Good morning everybody, and welcome to the Midwich Group 2025 full year results presentation. For people who are watching online, if you have any questions, please click on the Q&A button, and then we can look at answering those at the end of the presentation.

In May this year, we will have been on AIM for 10 years. The group has achieved some great things over the years.

I believe we've delivered on what we promised we would do at the time of the IPO. We've grown our revenue, gross profit, net profit, all significantly.

We've moved into new technical product areas. We've expanded globally and become a leading player in the market.

One man who's not helped with any of that, but will be key to our future growth, is sitting beside me. It's Adam Councell, who's our new CFO.

Would you like to introduce yourself? Yep, no.

For those that haven't met me,

my name's Adam Councell. I've got around 15 years experience as a quoted company CFO, initially with Restore, where I was there for 7 years, and we grew that business from sort of £50 million market cap to £600 million, and then I had a stint at Fuller's, and then more latterly at Marlowe plc.

One of the things that drew me to Midwich was I really like businesses where, for the customer, there's a real premium on getting things right, and conversely, a cost of getting things wrong, which obviously if you're doing a live broadcast or an event, there's a real cost to the customer of getting it wrong, and Midwich really helps with that because that's what we do. Through my 2 weeks in the business already, I've met a lot of people, and what I found is a really great culture, and also a real deep industry knowledge, which is fantastic.

Really pleased to be here, and really looking forward to taking the business through its next phase with Stephen. Obviously because I've only been here 2 weeks, I'm going to give Stephen the delightful job of doing the entire presentation.

For the first time only, Stephen will be doing the financial slides. I'll hand back to Stephen.

Unless I ask you to do them when we get

Anyway...

Let's

let's move on to sort of a summary at the beginning. Against the backdrop of a continued challenging market, we were very busy in 2025 getting the business ready for the future.

We made significant progress with this, and we have much more to come. One of the things we did was to close our Swiss business and a small business in the US.

These were in markets where we felt we couldn't see a way to get the return we needed. The numbers in this pack are presented on a continuing continuing business basis, excluding the discontinued activities.

Our revenue of £1.27 billion was down slightly on 2024. We saw growth in the UK and Ireland and in our live events businesses, but these were overshadowed by poor trading in Germany.

Our gross margin percentage was flat on the prior year. Our adjusted operating profit of £43.6 million was down 10% on last year, although the numbers in the second half of the year were sorry, the numbers were in line with expectations, and were relatively strong in the second half.

Our cash generation was very strong at 123%, and our leverage of 2.17 times was down significantly from the 2.5 times at the end of the first half. We expect leverage to be below 2 times at the end of this year.

In line with our revised dividend policy, we are proposing a final dividend of 3.5p, giving a full year dividend of 5.25p. We continue to execute on our established strategy of focusing on technical sales and gaining market share.

We were very busy laying the foundations for the future. Our focus was on improving commercial excellence by broadening our vendor and customer share, expanding our product ranges, offering new services, and cost efficiency.

We expanded our vendor portfolio, including launching 36 new vendor relationships across the group. We made significant progress with our digital capabilities, including AI automation, and digital solutions, including a new software billing platform.

We've built a new team looking at projects with and system enhancements, and we've recruited a new a new Chief Technical Officer. Also, we've continued to ensure that our cost base is suitable for the business in the market that it is.

We've reduced our headcount during the year despite making further investments in key strategic areas. We've seen benefits from many of the business improvement activities we've undertaken, and as I said, there's more to come in 2026 and beyond.

I would highlight particularly our commercial training academies, where we educate teams on best practice within the group. In 2026, we hope to build on the small organic growth that we achieved in H2 2025.

After 2 years of price deflation in parts of our market, we've started to see some price rises, which should help our revenue during the course of this year. Our team is energized and looks forward to delivering a stronger year in 2026.

