Full Year Results

About this update from Midwich Group Plc

[{"type":"text","content":"\n \n 18 March 2025 \n   \n Midwich Group plc \n (\"Midwich\" or the \"Group\") \n   \n 2024 Full Year Results \n   \n Record revenue and gross margins achieved in FY24, reflecting robust performance despite a continuing challenging market \n   \n Midwich Group (AIM: MIDW), a global specialist audio visual (\"AV\") distributor to the trade market, today announces its audited full year results for the year ended 31 December 2024. \n   \n Statutory financial highlights \n   \n \n \n \n \n \n \n \n Year to \n 31 December 2024 \n £m \n   \n \n \n Year to \n 31 December 2023 1 \n £m \n   \n \n \n Total growth \n % \n \n \n \n \n Revenue \n \n \n 1,317.0 \n \n \n 1,295.1 \n \n \n 1.7% \n \n \n \n \n Gross profit \n \n \n 234.3 \n \n \n 226.1 \n \n \n 3.6% \n \n \n \n \n Gross margin \n \n \n 17.8% \n \n \n 17.5% \n \n \n \n \n \n \n \n Operating profit \n \n \n 24.1 \n \n \n 41.6 \n \n \n (42.0%) \n \n \n \n \n Profit before tax \n \n \n 22.3 \n \n \n 36.5 \n \n \n (39.0%) \n \n \n \n \n Basic EPS - pence \n \n \n 15.69p \n \n \n 27.98p \n \n \n (43.9%) \n \n \n \n \n Total Dividend - pence per share 3 \n \n \n 13.0 \n \n \n 16.5 \n \n \n \n \n \n \n \n   \n Adjusted financial highlights 2 \n   \n \n \n \n \n \n \n \n Year to \n 31 December 2024 \n £m \n   \n \n \n Year to \n 31 December 2023 \n  £m \n   \n \n \n Total growth % \n \n \n Growth at constant currency % \n \n \n \n \n Revenue \n \n \n 1,317.0 \n \n \n 1295.1 \n \n \n 1.7% \n \n \n 3.5% \n \n \n \n \n Gross profit \n \n \n 234.3 \n \n \n 226.1 \n \n \n 3.6% \n \n \n 5.5% \n \n \n \n \n Gross margin \n \n \n 17.8% \n \n \n 17.5% \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n 48.3 \n \n \n 59.6 \n \n \n (19.0%) \n \n \n (17.4%) \n \n \n \n \n Adjusted operating profit margin % \n \n \n 3.7% \n \n \n 4.6% \n \n \n \n \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n 38.3 \n \n \n 50.0 \n \n \n (23.5%) \n \n \n (21.6%) \n \n \n \n \n Adjusted EPS - pence \n \n \n 26.24p \n \n \n 37.46p \n \n \n (30.0%) \n \n \n \n \n \n \n \n Adjusted cash flow conversion \n \n \n 97% \n \n \n 114% \n \n \n \n \n \n \n \n \n \n \n Adjusted net debt ratio \n \n \n 2.0x \n \n \n 1.1x \n \n \n \n \n \n \n \n \n \n \n   \n 1 Restated - see note 17 for details \n 2 See note 1 of the Group financial statements for definitions of non-GAAP measures and note 16 for the reconciliations of non-GAAP measures to statutory reported results. \n 3 Total of interim and final dividends \n   \n Financial highlights \n \n \n \n \n ·    \n \n \n Record revenue and gross margins, despite continued challenging macro conditions \n \n \n \n \n ·    \n \n \n Revenue increased 1.7% to £1,317.0m (2023: £1,295.1m) and up 3.5% on a constant currency basis \n \n \n \n \n ·    \n \n \n Highest ever gross profit margins of 17.8%, substantially ahead of the prior year (2023: 17.5%) \n \n \n \n \n ·    \n \n \n Adjusted operating profit of £48.3m (2023: £59.6m) reflects a resilient performance in a tough market, with strong Adjusted cash flow conversion of 97% \n \n \n \n \n ·    \n \n \n Net debt to adjusted EBITDA at the period end was 2.0x, in line with Board expectations \n \n \n \n \n ·    \n \n \n Proposed final dividend of 7.5p, bringing the 2024 full year dividend to 13.0p (2023: 16.5p) and dividend cover to 2.0x \n \n \n \n \n   \n Operational highlights \n \n \n \n \n ·    \n \n \n Strong performance in strategic product categories, reflecting the Group's strategy to focus on higher margin product areas \n \n \n \n \n ·    \n \n \n Group market share generally stable or increasing, despite the tough market conditions \n \n \n \n \n ·    \n \n \n Strong performance in North America with sales +28% and organic revenue up 7% \n \n \n \n \n ·    \n \n \n Cost mitigation actions undertaken in H2 2024, resulting in c.£5m of annualised savings achieved \n \n \n \n \n ·    \n \n \n Four small bolt-on acquisitions completed during the period, with integration progressing well \n \n \n \n \n ·    \n \n \n Compound annual growth in revenue and adjusted operating profit since IPO in 2016 of 17% and 13% respectively, with a strong return on capital. Testament to the strength of our long-term strategy and the quality of our teams \n \n \n \n \n ·    \n \n \n No M&A opportunities currently in late stages, but appetite for M&A remains in the medium term \n \n \n \n \n   \n Stephen Fenby, Managing Director of Midwich Group plc, commented: \n \"After three years of strong growth, 2024 was a challenging period for the Group. The business continued to be impacted by subdued investment in the education and corporate end user markets, along with significant price erosion in some mainstream product areas due to over-supply by manufacturers. Despite these factors, our strategy of focusing on technical product areas resulted in the business remaining robust, with revenue and gross profit growing to record levels.  \n   \n Our relative performance reflects the fundamental strength of the business, our customer and vendor relationships, our geographic and technical solution diversity and, most of all, the skills and dedication of our team. I believe that the Group is very well placed to benefit from an improvement in market conditions. \n   \n In the short term, continued price deflation in mainstream product areas is expected to cause challenges to the growth of the business. In the meantime, the Group continues to develop new revenue sources, and ensure we operate as efficiently as possible. \n   \n Our expected trading performance for the 2025 full year remains unchanged, with a higher weighting anticipated for the second half of the year.\" \n   \n Analyst meeting/webinar \n There will be a meeting and webinar for sell-side analysts at 9.30am GMT today, 18 March 2025, the details of which can be obtained from FTI Consulting: [email protected] . \n   \n For further information: \n   \n \n \n \n \n Midwich Group plc Stephen Fenby, Managing Director Stephen Lamb, Finance Director \n \n \n +44 (0) 1379 649200 \n \n \n \n \n Investec Bank plc   (NOMAD and Joint Broker to Midwich) \n Carlton Nelson / Ben Griffiths \n \n \n +44 (0) 20 7597 5970 \n \n \n \n \n Berenberg   (Joint Broker to Midwich) Ben Wright / Richard Andrews \n \n \n +44 (0) 20 3207 7800 \n \n \n \n \n FTI Consulting Alex Beagley / Tom Hufton /  Matthew Young \n \n \n +44 (0) 20 3727 1000 \n [email protected] \n \n \n \n \n About Midwich Group \n Specialisation at scale \n Midwich Group is a network of businesses which partner with the world's leading technology companies to accelerate their growth. Selling into over 50 countries from 23 global locations, the Group specialises in audiovisual technology - whether in state-of-the-art meeting rooms or on a festival main stage, our solutions help the world connect, communicate, or experience wow moments. \n Taking technology further \n With services ranging from product distribution to complex system design, focused marketing campaigns to flexible financing solutions, and showcase events to seed funding for startups, the Group's ever-expanding offering is designed to add value and solve its partners' biggest challenges. \n This has enabled the Group to maintain strong relationships with global manufacturers and a diverse customer base of over 24,000, including professional integrators, event production companies and IT resellers in sectors such as education, corporate, retail and live events. \n Enabling tomorrow \n With over 1,800 employees across the UK and Ireland, EMEA, Asia Pacific and North America, the company is committed to being a responsible employer. \n The Group wants to do the right thing and actively works to limit its impact on the environment and communities, and recognises the importance of giving back - find out more about our sustainability activities here. \n For further information, please visit www.midwichgroupplc.com \n \n Chair's Statement \n   \n Our presence, product diversification, and specialist Pro AV focus delivered strong gross margin improvement. \n   \n Midwich Group demonstrated resilience against a challenging market backdrop and I am pleased to be able to report further progress in 2024, including record revenue and gross margins, increased specialisation, further strategic investments and continued development of our leadership team. \n After an exceptional period of growth following the pandemic, which saw Group revenue in 2022 almost double the level in 2019, growth in the last two years has been characterised by strong demand for live events and entertainment solutions offset by challenging corporate and education end user markets. \n Our industry-leading position and diversity of geographies and technical solutions enabled the Group to respond to this changing market backdrop. Record revenue and gross margins in 2024 is testament to our team's exceptional resilience, knowledge and commitment. \n Whilst the Pro AV market has consistently grown above GDP, there were a number of unprecedented challenges that continued throughout 2024. The pressures of macroeconomic slowdowns, the impact of election cycles, higher interest rates and labour inflation continued to moderate demand for our mainstream products. An element of over-supply, as manufacturers struggled to accurately anticipate demand, also resulted in unprecedented levels of discounting in the displays market. The Group responded to this by focusing on value-added technical solutions and, as a result, achieved both gross margin improvements and further market share gains in many of our markets. \n At constant currency, Group revenue increased by 3.5% (organic -1.4%) to £1.32bn whilst a gross margin of 17.8% (2023: 17.5%) was a record. Overhead growth reflected the on-boarding of the eleven acquisitions completed in the last two years combined with the impact of inflation on the core cost base. Despite a tight focus on cost control, and some targeted restructuring during the year, which has delivered c.