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Sales soar and profits double at Midwich

Microscope contributor

Midwich has navigated the worst recession in the history of the IT industry to record top and bottom line growth.

But the distributor has sounded a warning about the potential impact of pending public sector spending cuts on the channel this year and the need to pursue other growth sectors.

Sales in 2009 grew 6% year-on-year to £173.6m and profits after tax nearly doubled to £4.7m as it managed expenses and continued to carve out a niche in its core markets - printers, auto ID, digital imaging, monitors and AV kit.

Nick Culley, managing director at Diss-based Midwich, said the results had exceeded its expectations.

"We got our warehouse operating more efficiently, took some cost out of the business, gained exclusive distribution deals - most notably with InFocus projectors - and identified clusters of AV specialists aligned to certain verticals," he said.

It has been a positive first quarter for the channel in 2010, despite the icy weather conditions that hit the UK in January, but with the General Election looming many in the industry are bracing themselves for a challenging summer.

All political parties have expressed a desire to reduce the huge national debt, and IT will be vulnerable to budget cuts.

"Right now I don't see a significant threat in that respect, but I would be foolish to imagine that there will not be some projects which are scaled back or postponed," said Culley.

"The World Cup will be good for business as a lot of AV and IT dealers focus on the hospitality markets - pubs, clubs and gyms - and we are already seeing some upgrading kit," he added.

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