In terms of the current landscape, as I said, 2025 was a challenging year in our market, and we've seen no signs of improvement in this yet. We have, however, as I mentioned, started to see price rises across a range of vendors and technologies.

These are driven by chip shortages and pricing increases on chips as well. We expect to see price rises across product ranges continue for some time.

Government spend continues to be suppressed. This is particularly pertinent in Germany, where we've not yet seen the benefits of proposed major investment programs.

We're seeing increased adoption of AI in vendor solutions, which we believe will lead to higher specification products, driving new demand in our industry. In terms of our business, we are seeing stable order books and improving market shares.

The benefits of our cost base realignment in 2025 are flowing through into the business, as well as benefits from our technology investments. Finally, the Middle East situation is a concern, as this region was a major contributor to our EMEA profit in 2025.

Our business is still open and trading, but obviously the security of our people is key. We're monitoring the situation closely, but it is difficult to assess the likely impact of this crisis on the business at this stage.

Our market remains vibrant and dynamic. An example of this is that there were record numbers of attendees in our recent global trade show at ISE in February.

The next slide provides a reminder of our purpose and key differentiators. We exist to help our customers win and then deliver successful projects, and our manufacturers to reach a broad market.

Our main differentiators are the strength of our vendor relationships. A major growth driver for the business is to expand our vendor relationships across the group and introduce new vendors to companies that we've acquired.

Our expertise in managing portfolio of products, technologies, and geographies is also another key differentiator, as well as the unparalleled depth of specialist knowledge in the business. Finally, and most importantly, consistency of a high level of customer service is key.

In terms of market share, I'm often asked about the size of the market, the addressable element, and our share. This has always been very difficult to answer because of the lack of reliable data, and changes in the different segments of the market, what's what's suitable for distribution, and what is attractive to us.

However, research by AVIXA in 2025 showed that the global market was expected to be $332 billion, growing at 3.9% a year to $402 billion by 2030. On the left-hand side of this page, the growth model tries to show how we grow our business in each category.

For example, where we're in competition with other distributors, we might, for example, represent 50% of our supplier sales, one growth approach of course is to win a larger share of our vendor's business from the competition. Our other focus of course is to grow our vendor's business by taking share from vendors we don't supply.

If we have an exclusive vendor relationship, of course that's our only role. Of course, the top arrow shows that the total market for a particular set of products might also be growing.

On the right-hand table, we're looking at our relative position in each of our global markets by the main product sets. The darker rectangles represent where a market where we have a comprehensive portfolio of leading brands.

The lighter rectangles show where we have an established capability, but with room to improve. Where we have white space, of course, we have no presence, which represents a strong growth opportunity for us.

Overall, we believe that we have 3% to 4% of our target addressable market globally. In summary, we're not short of business to go after.

The next two slides give examples of how we're able to source and drive new business. Firstly, our relationship with a major drone manufacturer, DJI.

We are all aware of drones now, of course. They have numerous commercial applications, such as emergency response, search and rescue, infrastructure inspection, and land management.

We started to sell DJI drones in the UK in late 2024, and then Benelux in 2025. Having had no prior involvement in this sector, it's become a major success story in 2025, with revenues in the tens of millions of pounds.

This shows me that we have an approach which applies equally well to non-core AV markets. You can see from the quote on the right-hand side that the vendor also very much appreciates our approach, our success, and the future partnership.

On the next slide, we look at the unified unified communications, a part of the AV market that we had little involvement in prior to acquiring our first US business, Starin, in 2020. Through applying our focused distribution approach, investing strategically, and acquiring and rolling out vendor relationships, we've become a global market leader in this category, which now represents around 15% of our group turnover.

We estimate that we have grown this business organically well over £100 million in 6 years. You can see on the right-hand side a quote from one of our relatively new vendors, Neat, showing how we've substantially increased their global reach.

Now looking at the financial review, just to pick out a few key points that I haven't already covered. Firstly, the revenue decline in the year of 1.5% was just 0.8% on a constant currency basis.