£5m in annualised savings, adjusted operating profit reduced to £48.3m (2023: £59.6m). \n In the face of extensive cost inflation in recent years, the Group has achieved compound annual growth in revenue and adjusted operating profit over the last five years of 14% and 8%, respectively, which is down to the strength of our long-term strategy and the quality of our teams. \n Looking to the future, the Group remains well placed to benefit from its global scale to develop and deploy digital solutions such as e-commerce and artificial intelligence (\"AI\"). These will position the Group well to deliver positive operating leverage and net margin improvements as demand across all markets returns to normal levels. \n With the start of 2025, the wider economic backdrop continues to remain challenging. Nevertheless, the Board believes that the structural increase in the use of AV solutions will see robust demand in the years ahead, with Midwich a provider of choice for our customer base. Over the longer term, the Pro AV market is forecast to grow by an average of 5.4% 1 per annum for the next five years and the Group is well placed to benefit from this. Despite the Group's significant revenue, our market share represents less than 4% of our estimated target addressable market value for the global Pro AV market. The Group continues to have ambitious growth plans and will continue to execute its strategy to deliver on this sizable market opportunity. \n Alongside record revenue, I am pleased that the Group was also able to complete four small strategically important acquisitions in the year. \n In January 2024, the Group acquired The Farm North West LLC and The Farm Norcal LLC (\"The Farm\"), which acts as an exclusive value-added sales agent to its vendor partners, primarily in the audio and technical video segments. Based in Silicon Valley, The Farm, which has now been integrated into the Group's US operation, Starin Marketing, expands the Group's US footprint and enhances its levels of customer and manufacturer support. \n In the second half of the year, the Group completed three specialist acquisitions in the UK for a total combined cash consideration of £12m. These higher-margin technical businesses operate primarily in the live events and fire security markets. \n These acquisitions bring new capabilities, technologies, customers and vendor relationships, further delivering on the Group's strategy to grow margins and earnings, both organically and through selective acquisitions of strong complementary businesses. \n The integration of these businesses is largely complete, and we have thoroughly enjoyed welcoming them to the Group . \n Over the medium term, we anticipate a continuation of our expansion strategy through both organic growth and acquisition of complementary businesses and believe that our balance sheet and bank facilities position us well to achieve this. The medium term acquisition pipeline remains healthy, and the management team continues to review attractive opportunities. \n Dividend \n The Board understands the importance of dividends for many of our investors and is pleased to recommend a final dividend of 7.5p per share which, if approved, will be paid on 4 July 2025 to all shareholders on the register as on 23 May 2025. The last day to elect for dividend reinvestment (\"DRIP\") is 13 June 2025. Coupled with the interim dividend of 5.5p per share, this represents a total dividend for the year of 13.0p per share (2023: 16.5p). The combined value of the interim and proposed final dividends is covered two times by adjusted earnings (2023: 2.3 times). \n Given the challenging market backdrop, the Board believes that the full year dividend represents an appropriate balance between continuing to reward shareholders and maintaining a strong balance sheet. \n Over the medium term the Board continues to support a progressive dividend policy to reflect the Group's planned growth and cash generation. \n Corporate governance \n Membership of the Board comprises individual directors with significant and complementary skills and experience. Board composition is kept under review to ensure it meets ongoing governance requirements, including independence and diversity, and that board members collectively have appropriate skills and experience to guide the future development and growth of the business. The Board met ten times during the year and received regular updates from senior leadership. \n In line with the Board's succession planning, and the evolving governance environment, I was delighted to welcome Alison Seekings to the Board in March 2024. A fourth independent Non-executive Director, Alison brings a wealth of experience in accounting, governance and technology companies. Alison became Audit Committee Chair in May 2024 and is a member of the other Board sub-Committees. \n Having joined the Board in May 2016, Mike Ashley is expected to retire from his Non-executive Director role later this year and a search is currently underway for his successor. Hilary Wright is expected to become Chair of the Remuneration Committee when Mike retires. \n I have been Chair of the Board since IPO in May 2016 and it is proposed that I continue in the role for a limited further period. The Board considers continuity in the Chair role important through a period of integrating new Board members and in supporting executive management in returning the business to profitable growth. Planning for the succession of the Chair role will commence in 2025 with a view to my standing down in due course once a suitable replacement is found. \n In December 2024, Andrew Garnham, formerly deputy Company Secretary, was appointed as Group Company Secretary. The Board remains satisfied that it has a suitable balance between independence and knowledge of the business to allow it to discharge its duties and responsibilities effectively. \n In line with prior years, the Board completed a self-evaluation exercise during 2024, reinforcing our commitment to, and success in, establishing a strong corporate governance framework. We took the opportunity of this review to confirm our strong and effective governance and reaffirmed the role of the Board and its individual members in monitoring compliance with the revised QCA code. \n The Nominations Committee has reviewed the skills and experience of Board members individually and collectively. There were no major issues or concerns raised about the effectiveness of the Board or its individual members and concluded that the size and composition of the Board remain appropriate at this stage of the Group's development. \n Sustainability \n The Board continues to take a lead in social responsibility. Having introduced Task Force on Climate-related Financial Disclosures (\"TCFD\") aligned reporting last year, we have made further progress in 2024. In February, a new Board Sustainability sub-Committee was established, chaired by Hilary Wright, to further increase our focus on this area and we have included our inaugural Sustainability Committee Report in this year's report. \n The Group has a broad international footprint with the majority of its revenue coming from outside the UK and Ireland and the Board welcomes the cultural diversity that this brings. The Midwich culture is an open and welcoming one and we have been recognised for this. The Board understands the importance of diversity of gender and ethnicity and is committed to ensuring that diversity and inclusion will be key considerations in the appointment of future directors and senior leaders. \n The Group is committed to doing the right thing for the wider society; community engagement is embedded in our DNA. Our teams are passionate about making a difference and once again stepped up their time commitment for our nominated good causes. I'm