Midwich Group PLC COVID-19 update (9465H)
March 30 2020 - 2:00AM
UK Regulatory
TIDMMIDW
RNS Number : 9465H
Midwich Group PLC
30 March 2020
30 March 2020
Midwich Group plc
("Midwich", the "Company" or the "Group")
COVID-19 update
Midwich, a specialist audio visual distributor to the trade
market, today provides an update in light of the constantly
evolving COVID-19 situation.
Throughout this crisis we have prioritised protecting the health
and wellbeing of our team, utilising particularly our remote
working capabilities.
The situation in respect of COVID-19 continues to evolve rapidly
across the countries in which the Group operates. The extent to
which our business is currently affected varies by country, but we
have taken actions across the Group to preserve cash and liquidity.
Measures undertaken include the temporary suspension of acquisition
activities and capital expenditure together with tighter controls
on working capital and overheads. To further preserve cash, the
Board has taken the decision to withdraw its intention to propose a
final dividend for 2019.
Balance sheet and liquidity
In January 2020, the Group signed a new three year GBP50 million
revolving credit facility which has unutilised capacity of GBP37.8
million. This facility also includes a GBP30 million accordion
option and can be extended by a further two years, both at the
bank's discretion. In February 2020, the Group successfully
completed an equity fundraising of GBP39.7m, of which GBP21m was
used in connection with the acquisition of Starin Marketing, Inc.
The Group also has numerous working capital facilities (totalling
over GBP100 million) which provide further funding flexibility to
our businesses. At 31 December 2019, the Group had closing adjusted
net debt/adjusted EBITDA of 1.4x. The Board believes that this
balance sheet strength, together with a strong and supportive
relationship with our banking partners, means that the Group is
well placed to deal with current uncertainties.
The Board notes that, although our end user markets have been
adversely affected by the COVID-19 situation to varying degrees,
the Group continues to supply solutions into critical end user
markets and also to facilitate remote working and communication. In
particular, working with its customers, the Group has recently
supplied solutions to support the UK and Italian governments in
their battle with COVID-19.
Current trading
While it is too early to accurately determine the evolving
impact of COVID-19 on the Group's performance in the current
financial year, the Board believes that the audio visual industry
is one of long term structural growth and that we are well
positioned for when markets begin to return to normal.
Annual General Meeting ("AGM")
The Company is not authorised under its articles to hold a
virtual or hybrid AGM, so the AGM will take place on 11 May 2020
and, subject to changes in government guidance, it will be held at
Midwich's office in Diss Norfolk. The Board will be encouraging
shareholders to submit their proxies as early as possible. In the
exceptional current circumstances, the Board considers the health
of the Company's shareholders and its employees to be of paramount
importance and asks shareholders not to attend the meeting in
person. Final details of the AGM will be confirmed when the 2019
Annual Report is published and distributed in the coming weeks.
For further information:
Midwich Group plc Tel: +44 (0) 13
Stephen Fenby, Managing Director 7964 9200
Stephen Lamb, Finance Director
Investec Bank plc (NOMAD and Joint Broker Tel: +44 (0) 20
to Midwich) 7597 5970
James Rudd
Carlton Nelson
Berenberg (Joint Broker to Midwich) Tel: +44 (0) 20
Ben Wright 3207 7800
Mark Whitmore
Alix Mecklenburg-Solodkoff
FTI Consulting Tel: +44 (0) 20
Alex Beagley 3727 1000
Tom Hufton
Fern Duncan
Rafaella de Freitas
About Midwich Group
Midwich is a specialist AV distributor to the trade market, with
operations in the UK and Ireland, Continental Europe, Asia-Pacific
and North America. The Group's long-standing relationships with
over 500 vendors, including blue-chip organisations, support a
comprehensive product portfolio across major audio visual
categories such as large format displays, projectors, digital
signage, unified communications and professional audio. The Group
operates as the sole or largest in-country distributor for a number
of its vendors in their respective product sets.
The Directors attribute this position to the Group's technical
expertise, extensive product knowledge and strong customer service
offering built up over a number of years. The Group has a large and
diverse base of over 20,000 customers, most of which are
professional AV integrators and IT resellers serving sectors such
as corporate, education, retail, residential and hospitality.
Although the Group does not sell directly to end users, it believes
that the majority of its products are used by commercial and
educational establishments rather than consumers.
Initially a UK only distributor, the Group now has 1,000
employees across the UK and Ireland, Continental Europe,
Asia-Pacific and North America. A core component of the Group's
growth strategy is further expansion of its international
operations and footprint into strategically targeted
jurisdictions.
For further information, please visit
www.midwichgroupplc.com
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END
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