Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Pick up underappreciated growth story Midwich at a great price

Specialist distributor of AV (audio visual) equipment to the trade market Midwich (MIDW:AIM) has established a strong track record of growth since coming to the stock market in 2016.
Although there are added risks to consider when investing in smaller companies, we believe Midwich is a great opportunity to buy above average growth at a below average price.
Sales and adjusted operating profit have grown at a compound annual growth rate (CAGR) of 22% and 19% respectively, outperforming the wider AV market.
The global AV market is worth £219.2 billion and expected to grow at a CAGR of 5.9% a year over the five years to 2027 according to Avixa, the trade association for the professional AV market.
Midwich has historically grown faster than the market and in 2022 delivered 20% organic growth compared with just over 10% for the market.
The company’s strategy is to augment organic growth by acquiring two to four companies a year as it builds out new geographies and technologies.
Including acquisitions, revenue grew 41% in 2022 and the company said it has a healthy pipeline of acquisition targets. Post year end the company increased the size of its revolving banking facilities to £175 million from £80 million to support delivery of the pipeline.
Management estimates the company’s total addressable market is 15% of the total AV market implying a market share between 3% and 4% and hinting at a significant growth opportunity.
An experienced management team, strong customer relationships and an increasing focus on higher valued-added products are key competitive advantages which should support sustainable growth.
Midwich is a B2B (business to business) specialist working with over 600 vendors including blue chip makers such as Samsung, Sony, Logiteck, and Philips. It supports a comprehensive range of audio visual products including displays, projectors, technical, broadcast, lighting, audio, and unified communications.
It operates as the sole or largest in-country distributor for many of its vendors in their respective product sets. The firm has a diverse base of over 200,000 customers many of which are professional AV integrators and IT resellers such as Softcat (SCT) and Computacenter (CCC) servicing corporate (30% of sales), education (30% of sales), retail, residential and hospitality sectors.
Most of its products are used by commercial and educational establishments rather than consumers. The company’s depth of expertise and close contact with its clients keeps it at the forefront of market and technological developments.
Despite all these attractions the shares trade on just 12 times forecast earnings and offer a solid yield of around 4%.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Issue contents
Feature
- Why the Credit Suisse bailout has failed to calm investors’ nerves
- What an escalating AI-powered search war might mean for media stocks
- Investing in a world of higher rates
- What should your investment portfolio look like in your 70s?
- Discover the beneficiaries of China’s big reopening in 2023
- Why a company’s longevity is important to some of the best fund managers