This in turn was a combination of a first half decline of 2.4% and a second half increase of 0.8%. Our overheads were largely flat despite a full year effect of acquisitions and strategic investments.

Our adjusted operating profit reduced by 10% on a constant currency basis, but was broadly in line in the second half of the year. We have significant exceptional items this year, which we've listed and described in the appendix.

Turning to the balance sheet, strong working capital management led to a ratio of working capital to sales being much lower than the prior year. A positive net cash flow resulted in net debt being £4.6 million lower.

Our leverage of 2.17 times was better than our previous guidance, with an expectation of it being below 2 times at the end of this year. Our outstanding liabilities for M&A are now £6.7 million, significantly lower than they have been in the past, and there's been no change to our debt facilities.

Now looking at the performance of our four regions, what we tried to do on these slides is look at the key drivers to 2025 performance, then our assumptions on the market and our business in 2026, and finally our view on our position in the market. To EMEA first, this is our largest region by revenue.

Overall revenues declined 5.5% on a constant currency basis. Note these exclude the discontinued business.

We saw growth in the Southern European and Middle Eastern businesses, but this was significantly overshadowed by a drop in German revenues. We also undertook some significant restructuring activities in the German business later in the year.

Finally, you may recall that we had a fire in our Dubai warehouse at the end of 2024, and that did impact on the results from that part of the region in the first few months of 2025. In terms of this year, we're expecting flat markets and an expansion out of the an expansion, sorry, into Central and Eastern Europe out of the German business.

Finally, I should add of course that the Middle East does pose some uncertainty in terms of the in terms of the results. In terms of our market position, we have a regional strength in the live events and entertainment markets, and strong positions in the German, French, and Benelux markets, with leading specialist businesses in Southern Europe and the Middle East.

In the UK and Ireland, the business performed very well in a tough market. We did reduce the cost base earlier in the year, but we took business from competition, we launched new brands, and we grew our drone business significantly.

We expect to continue much of this business improvement work in 2026, seeing particular gains in market share and the full year benefits of restructuring. The results in the UK and Ireland show that the turnover increased by 6.6% on a constant currency basis, of which 4.9% was organic.

We improved our gross profit percentage from 18% to 18.6%, and our EBIT increased by 30% across the year. In terms of our market position, we are clear market leader in the UK and Ireland, and our future growth should be achieved through new technologies, vendors, and expanding share from competition.

North America accounts for 16% of our business. We saw a decline of 5.3% on a constant currency basis, and a fall in the gross margin from 19.3% to 17.5%.

Our EBIT on a constant currency basis was down around 44%. This region, as you may recall, was impacted significantly by the loss of a high-revenue and GP vendor in Canada.

We believe that we've also lost some share within the mid-tier US business. We undertook a significant headcount reduction in Canada earlier in the year.

The CEOs of the Canadian and US businesses left late in the year, and we've created a single regional management team of four, including a senior sales resource recruited from outside. Our assumptions for 2026 center around the new regional management team driving improved performance, and a push to acquire new vendors, particularly in the Canadian market.

APAC is our smallest region. We saw some small improvements in revenue, margins, and overhead costs, leading to a reduction in losses in the region.

The key to 2025 was an improved project pipeline and new management in that region. Our focus for 2026 is an investment in Southeast Asia, which we see as a good long-term growth prospect, and a further focus on projects in Australia and New Zealand.

Our market position in ANZ, we have a meaningful share of the market, but currently a narrow portfolio gives us opportunities to expand our business by broadening that. In Southeast Asia, we have a small share in a very fragmented market.

We're looking at new brands which we've had some success with, and we hope to achieve some good growth in that in the medium term. I spoke earlier about our recalibrated dividend policy.

This next slide, looking at capital allocation priorities. Our first priority is in investment in organic growth and strategic areas, then in new areas of development, in M&A, and finally in shareholder returns.