delighted to report our Gift of AV programme, once again, raised a record amount for charity in the year. \n This year we have continued to enhance our work on formalising our approach to environmental matters. Supported by a specialist third party, we have expanded our mandatory climate-related financial disclosures, incorporating the TCFD aligned reporting, to include broad Scope 3 data for the Group. This is in addition to reporting on our environment-related governance, risk management, scenario analysis, carbon reporting and net zero target setting. \n The Group continues to apply the QCA code as its governance framework and has assessed compliance with the newly revised QCA code (November 2023). The Board welcomes the enhanced QCA code requirements and has chosen to adopt the vast majority of additional code requirements this year. \n Both our executive and independent Directors continue also to welcome feedback from our shareholders and wider stakeholders. We engage with our largest shareholders through invitations to discuss matters with Committee Chairs and Directors, regular face-to-face meetings and inviting them to join us for office/showroom tours and at our AV trade shows. \n People \n The success of any company is down to the quality of its leadership and its people. In 2024, our teams demonstrated their resilience and faced up to challenging market conditions with commitment and determination. I believe that we have the best teams in the industry, and they have once again delivered exceptional service to vendors, customers and end users alike. Whilst some competitors have faltered as markets have become more challenging, our market share and customer satisfaction levels continue to demonstrate the core resilience of the Midwich business. \n The Board has a strong belief in rewarding success and ensuring that engagement levels are high. Share ownership by our people is a core part of our engagement strategy and I believe that high participation in employee share ownership and incentive plans across the Group continues to incentivise exceptional business performance. \n Our culture and values are at the heart of how we do everything in the Group, and we have continued to invest resources in maintaining the spirit of Midwich. This includes a step up in both our environmental and community engagement in the year. Our teams address every challenge with commitment and determination, and it is this positive approach that is the main driver of our market share gains and long-term growth. \n The Board has regular interaction with the Executive Directors and senior leadership, together with the Managing Directors of our key operating units. The Board is confident that our senior teams are working well and show the strength and depth of the Group's leadership to support future growth. \n On behalf of the Board, I would like to thank all employees and our partners for their commitment and hard work and congratulate them on achieving an impressive performance in a challenging year. \n Andrew Herbert \n Non-executive Chair \n   \n 1 Source: AVIXA. \n   \n Managing Director's Review \n   \n Robust performance in a challenging market. \n   \n Overview \n In 2023, I reported that challenging macroeconomic factors had started to have an impact on the business, particularly with respect to demand for our more mainstream products. These challenging conditions continued throughout 2024 - the longest period of suppressed demand that I can recall. The impact of lower demand on our business has been exacerbated by certain manufacturers continuing to over-supply product into the market, which in turn has led to significant falls in average selling prices in categories such as large format and interactive displays. \n For many years, our focus has been to increase our strength in higher-margin, more technical products such as audio, lighting and technical video. We have had considerable success with this strategy, and indeed aggregate revenue from these three categories increased by 8% in the year. \n However, revenue from some of our mainstream product categories declined during the year, albeit by less than the decline in these markets overall. Displays and projection continue to be important product categories for the business, and the tough conditions in these markets still have an impact on the business. \n Amid the difficult market conditions which continued throughout 2024, we delivered record revenue of £1.3bn. The impact of mix improvements pushed our gross margin from 17.5% to 17.8%. However, overheads increased by more than gross profit (driven mostly by acquisitions made in 2023 and 2024, investment in growth markets, inflation and higher interest charges), with the result that our adjusted operating profit declined by 17.4%^ and adjusted profit before tax fell by 21.6%^ to £38.3m. \n The business has experienced and weathered occasional periods of significant demand reduction - such as in the financial crisis and COVID-19. I would liken 2024 to one of these periods. \n With a tough market backdrop, the business has responded well by focusing on the needs of our customers and vendors. This has been a very challenging year for our team, and I congratulate everyone for their efforts and performance. The Group remains in a strong strategic and financial position, and we continue to maintain and take market share in our core regions, which is a testament to the work of our team. \n Business performance \n Group revenue increased by 1.7% to £1.3bn in 2024 (constant currency 3.5%), with gross margins reaching 17.8% (2023: 17.5%). \n Both were records for the Group and reflect organic growth in the North American businesses with small organic declines in the rest of the world. \n The increase in gross margin reflects the favourable product mix benefit from our strategic focus on value-added technical products, driven particularly by our acquisition programme in 2023 and, to a lesser extent, 2024. We take a measured approach to investment, investing in our teams and operational capabilities whilst targeting improvements in operating profit margins. \n Despite undertaking a cost reduction programme in H2 2024, adjusted operating profit decreased by 17.4%^ to £48.6m, which represents an adjusted operating profit margin of 3.7%, down from 4.6% in the prior year. Disciplined working capital management contributed to strong operating cash generation, with operating cash at 97% of adjusted EBITDA ahead of our long-term average of c80%. This helped mitigate some of the headwinds from higher interest rates. \n Adjusted profit before tax of £38.3m (2023: £50.0m) was 21.6%^ below 2023. We ended the year with leverage (adjusted net debt to adjusted EBITDA) of 2.0 times (2023: 1.1 times) which was in line with Board and market expectations. This, combined with our long-term bank facilities, provides capacity for the Group to continue to pursue both organic and inorganic opportunities. \n Market share gains in end user markets \n Third party data* for 2024 shows double digit declines in a number of the mainstream Pro AV product categories and an overall mid-single digit decline in the Pro AV distribution market. The Group's overall growth of 1.7%, with an organic decline of 1.4%, demonstrates further market share gains for Midwich in 2024. The Group adapted to the evolving market conditions, working closely with our customers and vendors to meet the changes in market demand. In broad terms, we categorise our products into mainstream and specialist technical categories. \n Mainstream products cover displays and projectors. These categories comprised an aggregate of 31.3% of Group revenue in 2024 (2023: 34.9%). Specialist categories cover technologies which require greater pre and post-sales support and hence tend to carry higher margins. This group covers categories such as audio, technical video and broadcast and represented 64.2% of total sales compared with 61.2% in 2023. \n A core part of the Group's long-term strategic focus is to become more specialist. Displays and projection are at the core of the majority of Pro AV projects, and we are the leading distributor of high-end displays and projection in many of our businesses. Despite a challenging large format display market, which third party data* indicates declined at double digit rates in 2024, our display and projection business reduced by only 8.9% in the year, indicating a continued growth in market share in these categories. LED solutions, which continue to gain share from displays and projection in the larger format categories, continued to experience strong growth, up 8% in the year, and we believe we have established a strong market position in this category. These products require a higher level of expertise to distribute effectively, and hence tend to carry a higher overall gross margin than mainstream products. \n Growing our technical product categories