Midwich Group (MIDW) H2 2025 earnings summary

Executive summary

• Revenue for 2025 was £1.27 billion, down 1.5% year-over-year, with growth in the UK, Ireland, and live events offset by poor trading in Germany; H2 saw a return to growth and strong cash generation.

• Adjusted operating profit was £43.6 million, down 10% year-over-year, reflecting challenging market conditions and exceptional costs, but in line with expectations and stronger in H2.

• The business closed its Swiss and a small US operation, focusing on markets with better return prospects and incurring related impairment and restructuring costs.

• Significant progress was made in digital capabilities, vendor expansion, and cost efficiency, including headcount reduction and a new CTO appointment.

• Market share increased, technical business grew 3%, and the company exited low-potential markets.

Financial highlights

• Revenue declined 1.5% to £1,270.8m; gross profit fell 1.6% to £225.2m; gross margin steady at 17.7%.

• Adjusted EBITDA was £55.7m, down 6.8%; adjusted operating profit £43.6m, down 11%.

• Cash generation was strong at 123% of adjusted EBITDA, with leverage reduced to 2.17x from 2.5x at H1, expected to fall below 2x by year-end.

• Proposed final dividend of 3.5p, full year 5.25p, in line with revised policy.

• Overheads remained flat despite acquisitions and investments; net debt reduced by £4.6 million.

Outlook and guidance

• 2026 outlook unchanged; macroeconomic conditions expected to remain challenging.

• Price rises are expected to continue due to chip shortages, supporting revenue.

• Focus for 2026 is on organic growth, market share gains, and leveraging technology investments.

• Full year outlook for 2026 remains unchanged, with benefits from 2025 initiatives expected to flow through.