We will continue to have a focused and tight approach to capital allocation, with a particular emphasis on the growth of the business. Now to growth drivers and outlook.

I think it's important to re-emphasize what our areas of future focus are. Firstly, it's absolutely critical that customer service is as consistently high as it can be.

We want to continue to develop the business in core technical areas, and we expect to see benefits from our system investments. We will look to take advantage of market disruption, for example struggling competitors.

We will accelerate the growth of our new market segments, such as in software, services, and other technical categories. We'll focus on higher-growth markets such as North America, Southeast Asia, and the Middle East, and undertake selective M&A to in-fill new technologies and geographical expansion.

In financial terms, our focus is on PBT growth, EBIT margin enhancement, quality of earnings, and of course shareholder returns. On the next slide, we look at growth drivers.

We've recently undertaken a detailed 3-year plan, which sets our ambitions for the future organic development of the group, and I thought I would pull out some of the key focus areas. Firstly, the expansion of our existing technical sales reach includes particularly looking at developing the live and entertainment businesses.

Secondly, we have significant plans for businesses that are still in quite early stage of development, such as our software business. Thirdly, we look to continued market share gains.

We're significantly under-weighted in a number of key markets, but even in established markets, I believe there's lots of business for us to go after. Fourthly, we will use technology solutions to drive additional sales and efficiencies.

These include improved e-commerce offerings and AI solutions. Finally, we've identified areas for achieving future economies of scale.

These growth areas of course are all organic, and exclude the potentially significantly positive impact from our future M&A activities. Finally, in terms of our outlook, we've made a basic assumption of a challenging market continuing into into 2026.

However, we've done a lot of work in 2025, and we expect to see the benefits of that coming through this year, and we will continue with much of that work through 2026 and beyond. We have a focus on driving gross profit whilst ensuring our operations as efficient as they can be.

Our outlook for the full year remains unchanged. Thank you.

Luke

[unclear]. If we start off with Germany, you sort of described as tough in the year.

I think the last time we spoke about this, there was the expectation that towards the end of calendar 2025, there might have been the potential for federal government to unlock a bit of spending on that. What's your experience been with that, and is it rolling on to hope for this quarter and next quarter?

Then

if you can drill down into the 3.9% that you spoke about from AVIXA, which I guess begins at this year, doesn't it, and then goes on to 2030, how much of the 3.9% do you expect to be the price rises that you spoke about on page 2 or 3 in the presentation, and assume the rest is volume? Then finally on drones, yeah, really liked your slide on drones there, there wasn't a single mention of military in that entirely,

everything totally

everybody else these days, and there's a massive market in military drones,

and

any interest in being in it, if not, why not? Okay.

Let's start with the German market. The German government, as everyone will know, has a big program of investments in infrastructure in that market, part of it military, but also part of it investments in infrastructure for the country.

There was a special education scheme called DigitalPakt which finished, I think, halfway through 2024. They then promised or suggested there'd be another version of that, and that was called DigitalPakt 2, which is to form part of this big investment spending program.

We haven't seen that really happen yet. It's there, it's a program that I expect sitting on a shelf somewhere ready to be dusted off and launched.

Obviously, it's a regular question I ask of my colleagues whether they've seen any signs of orders coming through from that, but not. Yes, it's primarily in schools, yeah, I think universities as well.

It's an education-based program. Our education is a particularly big part of our German business, and of course coming between two special programs, the market dropped very quiet very very significantly waiting for the new investment of money to come through.

That's probably impacted on the education market in Germany. The simple answer to your question is I don't know, and we haven't seen any signs of it happening yet.

We know it's there. We know there's an intention.

I believe it's gone through all the different government sign-offs that are needed, but nothing's really come through. In our planning, we've decided that we really need to plan for that business assuming there is no great big uptick in this sort of spending, we need to have a business that's right for the market that's there, and if we get some big programs coming through, big investments, then we should be able to see a significant benefit from those.

