the AIM-listed company’s shares soaring by 18% today, rising from 224p to close at 264.88p.

“Growth was seen across all of the group’s divisions, in particular its overseas businesses, and it has seen a better-than-expected contribution from its most recent UK acquisition, Holdan,” the company said.

Gross margins have also “continued to improve in line with the board’s expectations”, it added.

“As a result of this strong performance, the board now anticipates reporting adjusted profit before tax for 2016 comfortably ahead of its previous expectations.”

Midwich bought a 75% stake in Manchester-based Holdan in September last year as a way to get a foothold in broadcast video markets. It has the option to purchase the remaining 25% over the next three years for a maximum total consideration of £7.1m.

As a specialist distributor of audio-visual equipment to the trade market, Midwich already has operations in the UK and Ireland, France, Germany and Australasia, with managing director Stephen Fenby saying last year that it was looking at opportunities in other European markets.

It has more than 10,000 customers across the world and works with major companies such as Samsung, LG, Epson and NEC to supply products such as projectors, digital signage, screens and printers.

It employs around 500 people and is a member of the EDP/EADT Top100 list of Norfolk and Suffolk’s biggest companies by turnover.

The Vince’s Road company announced in June that revenue for the six months to the end of June had risen 12% to £158.4m, while adjusted pre-tax profits rose 23% to £7.6m.

Midwich will announce its final results for the year ended December 31, 2016 on March 14.

Do you have a business story? Email businessdesk@archant.co.uk

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