Specialist audio visual distributor Midwich, has announced today that it will implement measures to preserve cash and liquidity during the COVID-19 crisis, including the temporary suspension of acquisition activities and capital expenditure together with tighter controls on working capital and overheads.
Midwich said that throughout this crisis it has prioritised protecting the health and wellbeing of its team, utilising its remote working capabilities.
The extent to which the business is currently affected varies by country, and to further preserve cash, the Board has taken the decision to withdraw its intention to propose a final dividend for 2019, the company stated.
Balance sheet and liquidity
In January 2020, the Group signed a new three year £50 million revolving credit facility which has unutilised capacity of £37.8 million. This facility also includes a £30 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 £39.7m, of which £21m was used in connection with the acquisition of Starin Marketing, Inc. The Group also has numerous working capital facilities (totalling over £100 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 its 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.
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”)
Midwich’s 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.
Biamp announces distribution partnership with Midwich across UK & Ireland
Midwich has also announced a new distribution partnership with Biamp, a leading supplier of professional AV solutions.
The agreement covers the UK & Ireland and includes Biamp’s full product range; Biamp Devio, Tesira and Tesira Forte, Apart, Community and Cambridge Sound Management.