has been a particular focus of the business for many years, and in 2024 revenues increased by 5%. This was driven by increased demand from entertainment and live events and also the full year impact of acquisitions undertaken in 2023. There was strong growth in both professional audio and lighting, particularly in the UK&I and North America. \n Investing in the future \n The global Pro AV market is in excess of $300bn^^, of which our assessment of the Group's Target Addressable Market (\"TAM\") is c$45bn. Whilst I believe that we are the leading global specialist Pro AV distributor, our £1.3bn revenue in 2024 represents less than 1% of the global market and 3-4% of our TAM. The opportunity for the future remains enormous and we will continue to target growth both organically and through acquisition. \n In the last two years we have undertaken significant M&A activity, completing eleven acquisitions. This was a significant step up from our post-IPO average of two to three deals per annum. We acquire businesses to enter new geographies or add to our product set and technical capabilities. The four transactions in 2024 brought us further technical expertise and sales presence on the west coast of the US, as well as additional lighting and security expertise and a cable assembly business in the UK. \n Our values and culture \n Midwich Group is our people, their skills, experience, relationships and attitude. We promote trust, honesty, hard work, integrity, humility and creativity and value everyone's ideas and contribution. Team engagement is of critical importance, and we saw improvements in our engagement survey in 2024. Our approach is to reward success, and we continue to adapt to the changing work environment. In the last twelve months, we have increased our global collaboration, stepped up employee benefits and increased our engagement with our nominated charities, our communities and our environment. \n Outlook \n The Group has a proven capability to grow ahead of its markets both organically and through acquisition. Whilst the challenging market conditions seen in 2024 have continued into 2025, and we do not expect a near-term improvement in market growth, I believe the Group is well positioned to take advantage of an upturn in demand. \n Rather than just waiting for market conditions to improve, the team has sought to improve the business through a combination of new technology and vendor launches, and improving productivity. \n We have further enhanced the strength of our relationships with customers and vendors alike over the last twelve months. However, our team is not complacent; we recognise that we operate in a competitive market where both vendors and customers have a choice of which partners to work with. Of our top 40 vendors in 2024, we were either exclusive or the number one distributor for the vast majority. Our focus is to ensure that we provide the best service possible and continue to develop our offering. \n Having made eleven acquisitions in a short space of time, we took a decision to not pursue other transactions in the short term. We do, however, continue to engage with potential acquisitions and have an extensive opportunity pipeline and several interesting conversations in early stages. \n In the short term, continued price deflation in mainstream product areas is expected to cause challenges to the growth of the business. In the meantime, the Group continues to develop new revenue sources, and ensure we operate as efficiently as possible. \n With the global AV market expected to continue growing over the medium to long term, our Group is very well positioned for the future. \n Stephen Fenby \n Group Managing Director \n   \n ^       Constant currency. \n *       Futuresource Consulting. \n ^^   Source: AVIXA. \n   \n Financial review \n   \n A resilient performance underpinned by strong operating cash generation. \n Against a challenging market backdrop the Group achieved record revenue and gross margins in 2024. Group revenue increased to £1.32bn (2023: £1.30bn). Macroeconomic headwinds continued to impact demand for our mainstream products, but the Group's focus on technical product categories, which represent 64% of the Group's revenues, resulted in a record gross margin of 17.8% (2023: 17.5%). \n Statutory operating profit was £24.1m (2023: £41.6m). Adjusted operating profit of £48.3m (2023: £59.6m) reflected the impact of price discounting of mainstream products due to excess product supply. \n Distribution and administrative overheads increased as anticipated during the year, primarily due to the acquisitions completed in the last two years, labour cost inflation, which eased during the year, and further investment in the Middle East. \n Given the continuing tough market conditions, the Group took actions to reduce costs during the year including both lower discretionary expenditure and targeted restructuring activity. This resulted in lower overheads in the second half of the year and positions the Group well for the year ahead. Exceptional cost in the year included restructuring costs, the disposal of the Group's ERP prototype, following \"go live\" of the base system and the impact of a fire in the UAE. The damage from the fire is insured and expected to be recovered in full in 2025 . \n Statutory financial highlights \n \n \n \n \n \n \n \n Year to 31 \n December 2024 \n £m \n \n \n Year to 31 \n December 2023 \n (Restated 2 ) \n £m \n \n \n Total growth \n % \n \n \n \n \n Revenue \n \n \n 1,317.0 \n \n \n 1,295.1 \n \n \n 1.7% \n \n \n \n \n Gross profit \n \n \n 234.3 \n \n \n 226.1 \n \n \n 3.6% \n \n \n \n \n Operating profit \n \n \n 24.1 \n \n \n 41.6 \n \n \n (42.0%) \n \n \n \n \n Profit before tax \n \n \n 22.3 \n \n \n 36.5 \n \n \n (39.0%) \n \n \n \n \n Profit after tax \n \n \n 17.0 \n \n \n 28.9 \n \n \n (41.4%) \n \n \n \n \n Basic EPS - pence \n \n \n  15.69p \n \n \n  27.98p \n \n \n (43.9%) \n \n \n \n \n   \n Adjusted financial highlights 1 \n \n \n \n \n \n \n \n Year to 31 December 2024 \n £m \n \n \n Year to 31 \n December 2023 \n (Restated 2 ) \n £m \n \n \n Total growth \n % \n \n \n Growth at \n constant \n currency \n % \n \n \n \n \n Revenue \n \n \n 1,317.0 \n \n \n £1,295.1 \n \n \n 1.7% \n \n \n 3.5% \n \n \n \n \n Gross profit \n \n \n 234.3 \n \n \n 226.1 \n \n \n 3.6% \n \n \n 5.5% \n \n \n \n \n Gross profit margin % \n \n \n 17.8% \n \n \n 17.5% \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n 48.3 \n \n \n 59.6 \n \n \n (19.0%) \n \n \n (17.4%) \n \n \n \n \n Adjusted operating profit margin % \n \n \n 3.7% \n \n \n 4.6% \n \n \n \n \n \n \n \n \n \n \n Adjusted profit before tax \n \n \n 38.3 \n \n \n 50.0 \n \n \n (23.5%) \n \n \n (21.6%) \n \n \n \n \n Adjusted profit after tax \n \n \n 28.2 \n \n \n 38.5 \n \n \n (26.6%) \n \n \n \n \n \n \n \n Adjusted EPS - pence \n \n \n 26.24p \n \n \n 37.46p \n \n \n (30.0%) \n \n \n \n \n \n \n \n  1   Definitions of the alternative performance measures are set out in note 1 to the consolidated financial statements. \n   \n Strong operating cash generation underpinned the resilient trading performance, with adjusted cash flow conversion at 97% (2023: 114%). Adjusted net debt increased to £130.6m at 31 December 2024 (2023: £82.6m) due to further expenditure on acquisitions and deferred consideration. \n   \n Currency headwinds reduced both Group revenue and adjusted operating profit in the year by 1.8% and 1.6% respectively. The currency movements in the prior year had a negligible impact on these metrics. \n Organic revenue declined by 1.4% (2023: +0.8%) as a result of weaker mainstream product demand which was partially offset by growth in technical product sales. \n Adjusted EPS at 26.24p in 2024 (2023: 37.46p) was impacted by both the change in adjusted operating profit and the equity issue in June 2023. \n The Group's operating segments are the UK and Ireland, EMEA, Asia Pacific and North America. The Group is supported by a central team. \n   \n Regional highlights \n \n \n \n \n \n \n \n Year to 31 \n December 2024 \n £m \n \n \n Year to 31 \n December 2023 \n (Restated 2 ) \n £m \n \n \n Total \n growth \n % \n \n \n Growth at \n constant \n currency \n % \n \n \n Organic \n growth \n % \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n 476.4 \n \n \n 478.3 \n \n \n (0.4%) \n \n \n (0.3%) \n \n \n (3.1%) \n \n \n \n \n EMEA \n \n \n 569.9 \n \n \n 588.1 \n \n \n (3.1%) \n \n \n (0.6%) \n \n \n (2.7%) \n \n \n \n \n Asia Pacific \n \n \n 45.9 \n \n \n 48.0 \n \n \n (4.3%) \n \n \n (1.3%) \n \n \n (1.3%) \n \n \n \n \n North America \n \n \n 224.8 \n \n \n 180.7 \n \n \n 24.4% \n \n \n 28.1% \n \n \n 7.0% \n \n \n \n \n Total global \n \n \n 1,317.0 \n \n \n 1,295.1 \n \n \n 1.7% \n \n \n 3.5% \n \n \n (1.4%) \n \n \n \n \n Gross profit margin \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n 18.0% \n \n \n 18.7% \n \n \n (0.7)ppts \n \n \n \n \n \n \n \n \n \n \n EMEA \n \n \n 16.8% \n \n \n 16.1% \n \n \n 0.7ppts \n \n \n \n \n \n \n \n \n \n \n Asia Pacific \n \n \n 16.4% \n \n \n 17.4% \n \n \n (1.0)ppts \n \n \n \n \n \n \n \n \n \n \n North America \n \n \n 20.1% \n \n \n 18.6% \n \n \n 1.5ppts \n \n \n \n \n \n \n \n \n \n \n Total global \n \n \n 17.8% \n \n \n 17.5% \n \n \n 0.3ppts \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit 1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK & Ireland \n \n \n 19.7 \n \n \n 27.1 \n \n \n (27.2%) \n \n \n (27.0%) \n \n \n \n \n \n \n \n EMEA \n \n \n 24.8 \n \n \n 28.1 \n \n \n (11.8%) \n \n \n (9.6%) \n \n \n \n \n \n \n \n Asia Pacific \n \n \n (0.8) \n \n \n (0.3) \n \n \n (237%) \n \n \n (249%) \n \n \n \n \n \n \n \n North America \n \n \n 9.3 \n \n \n 9.5 \n \n \n (1.0%) \n \n \n 1.8% \n \n \n \n \n \n \n \n Group costs \n \n \n (4.7) \n \n \n (4.8) \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total global \n \n \n 48.3 \n \n \n 59.6 \n \n \n (19.0%) \n \n \n (17.4%) \n \n \n \n \n \n \n \n Share of profit from associate \n \n \n 0.1 \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted net finance costs \n \n \n (10.1) \n \n \n (9.6) \n \n \n (4.8%) \n \n \n (4.2%) \n \n \n \n \n \n \n \n Adjusted profit before tax 1 \n \n \n 38.3 \n \n \n 50.0 \n \n \n (23.5%) \n \n \n (21.6%) \n \n \n \n \n \n \n \n   \n 1    Definitions of the alternative performance measures are set out in note 1 to the consolidated financial statements. \n 2    Restated, see note 17 for further details \n   \n The financial performance of each segment (at constant currency growth rates) during the year was: \n North America \n This segment, which includes the United States and Canada (acquired in June 2023) grew by 28.1% (2023: 45.5%) with organic growth of 7.0% (2023: 8.1%). After an exceptional first half, growth slowed towards the end of the year reflecting the impact of expected vendor changes in Canada. Higher-margin acquisition mix impact and projects led to an exceptional gross margin of 20.1% (2023: 18.6%). Adjusted operating profit was broadly in line with the prior year reflecting the impact of integration costs for The Farm and investment at SFM. \n UK & Ireland \n UK&I market demand continued to be subdued in the period with revenue largely flat year on year. Technical product categories remained strong whilst demand for mainstream products was impacted by an unusual level of discounting attributable to product over-supply. Gross margin held up well at 18.0% (2023: 18.7%). Both acquisitions and inflation impacted overheads and, despite cost reduction activity during the year, adjusted operating profit reduced to £19.7m (2023: £27.1m). \n EMEA \n The EMEA segment revenue was marginally down on the prior year. There was strong growth in Southern Europe and the Middle East due to demand for live events and entertainment solutions. This was offset by softer demand in Northern Europe by corporate and education customers. The stronger, higher-margin, technical sales improved gross margin to 16.8% (2023: 16.1%). The region produced an adjusted operating profit of £24.8m (2023: £28.1m). \n Asia Pacific \n The Asia Pacific segment, which is mainly Australia, continues to see a high level of competition in a subdued market. Revenue reduced by 1.3% to £45.9m (2023: -7.3% to £48.0m), generating gross profit of £7.5m (2023: £8.3m) at a gross profit margin of 16.4% (2023: 17.4%). \n Adjusted operating losses were £0.8m (2023: £0.3m profit). The Board believes that the actions underway in APAC will see the region return to profitability in time. \n Group costs \n Group costs for the year were £4.7m (2023: £4.8m). Group costs include central support for sales, finance, compliance, human resources, information technology and executive management. \n Exceptional costs and adjusting items \n Adjusted operating profit is stated before £12.0m of exceptional items comprising: \n \n \n \n \n ·    \n \n \n Restructuring costs of £7.7m (2023: £nil), of which £3m related to Group-wide cost reduction activities undertaken during the year, which are expected to lead to savings of approximately £5m annually from 2025 onwards. There was an additional one-off charge of £4.7m related to the disposal of the Group's ERP prototype system (see note 3 for more details); \n \n \n \n \n ·    \n \n \n A £4.3m loss of assets following a warehouse fire in Dubai in December 2024. This amount is insured and expected to be recovered in full in 2025. \n \n \n \n \n   \n   Other adjusting items were: \n \n \n \n \n ·    \n \n \n Acquisition-related expenses, which reduced to £1.1m (2023: £1.5m) due to fewer acquisitions (four) in the year (2023: seven); \n \n \n \n \n ·    \n \n \n A credit of £1.3m (2023: £5.3m charge) in respect of share-based payments and associated taxes which arose as a result of a reduced likelihood of certain long-term incentive scheme targets being achieved; and \n \n \n \n \n ·    \n \n \n Amortisation of acquired intangibles of £12.4m (2023: £11.2m). \n \n \n \n \n Profit before tax \n The Group reported a profit before taxation of £22.3m (2023: £36.5m). Profit before tax is stated after the net interest costs on borrowings for historical acquisition investments and working capital of £10.5m (2023: £9.6m). Finance costs increased during the year mainly because of the increase in net debt during the period. \n Profit before tax was impacted by a total gain of £7.4m (2023: £4.5m) in relation to the change in valuation of both deferred consideration and put and call options, and the revaluation of loans and financial instruments. In 2024, there was also a one-off gain of £1.2m arising when the Group purchased the remaining 70% of an associate undertaking which resulted in a one-off gain on the initial investment (note 4 ). \n Adjusted profit before tax of £38.3m (2023: £50.0m) decreased by 21.6% (constant currency) (2023: +11.1%). A reconciliation of the adjustments to statutory measures is set out on note 16 . \n Tax \n The adjusted effective tax rate was 26.3% in 2024 (2023: 23.1%), which reflects the mix of tax rates in the geographies where the Group operates. \n Earnings per share \n Basic earnings per share is calculated on the total profit of the Group attributable to shareholders. Basic EPS for the year was 15.69p (2023: 27.98p). Adjusted EPS decreased by 30% (2023: +4%) to 26.24p (2023: 37.46p). The EPS growth metrics were impacted by the equity issued in 2023. \n   \n \n \n \n \n \n \n \n Year to \n 31 December \n 2024 \n £m \n \n \n Year to \n 31 December \n 2023 \n £m \n \n \n \n \n Adjusted operating profit \n \n \n 48.3 \n \n \n 59.6 \n \n \n \n \n Add back depreciation and unadjusted amortisation \n \n \n 10.9 \n \n \n 9.9 \n \n \n \n \n Adjusted EBITDA \n \n \n 59.2 \n \n \n 69.5 \n \n \n \n \n (Increase)/Decrease in stocks \n \n \n (8.1) \n \n \n 10.5 \n \n \n \n \n Decrease in debtors \n \n \n 13.8 \n \n \n 9.6 \n \n \n \n \n (Decrease) in creditors 1 \n \n \n (7.3) \n \n \n (10.0) \n \n \n \n \n \n Adjusted cash flow from operations \n \n \n \n \n 57.6 \n \n \n \n \n 79.6 \n \n \n \n \n \n \n Adjusted cash flow conversion \n \n \n \n \n 97% \n \n \n \n \n 114% \n \n \n \n \n \n   \n 1    Excluding the movements on cash settled share based payments and employer taxes on share based payments. \n   \n The Group's adjusted cash flow conversion, calculated comparing adjusted cash flow from operations with adjusted EBITDA, was 97% (2023: 114%). Strong working capital management, together with 3.5% (constant currency) revenue growth in 2024, resulted in cash conversion ahead of the long-term average for the Group. Our expectation of long-term adjusted cash flow conversion remains between 70% and 80%. \n Gross capital spend on tangible assets was £5.4m (2023: £5.6m) and included investment in facilities together with rental asset purchases in the UK and Ireland. An investment of £9.5m (2023: £10.4m) in intangible fixed assets included £9.3m (2023: £10.1m) in relation to the Group's new ERP solution which went live in its first country in the year. \n Dividend \n The Board has recommended a final dividend of 7.5p per share, which, together with the interim dividend of 5.5p per share, gives a total dividend for 2024 of 13.0p per share (2023: 16.5p). If approved by shareholders at the AGM, the final dividend will be paid on 4 July 2025 to shareholders on the register on 23 May 2025. The last day to elect for dividend reinvestment (\"DRIP\") is 13 June 2025. \n Net debt \n Net debt at 31 December 2024 increased to £153.4m from £106.2m at 31 December 2023. The Group's reported net debt continues to be impacted by the adoption of IFRS 16, which results in £22.8m of lease liabilities (2023: £23.6m) being added to net debt. As noted in the prior year, the Group's focus is net debt excluding leases (\"adjusted net debt\"). The impact of leases on net debt is excluded from the Group's main banking covenants. \n