Midwich (MIDW) AI Stock Analysis

• Market Cap: £193.20M
• Dividend Yield: 5.1%
• Average Volume (3M): 319.00K
• Price to Earnings (P/E): 27.8
• Beta (1Y): 0.69
• Revenue Growth: -2.54%
• EPS Growth: -69.38%
• Country: UK
• Employees: 1,800
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.07
• Shares Outstanding: 104,545,130
• 10 Day Avg. Volume: 183,829
• 30 Day Avg. Volume: 319,002
• PEG Ratio: -0.45
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 15.13
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: 186.00p ▲(1.09% Upside)

The overall stock score is primarily influenced by stable financial performance, though with some pressure on profitability and liquidity. Technical analysis indicates a bearish trend with oversold conditions, which is a significant risk factor. Valuation is mixed, with a high P/E ratio suggesting potential overvaluation, but a strong dividend yield offers some compensation.

Positive Factors

Market Position

A leading distribution position across the UK and Europe gives durable scale advantages: wide reseller and integrator networks, supplier relationships and geographic diversification reduce single-market risk and support steady order flow over multi-quarter cycles.

Cash Generation

Robust operating cash flow and a >2x cash-to-income ratio indicate the business converts earnings into cash effectively. For a working-capital intensive distributor this supports inventory financing, dividend capacity and reinvestment without relying excessively on external funding.

Gross Margin & Services Mix

A near-18% gross margin, combined with value-added services (installation, training, support) and supplier partnerships, suggests structural margin protection vs pure commodity distributors and supports product mix flexibility and recurring service revenue.

Negative Factors

Declining Profitability

Material margin erosion reduces retained earnings and free cash potential long-term. Persistent compression of operating and net margins weakens ability to fund growth, absorb cost shocks, or improve returns to shareholders without structural margin recovery or efficiency measures.

Free Cash Flow Decline

A >50% drop in free cash flow materially reduces financial flexibility. For a distributor with working-capital needs this raises refinancing or liquidity risk, could constrain capital expenditure, acquisitions or sustained dividends absent a recovery in cash conversion.

Reduced Return Efficiency & Leverage

Moderate leverage plus declining ROE signals lower capital efficiency and higher financial risk. With equity coverage under 30% and rising returns pressure, the company may face limited headroom for bolt-on M&A or cyclical downturns without rebuilding equity or materially improving ROE.

Midwich Business Overview & Revenue Model

Company Description

Midwich Group plc, together with its subsidiaries, engages in the distribution of audio visual (AV) solutions to the trade customers in the United Kingdom, Ireland, Europe, the Middle East, Africa, Asia Pacific, and North America. Its products support various AV categories, such as displays, projectors, broadcast, audio, video, and digital signage, as well as lighting and unified communications. The company also provides logistics services. It serves professional AV integrators and IT resellers in corporate, education, retail, residential, and hospitality sectors. The company was formerly known as Jade 320 Limited and changed its name to Midwich Group Plc in April 2016. Midwich Group plc was founded in 1976 and is based in Diss, the United Kingdom.

How the Company Makes Money

Midwich generates revenue primarily through the distribution of AV products and solutions to a network of resellers, installers, and system integrators. The company's revenue model is built on a mix of margin-based sales, where it purchases products from manufacturers at wholesale prices and sells them to customers at a markup. Key revenue streams include sales of hardware, such as projectors and displays, as well as value-added services like installation, training, and ongoing support. Additionally, Midwich benefits from strategic partnerships with leading technology brands, allowing it to offer exclusive products and leverage co-marketing initiatives that enhance its market presence and drive sales growth. The company also invests in expanding its product portfolio and enhancing its service offerings to adapt to the evolving demands of the AV market, further contributing to its earnings.

Midwich Financial Statement Overview

Summary

Midwich demonstrates stable revenue growth and effective cost management, though profitability margins have seen a decline. The balance sheet shows a healthy equity position and manageable leverage. Despite a reduction in free cash flow, cash generation relative to net income remains strong, indicating good cash flow management. Overall, Midwich maintains a stable financial position with some pressure on profitability and liquidity.