Price rises and the 3.9% growth, I'm not sure how much of the AVIXA growth was driven by expected price rises. I suspect it probably wasn't.

There are differential rates of growth across the world, with countries like India being particularly high-growth, I think China is quite good, the European market I think was much lower growth. I don't know how much is affected by price rises.

I would think it's obviously very interesting to try and gauge it for our business for this year. We're keeping a track of price rises by vendors and when they're proposing to do them.

My gut feeling would tell me we might see 3% to 4% average price rise across the group, driven by chip pricing, which I don't imagine is going to reduce anytime very soon. That's a little bit of help maybe during the course of the year.

Then drones, we have avoided, of course, getting involved in military drones. I'm not entirely sure that's the right thing for our business.

Maybe it's something we should look at at some stage, but we've not really been on the front line of drone supplying. I think there is a very big market for drones outside direct military conflicts.

That business has gone very well. It's a big and growing market and outside the military.

I believe we've supplied drones for sort of training and for police, and then the uses of them are fantastic really in terms of their performance and what they achieve, but no current plans to get involved in military drone supplying. Hi.

Just three from me.

You don't have to have three just because he had three.

Make it four. Just to understand the kind of nature of the price and deflation a little bit more, is that more driven by competitive dynamics in the vendor market, are you seeing better try and take share through pricing decreases

and

that's affecting your vendors, or is it more on the demand side where people are just reluctant to buy and want lower price?

I'll answer that one, then you can ask your other two, otherwise I'll forget them. I think the price deflation that we've seen is primarily driven by a flat or in some cases declining market, but with manufacturers not adjusting their manufacturing output sufficiently to balance out pricing.

I think it may well be that the increase in chip prices will force particularly in displays, some of the display manufacturers to start increasing prices, because some of the increase in chip price are quite significant. I think it's a bit of demand, actually, and it's a bit of both.

Probably there in some parts of that market there's been a little bit less innovation in displays recently than maybe there was a few years ago, and also, instead of products being refreshed as quickly, the prices start to drop on current products rather than the price levels being maintained. Then

my second question is kind of related to that, specifically on the chip shortages. What I've been quite surprised at is how aggressive price increases have been for anything with memory components

in it.

I guess for AV equipment, one, is there any linkage between memory prices and AV market? Secondly, I think we're now starting to think about CPU shortages, potential price increases in there.

I guess the totality of that question is where are we at in terms of supply shortage-driven pricing increases, do you think we're at the start of the curve or the end of it?

It's quite difficult to say. I think manufacturers have quite a long-term view about it.

The chips in the products that we sell, I don't think are quite as significant as they might be in, say, a laptop or something, but they are still in most of the products that are sold in our industry. They are a part of that manufacturing cost, and that has had to drive some price increases across the market.

I don't know whether we're at the start of a big shortage yet. I haven't seen evidence yet of shortages of products, probably just more price realignment rather than product shortages.

Then

just final question on drones again. Just interested to see, you've already signed up DJI, which is by far the biggest manufacturer of drones,

but

how do you assess the rest of the vendor landscape? Is it a market you kind of get comfortable with and you can understand the vendors to start engaging with them quite quickly, or do you think you need to kind of appreciate the market a little bit more to kind of really go after?

I think we probably do. There are accessories and other products that we can offer alongside the drones, and that would hope would become a bigger part of that drone business.

We've built a really good relationship with DJI, and we'd hope to be able to develop their drones business across other territories in due course. Yeah.

Okay.

Thank you. As I say, a challenging year last year.

We did a lot of really good work, very impressed with the team. It was a tough year, but you can see tangible improvements in the business, and we're trying some new things, some new product areas, some new technology areas, and I think we're seeing the benefits of those, but it feels as though it's just the start of sort of future development of the business, we're very excited about that.

Hopefully, we'll have a fairly clear run in 2026 and be able to show what we're capable of. Thank you.