Adjusted net debt at 31 December 2024 was £130.6m (2023: £82.6m). This increase can be largely attributed to payments totalling £38.2m (2023: £52.0m) for acquisition and deferred consideration payments in the year. \n The Group utilises a £175m revolving credit facility which matures in mid-2028. This facility is supported by six banks and has an adjusted net debt to adjusted EBITDA covenant of 3x and an adjusted interest cover covenant ratio of 4x adjusted EBITDA. The EBITDA for covenants is calculated on a historical twelvemonth basis and includes the full benefit of the prior year's earnings from any business acquired. \n Most of the Group's other borrowing facilities are to provide working capital financing. Whilst the use of such facilities is typically linked to trading activity in the borrowing company, these facilities provide liquidity, flexibility and headroom to support the Group's organic growth. As at 31 December 2024, the Group has access to total facilities of over £300m (2023: over £300m). \n Goodwill and intangible assets \n The Group's goodwill and intangible assets of £184.0m (2023: £168.2m) mainly arise from the various acquisitions undertaken. Each year, the Board reviews goodwill for impairment and, as at 31 December 2024, the Board believes there are no material impairments. The intangible assets arising from business combinations, for exclusive supplier contracts, customer relationships and brands, are amortised over an appropriate period. \n Working capital \n Working capital management is a core part of the Group's performance. Growth in working capital in the year was aligned with the overall growth in Group revenue. As at 31 December 2024, the Group had working capital (trade and other receivables plus inventories less trade and other payables) of £155.8m (2023: £154.6m). This represented 11.8% of current year revenue (2023: 11.9%). \n The Group uses a range of different techniques to write down inventory to the lower of cost and net realisable value, including a formulaic methodology based on the age of inventory. The aged inventory methodology writes down inventory by a specific percentage based on time elapsed from the purchase date. There was no change in this methodology in the year. As at 31 December 2024, the Group's inventory provision was £16.2m (8.5% of cost) (2023: £18.5m, 10.0% of cost). \n Statutory measures \n The Group reports alternative performance measures, which are defined in note 1 to the consolidated financial statements. These measures reflect the key metrics used in the day-to-day management of the Group. \n The alternative profit-related performance measures exclude acquisition-related costs, impairments, certain share based payments and a number of non-cash-related finance charges related to the revaluation of financial instruments. Users should exercise caution in relying on alternative performance measures which should be seen as supplementary information in addition to the statutory disclosures. \n Adjusted return on capital employed \n Adjusted return on capital employed is an alternative performance measure (see note 1 to the consolidated financial statements for the definition). \n The Directors believe that this is an important measure of the investment returns of the Group. \n   \n \n \n \n \n Calculation \n \n \n Reference to the financial statements \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Total equity \n \n \n Group balance sheet \n \n \n 189,154 \n \n \n 196,144 \n \n \n \n \n Total net debt \n \n \n Group balance sheet \n \n \n 153,429 \n \n \n 106,191 \n \n \n \n \n Accumulated amortisation of acquired intangibles \n \n \n Intangible assets note \n \n \n 64,495 \n \n \n 52,969 \n \n \n \n \n Right of use leased assets \n \n \n Group balance sheet \n \n \n (19,038) \n \n \n (21,051) \n \n \n \n \n Acquisition-related liabilities \n \n \n Group balance sheet \n \n \n 17,275 \n \n \n 38,080 \n \n \n \n \n Closing capital employed \n \n \n \n \n \n 405,315 \n \n \n 372,333 \n \n \n \n \n Average capital employed \n \n \n \n \n \n 388,824 \n \n \n 340,169 \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n 48,299 \n \n \n 59,593 \n \n \n \n \n Adjusted return on capital employed \n \n \n \n \n \n 12.4% \n \n \n 17.5% \n \n \n \n \n   \n Average capital employed increased in the year, largely as a result of the full year impact of prior year acquisitions combined with four further acquisition completed in 2024. \n Average return on capital was impacted by challenging market conditions in 2024, which reduced adjusted operating profit performance. \n   \n \n \n   \n Adjustments to reported results \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Operating profit \n \n \n 24,133 \n \n \n 41,583 \n \n \n \n \n Acquisition costs \n \n \n 1,124 \n \n \n 1,489 \n \n \n \n \n Exceptional costs (note 3 ) \n \n \n 11,962 \n \n \n - \n \n \n \n \n Share based payments \n \n \n (888) \n \n \n 4,738 \n \n \n \n \n Employer taxes on share based payments \n \n \n (419) \n \n \n 603 \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n 12,387 \n \n \n 11,180 \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n 48,299 \n \n \n \n \n 59,593 \n \n \n \n \n \n Profit before tax \n \n \n 22,311 \n \n \n 36,547 \n \n \n \n \n Acquisition costs \n \n \n 1,124 \n \n \n 1,489 \n \n \n \n \n Exceptional costs (note 3 ) \n \n \n 11,962 \n \n \n - \n \n \n \n \n Share based payments \n \n \n (888) \n \n \n 4,738 \n \n \n \n \n Employer taxes on share based payments \n \n \n (419) \n \n \n 603 \n \n \n \n \n Amortisation of brands, customer and supplier relationships \n \n \n 12,387 \n \n \n 11,180 \n \n \n \n \n Derivative fair value movements and foreign exchange gains and losses on borrowings for acquisitions \n \n \n (1,208) \n \n \n 659 \n \n \n \n \n Gains and losses on deferred and contingent consideration \n \n \n (6,645) \n \n \n (4,150) \n \n \n \n \n Gains and losses on put option liabilities \n \n \n 834 \n \n \n (1,063) \n \n \n \n \n Gain on remeasurement of previously held equity interest \n \n \n (1,205) \n \n \n - \n \n \n \n \n Adjusted profit before tax \n \n \n 38,253 \n \n \n 50,003 \n \n \n \n \n Net finance costs \n \n \n (10,527) \n \n \n (9,554) \n \n \n \n \n Foreign exchange derivative gains/(losses) \n \n \n 396 \n \n \n (60) \n \n \n \n \n Investment derivative gains \n \n \n 1 \n \n \n - \n \n \n \n \n Adjusted net finance costs \n \n \n (10,130) \n \n \n (9,614) \n \n \n \n \n Adjusted operating profit \n \n \n 48,299 \n \n \n 59,593 \n \n \n \n \n Share of profit from associate \n \n \n 84 \n \n \n 24 \n \n \n \n \n Adjusted net finance costs \n \n \n (10,130) \n \n \n (9,614) \n \n \n \n \n Adjusted profit before tax \n \n \n 38,253 \n \n \n 50,003 \n \n \n \n \n Profit after tax \n \n \n 16,962 \n \n \n 28,926 \n \n \n \n \n Total adjusted profit before tax adjustments (above) \n \n \n 15,942 \n \n \n 13,456 \n \n \n \n \n Tax impact of adjustments \n \n \n (4,696) \n \n \n (3,930) \n \n \n \n \n Adjusted profit after tax \n \n \n 28,208 \n \n \n 38,452 \n \n \n \n \n Profit after tax \n \n \n 16,962 \n \n \n 28,926 \n \n \n \n \n Non-controlling interest \n \n \n (932) \n \n \n (2,109) \n \n \n \n \n Profit after tax attributable to owners of the Parent Company \n \n \n 16,030 \n \n \n 26,817 \n \n \n \n \n Adjusted profit after tax \n \n \n 28,208 \n \n \n 38,452 \n \n \n \n \n Non-controlling interest \n \n \n (932) \n \n \n (2,109) \n \n \n \n \n Adjustments to profit after tax due to NCI \n \n \n (470) \n \n \n (439) \n \n \n \n \n Adjusted profit after tax attributable to owners of the Parent Company \n \n \n 26,806 \n \n \n 35,904 \n \n \n \n \n Number of shares for EPS \n \n \n 102,164,466 \n \n \n 95,852,306 \n \n \n \n \n Reported EPS - pence \n \n \n 15.69 \n \n \n 27.98 \n \n \n \n \n Adjusted EPS - pence \n \n \n 26.24 \n \n \n 37.46 \n \n \n \n \n   \n The Directors present adjusted operating profit, adjusted profit before tax, and adjusted profit after tax as alternative performance measures in order to provide relevant information relating to the performance of the Group. Adjusted profits are a reflection of the underlying trading profit and are important measures used by Directors for assessing Group performance. The definitions of the alternative performance measures are set out on note 1 to the consolidated financial statements. \n   \n \n \n   \n Consolidated statement of comprehensive income for the year ended 31 December 2024 \n   \n   \n \n \n \n \n   \n \n \n Notes \n \n \n 2024 \n \n \n   \n \n \n 2023 \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n (Restated) 1 \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n 1,317,013 \n \n \n \n \n \n 1,295,079 \n \n \n \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n (1,082,683) \n \n \n \n \n \n \n \n (1,068,940) \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n 234,330 \n \n \n \n \n \n 226,139 