Income Statement

Midwich shows a stable revenue growth with a 2.16% increase from 2023 to 2024. However, profitability has declined, as indicated by a decrease in EBIT margin from 3.23% in 2023 to 1.83% in 2024 and a net profit margin drop from 2.08% to 1.22%. The gross profit margin is relatively healthy at 17.8% in 2024, demonstrating effective cost management despite the dip in net income.

Balance Sheet

The company has a moderate debt-to-equity ratio of 1.12 in 2024, indicating a balanced approach to leverage. The equity ratio is 27.85%, suggesting a sound equity position. Return on equity has reduced to 8.84% in 2024 from previous years, indicating a decrease in return efficiency. The overall balance sheet remains stable with manageable liabilities.

Cash Flow

Operating cash flow is strong at £35.28 million in 2024, although it decreased from the previous year. Free cash flow decreased significantly by 57.39% compared to 2023, which could indicate challenges in liquidity management. However, the operating cash flow to net income ratio is robust at 2.20, reflecting strong cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	981.04M	1.32B	1.29B	1.20B	855.97M	711.75M
Gross Profit	170.61M	234.33M	216.47M	173.91M	123.76M	95.36M
EBITDA	39.47M	51.95M	67.47M	52.45M	34.32M	17.24M
Net Income	8.16M	16.03M	26.82M	15.29M	12.43M	-3.75M
Balance Sheet
Total Assets	650.96M	650.66M	654.47M	559.77M	373.53M	306.26M
Cash, Cash Equivalents and Short-Term Investments	39.31M	49.16M	56.13M	25.86M	15.48M	25.48M
Total Debt	207.97M	202.59M	166.94M	149.33M	94.45M	64.76M
Total Liabilities	474.55M	461.51M	458.32M	425.64M	259.13M	199.77M
Stockholders Equity	176.41M	181.22M	173.25M	120.74M	105.12M	100.34M
Cash Flow
Free Cash Flow	32.45M	20.38M	47.82M	9.98M	3.56M	34.27M
Operating Cash Flow	37.03M	35.28M	63.79M	21.06M	9.52M	37.85M
Investing Cash Flow	-39.44M	-40.01M	-67.41M	-33.42M	-22.43M	-21.50M
Financing Cash Flow	16.52M	-1.30M	35.68M	15.82M	338.00K	-8.07M

Midwich Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 184.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MIDW, the sentiment is Positive. The current price of 184 is above the 20-day moving average (MA) of 183.80, above the 50-day MA of 175.29, and below the 200-day MA of 193.16, indicating a neutral trend. The MACD of 2.04 indicates Negative momentum. The RSI at 54.74 is Neutral, neither overbought nor oversold. The STOCH value of 62.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:MIDW.

Midwich Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNC	69 Neutral	£198.77M	40.95	12.29%	0.95%	22.72%	-8.82%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NET	61 Neutral	£201.17M	48.16	9.59%	0.80%	22.80%	-32.13%
MIDW	54 Neutral	£193.20M	27.77	3.93%	5.10%	-2.54%	-69.38%
RCN	54 Neutral	£191.16M	77.42	1.35%	3.01%	-31.46%	297.44%
TTG	54 Neutral	£198.72M	-2.84	-31.42%	―	-16.33%	-448.12%
NAR	53 Neutral	£8.41M	-2.11	-19.88%	1.85%	-6.09%	-161.61%

Midwich Corporate Events

Midwich Brings Managing Director Into Long-Term Incentive Plan With 600,000-Share Award

Midwich Group has awarded its Group Managing Director, Stephen Fenby, 600,000 nominal cost options under its 2016 Long Term Incentive Plan, marking the first time the long-serving executive has been included in the scheme. The 2025 LTIP award, equivalent to about 285% of his salary, is designed to more closely align his incentives with those of the wider management team and shareholders at what the board describes as a critical juncture for the business, with vesting contingent on demanding Adjusted Profit Before Tax and absolute total shareholder return targets running through to 2028, including TSR hurdles of up to 75%.

The most recent analyst rating on (GB:MIDW) stock is a Hold with a £160.00 price target. To see the full list of analyst forecasts on Midwich stock, see the GB:MIDW Stock Forecast page.