(Alliance News) - Audio-visual equipment distributor Midwich Group PLC boosted its dividend Tuesday after interim revenue surged a fifth, despite profit dipping on higher costs amid acquisition activity.
For the six months ended June, pretax profit narrowed 4.2% to GBP11.3 million from GBP11.8 million the year prior. This was despite revenue rising 19% to GBP314.8 million from GBP264.1 million the year before.
Profit performance was hurt by a rise in administrative and distribution costs to GBP43.6 million from GBP33.2 million the year prior.
Adjusted pretax profit - excluding acquisition costs and other one-off charges - widened 6.2% to GBP13.7 million from GBP12.9 million the year before.
"The group has had another strong first half and I am pleased with our overall performance, particularly given political and economic uncertainties around the globe," Midwich Managing Director Stephen Fenby said.
"The increase in the group's gross margin percentage reflects strong performance from the core business and a positive contribution from the acquisitions made in 2018 and the first half of 2019," Fenby added. "The more specialist nature of the acquired businesses ensures that our value add to customers and vendors continues to increase."
Gross profit margin widened to 52.2% from 42.9% the year before.
"We continue to have a healthy pipeline of strategic opportunities and have invested in the group's acquisition and integration teams in the first half," Fenby continued. "We will continue our disciplined approach to acquire businesses that add value while both strengthening and diversifying our product offering and geographical reach."
Midwich proposed a 4.85 pence per share interim dividend, up from 4.60p the year prior.
"The strong performance reported in the first half and contributions from recent acquisitions, give the board confidence in the prospects for the group", Fenby said.
Shares in Midwich were unchanged at 500.00 pence in London on Tuesday.
Midwich Group (MIDW)