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Selling and distribution costs \n \n \n \n \n \n (155,690) \n \n \n \n \n \n (140,543) \n \n \n \n \n \n \n \n Administrative expenses \n \n \n \n \n \n (63,007) \n \n \n \n \n \n (51,029) \n \n \n \n \n \n \n \n Other operating income \n \n \n \n \n \n 8,500 \n \n \n \n \n \n 7,016 \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n \n \n 24,133 \n \n \n \n \n \n \n \n 41,583 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Comprising \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit \n \n \n \n \n \n 48,299 \n \n \n \n \n \n 59,593 \n \n \n \n \n \n \n \n Acquisition costs \n \n \n 13 \n \n \n (1,124) \n \n \n \n \n \n (1,489) \n \n \n \n \n \n \n \n Exceptional items \n \n \n 3 \n \n \n (11,962) \n \n \n \n \n \n - \n \n \n \n \n \n \n \n Share based payments \n \n \n 11 \n \n \n 888 \n \n \n \n \n \n (4,738) \n \n \n \n \n \n \n \n Employer taxes on share based payments \n \n \n 11 \n \n \n 419 \n \n \n \n \n \n (603) \n \n \n \n \n \n \n \n Amortisation of brands, customer relationships, and supplier relationships \n \n \n \n \n \n (12,387) \n \n \n \n \n \n (11,180) \n \n \n \n \n \n \n \n \n \n \n \n \n \n 24,133 \n \n \n \n \n \n 41,583 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share of profit after tax from associate \n \n \n \n \n \n 84 \n \n \n \n \n \n 24 \n \n \n \n \n \n \n \n Other gains and losses \n \n \n 4 \n \n \n 8,621 \n \n \n \n \n \n 4,494 \n \n \n \n \n \n \n \n Finance income \n \n \n \n \n \n 812 \n \n \n \n \n \n 293 \n \n \n \n \n \n \n \n Finance costs \n \n \n 5 \n \n \n \n (11,339) \n \n \n \n \n \n \n \n (9,847) \n \n \n \n \n \n \n \n \n Profit before taxation \n \n \n \n \n \n 22,311 \n \n \n \n \n \n 36,547 \n \n \n \n \n \n \n \n Taxation \n \n \n \n \n \n \n (5,349) \n \n \n \n \n \n \n \n (7,621) \n \n \n \n \n \n \n \n \n Profit after taxation \n \n \n \n \n \n \n 16,962 \n \n \n \n \n \n \n \n 28,926 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the financial year attributable to: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n The Company's equity shareholders \n \n \n \n \n \n 16,030 \n \n \n \n \n \n 26,817 \n \n \n \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n 932 \n \n \n \n \n \n 2,109 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n 16,962 \n \n \n \n   \n \n \n \n 28,926 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic earnings per share \n \n \n 6 \n \n \n 15.69p \n \n \n \n \n \n 27.98p \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Diluted earnings per share \n \n \n 6 \n \n \n 15.18p \n \n \n \n \n \n 27.06p \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1   Comparative information has been restated as detailed in note 17 . \n \n \n   \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n 2024 \n \n \n   \n \n \n 2023 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the financial year \n \n \n \n \n \n \n \n \n \n \n \n 16,962 \n \n \n \n \n \n 28,926 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income \n Items that will not be reclassified subsequently to profit or loss: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Actuarial losses on retirement benefit obligations \n \n \n \n \n \n \n \n \n \n \n \n (286) \n \n \n \n \n \n (172) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Items that may be reclassified subsequently to profit or loss: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Foreign exchange losses on consolidation \n \n \n \n \n \n \n \n \n \n \n \n \n (5,483) \n \n \n \n \n \n \n \n (5,432) \n \n \n \n \n \n Other comprehensive income for the financial year, net of tax \n \n \n \n \n \n \n \n \n \n \n \n (5,769) \n \n \n \n \n \n (5,604) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n \n \n \n \n \n \n \n 11,193 \n \n \n \n \n \n \n \n 23,322 \n \n \n \n \n \n   \n Attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Owners of the Parent Company \n \n \n \n \n \n \n \n \n \n \n \n 10,696 \n \n \n \n \n \n 21,681 \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n 497 \n \n \n \n \n \n 1,641 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n 11,193 \n \n \n \n \n \n \n \n 23,322 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n Consolidated statement of financial position as at 31 December 2024 \n   \n \n \n \n \n   \n \n \n   \n \n \n Notes \n \n \n \n \n \n 2024 \n \n \n \n \n \n 2023 \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Restated) 1 \n \n \n \n \n Investments \n \n \n \n \n \n \n \n \n \n \n \n 393 \n \n \n \n \n \n 299 \n \n \n \n \n Goodwill \n \n \n \n \n \n \n \n \n \n \n \n 60,418 \n \n \n \n \n \n 51,216 \n \n \n \n \n Intangible assets \n \n \n \n \n \n \n \n \n \n \n \n 123,547 \n \n \n \n \n \n 117,009 \n \n \n \n \n Right of use assets \n \n \n \n \n \n \n \n \n \n \n \n 19,038 \n \n \n \n \n \n 21,051 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n 19,709 \n \n \n \n \n \n 16,640 \n \n \n \n \n Derivative financial instruments \n \n \n \n \n \n \n \n \n \n \n \n 1,608 \n \n \n \n \n \n 2,031 \n \n \n \n \n Deferred tax assets \n \n \n \n \n \n \n \n \n \n \n \n \n 151 \n \n \n \n \n \n \n \n 617 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 224,864 \n \n \n \n \n \n 208,863 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n \n \n \n \n \n \n \n \n \n 174,448 \n \n \n \n \n \n 165,588 \n \n \n \n \n Derivative financial instruments \n \n \n \n \n \n \n \n \n \n \n \n 572 \n \n \n \n \n \n 53 \n \n \n \n \n Current tax asset \n \n \n \n \n \n \n \n \n \n \n \n 4,057 \n \n \n \n \n \n - \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n \n \n \n \n \n \n 197,562 \n \n \n \n \n \n 209,140 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n \n \n \n \n 49,160 \n \n \n \n \n \n \n \n 56,135 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 425,799 \n \n \n \n \n \n 430,916 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n (213,567) \n \n \n \n \n \n (216,229) \n \n \n \n \n Derivative financial instruments \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n (26) \n \n \n \n \n Put option liabilities over non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n (11,682) \n \n \n \n \n \n (21,958) \n \n \n \n \n Deferred and contingent considerations \n \n \n \n \n \n \n \n \n \n \n \n (3,835) \n \n \n \n \n \n (11,694) \n \n \n \n \n Borrowings and financial liabilities \n \n \n \n \n \n 7 \n \n \n \n \n \n (45,048) \n \n \n \n \n \n (49,146) \n \n \n \n \n Current tax liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (1,339) \n \n \n \n \n \n \n \n (179) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (275,471) \n \n \n \n \n \n (299,232) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n Net current assets \n \n \n \n \n \n \n \n \n \n \n \n 150,328 \n \n \n \n \n \n 131,684 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n Total assets less current liabilities \n \n \n \n \n \n \n \n \n \n \n \n 375,192 \n \n \n \n \n \n 340,547 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n (2,645) \n \n \n \n \n \n (3,915) \n \n \n \n \n Put option liabilities over non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n (743) \n \n \n \n \n Deferred and contingent considerations \n \n \n \n \n \n \n \n \n \n \n \n (1,758) \n \n \n \n \n \n (3,685) \n \n \n \n \n Borrowings and financial liabilities \n \n \n \n \n \n 7 \n \n \n \n \n \n (157,541) \n \n \n \n \n \n (113,180) \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n \n \n \n \n \n \n (20,574) \n \n \n \n \n \n (18,920) \n \n \n \n \n Retirement benefit obligation \n \n \n \n \n \n \n \n \n \n \n \n (2,005) \n \n \n \n \n \n (1,562) \n \n \n \n \n Provisions \n \n \n \n \n \n \n \n \n \n \n \n \n (1,515) \n \n \n \n \n \n \n \n (2,398) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (186,038) \n \n \n \n \n \n (144,403) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n \n \n \n \n 189,154 \n \n \n \n \n \n \n \n 196,144 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n \n \n \n 9 \n \n \n \n \n \n 1,042 \n \n \n \n \n \n 1,033 \n \n \n \n \n Share premium \n \n \n \n \n \n \n \n \n \n \n \n 116,959 \n \n \n \n \n \n 116,959 \n \n \n \n \n Share based payment reserve \n \n \n \n \n \n \n \n \n \n \n \n 5,489 \n \n \n \n \n \n 10,843 \n \n \n \n \n Investment in own shares \n \n \n \n \n \n \n \n \n \n \n \n (616) \n \n \n \n \n \n (616) \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n \n \n \n \n \n 69,739 \n \n \n \n \n \n 63,093 \n \n \n \n \n Translation reserve \n \n \n \n \n \n \n \n \n \n \n \n (4,656) \n \n \n \n \n \n 392 \n \n \n \n \n Put option reserve \n \n \n \n \n \n \n \n \n \n \n \n (6,933) \n \n \n \n \n \n (18,649) \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n \n \n \n \n \n \n 50 \n \n \n \n \n \n 50 \n \n \n \n \n Other reserve \n \n \n \n \n \n \n \n \n \n \n \n \n 150 \n \n \n \n \n \n \n \n 150 \n \n \n \n \n \n Equity attributable to owners of the Parent Company \n \n \n \n \n \n \n \n \n \n \n \n 181,224 \n \n \n \n \n \n 173,255 \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n \n \n \n \n \n \n \n 7,930 \n \n \n \n \n \n \n \n 22,889 \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n \n \n \n \n 189,154 \n \n \n \n \n \n \n \n 196,144 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The financial statements were approved by the Board of Directors and authorised for issue on 17 March 2025 and were signed on its behalf by: \n   \n   \n   \n Mr S B Fenby \n Director                                                                                                                                               Company registration number: 08793266 \n   \n 1   Comparative information has been restated as detailed in note 17 . \n   \n Consolidated statement of changes in equity for the year ended 31 December 2024 \n \n \n \n \n   \n \n \n Share \ncapital \n \n \n Share premium \n \n \n Investment in own shares \n \n \n Retained \nearnings \n \n \n   \n Other reserves \n \n \n Equity attributable to owners of the Parent \n \n \n Non-controlling interests \n \n \n Total \n \n \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n (note 9 ) \n \n \n \n \n \n (note 9 ) \n \n \n \n \n \n (note 10 ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 1 January 2024 \n \n \n 1,033 \n \n \n 116,959 \n \n \n (616) \n \n \n 63,093 \n \n \n (7,214) \n \n \n 173,255 \n \n \n 22,889 \n \n \n 196,144 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n 16,030 \n \n \n - \n \n \n 16,030 \n \n \n 932 \n \n \n 16,962 \n \n \n \n \n Other comprehensive income \n \n \n - \n \n \n - \n \n \n - \n \n \n (286) \n \n \n (5,048) \n \n \n (5,334) \n \n \n (435) \n \n \n (5,769) \n \n \n \n \n Total comprehensive income for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n 15,744 \n \n \n (5,048) \n \n \n 10,696 \n \n \n 497 \n \n \n 11,193 \n \n \n \n \n Shares issued (note 9 ) \n \n \n 9 \n \n \n - \n \n \n (9) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (957) \n \n \n (957) \n \n \n - \n \n \n (957) \n \n \n \n \n Deferred tax on share based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (115) \n \n \n (115) \n \n \n - \n \n \n (115) \n \n \n \n \n Share options exercised \n \n \n - \n \n \n - \n \n \n 9 \n \n \n 4,280 \n \n \n (4,282) \n \n \n 7 \n \n \n - \n \n \n 7 \n \n \n \n \n Acquisition of non-controlling interest (note 12 ) \n \n \n - \n \n \n - \n \n \n - \n \n \n 3,740 \n \n \n 11,716 \n \n \n 15,456 \n \n \n (15,456) \n \n \n - \n \n \n \n \n Dividends paid (note 14 ) \n \n \n - \n \n \n - \n \n \n - \n \n \n (17,118) \n \n \n - \n \n \n (17,118) \n \n \n - \n \n \n (17,118) \n \n \n \n \n Transactions with owners \n \n \n 9 \n \n \n - \n \n \n - \n \n \n (9,098) \n \n \n 6,362 \n \n \n (2,727) \n \n \n (15,456) \n \n \n (18,183) \n \n \n \n \n Balance at 31 December 2024 \n \n \n 1,042 \n \n \n 116,959 \n \n \n (616) \n \n \n 69,739 \n \n \n (5,900) \n \n \n 181,224 \n \n \n 7,930 \n \n \n 189,154 \n \n \n \n \n   \n For the year ended 31 December 2023 \n \n \n \n \n   \n \n \n Share \ncapital \n \n \n Share premium \n \n \n Investment in own shares \n \n \n Retained \nearnings \n \n \n   \n Other reserves \n \n \n Equity attributable to owners of the Parent \n \n \n Non-controlling interests \n \n \n Total \n \n \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n (note 9 ) \n \n \n \n \n \n (note 9 ) \n \n \n \n \n \n (note 10 ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 1 January 2023 \n \n \n 889 \n \n \n 67,047 \n \n \n (5) \n \n \n 46,023 \n \n \n 6,782 \n \n \n 120,736 \n \n \n 13,398 \n \n \n 134,134 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n 26,817 \n \n \n - \n \n \n 26,817 \n \n \n 2,109 \n \n \n 28,926 \n \n \n \n \n Other comprehensive income \n \n \n - \n \n \n - \n \n \n - \n \n \n (172) \n \n \n (4,964) \n \n \n (5,136) \n \n \n (468) \n \n \n (5,604) \n \n \n \n \n Total comprehensive income for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n 26,645 \n \n \n (4,964) \n \n \n 21,681 \n \n \n 1,641 \n \n \n 23,322 \n \n \n \n \n Shares issued (note 9 ) \n \n \n 144 \n \n \n 49,912 \n \n \n (23) \n \n \n - \n \n \n - \n \n \n 50,033 \n \n \n - \n \n \n 50,033 \n \n \n \n \n Shares purchases (note 9 ) \n \n \n - \n \n \n - \n \n \n (600) \n \n \n - \n \n \n - \n \n \n (600) \n \n \n - \n \n \n (600) \n \n \n \n \n Share based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 4,661 \n \n \n 4,661 \n \n \n - \n \n \n 4,661 \n \n \n \n \n Deferred tax on share based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (434) \n \n \n (434) \n \n \n - \n \n \n (434) \n \n \n \n \n Share options exercised \n \n \n - \n \n \n - \n \n \n 12 \n \n \n 5,407 \n \n \n (5,409) \n \n \n 10 \n \n \n - \n \n \n 10 \n \n \n \n \n Acquisition of subsidiaries (note 13 ) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (7,850) \n \n \n (7,850) \n \n \n 7,850 \n \n \n - \n \n \n \n \n Dividends paid (note 14 ) \n \n \n - \n \n \n - \n \n \n - \n \n \n (14,982) \n \n \n - \n \n \n (14,982) \n \n \n - \n \n \n (14,982) \n \n \n \n \n Transactions with owners \n \n \n 144 \n \n \n 49,912 \n \n \n (611) \n \n \n (9,575) \n \n \n (9,032) \n \n \n 30,838 \n \n \n 7,850 \n \n \n 38,688 \n \n \n \n \n Balance at 31 December 2023 \n \n \n 1,033 \n \n \n 116,959 \n \n \n (616) \n \n \n 63,093 \n \n \n (7,214) \n \n \n 173,255 \n \n \n 22,889 \n \n \n 196,144 \n \n \n \n \n   \n Consolidated statement of cash flows for the year ended 31 December 2024 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n Notes \n \n \n   \n \n \n 2024 \n \n \n   \n \n \n 2023 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 22,311 \n \n \n \n \n \n 36,547 \n \n \n \n \n Depreciation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 10,568 \n \n \n \n \n \n 9,286 \n \n \n \n \n Amortisation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 12,675 \n \n \n \n \n \n 11,818 \n \n \n \n \n Loss on disposal of assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 4,637 \n \n \n \n \n \n 763 \n \n \n \n \n Share based payments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (957) \n \n \n \n \n \n 4,661 \n \n \n \n \n Foreign exchange gains \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,108) \n \n \n \n \n \n (2,467) \n \n \n \n \n Gain on remeasurement of previously held equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,205) \n \n \n \n \n \n - \n \n \n \n \n Share of profit after tax from associate \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (84) \n \n \n \n \n \n (24) \n \n \n \n \n Finance income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (812) \n \n \n \n \n \n (293) \n \n \n \n \n Finance costs and other gains and losses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 3,923 \n \n \n \n \n \n \n \n 5,353 \n \n \n \n \n \n Profit from operations before changes in working capital \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 47,948 \n \n \n \n \n \n 65,644 \n \n \n \n \n (Increase)/decrease in inventories \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (8,112) \n \n \n \n \n \n 10,524 \n \n \n \n \n Decrease in trade and other receivables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 13,778 \n \n \n \n \n \n 9,637 \n \n \n \n \n Decrease in trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (7,566) \n \n \n \n \n \n \n \n (9,429) \n \n \n \n \n \n Cash inflow from operations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 46,048 \n \n \n \n \n \n 76,376 \n \n \n \n \n Income tax paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (10,764) \n \n \n \n \n \n \n \n (12,586) \n \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 35,284 \n \n \n \n \n \n 63,790 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Acquisition of subsidiaries net of cash acquired \n \n \n \n \n \n \n \n \n 13 \n \n \n \n \n \n (12,937) \n \n \n \n \n \n (42,359) \n \n \n \n \n Deferred and contingent consideration paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (12,993) \n \n \n \n \n \n (9,300) \n \n \n \n \n Investment in associate and other entities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (393) \n \n \n \n \n \n (275) \n \n \n \n \n Purchase of intangible assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (9,487) \n \n \n \n \n \n (10,364) \n \n \n \n \n Purchase of plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (5,414) \n \n \n \n \n \n (5,605) \n \n \n \n \n Proceeds on disposal of plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 401 \n \n \n \n \n \n 198 \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 812 \n \n \n \n \n \n \n \n 293 \n \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (40,011) \n \n \n \n \n \n (67,412) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Proceeds on issue of shares \n \n \n \n \n \n \n \n \n 9 \n \n \n \n \n \n - \n \n \n \n \n \n 51,250 \n \n \n \n \n Costs associated with shares issued \n \n \n \n \n \n \n \n \n 9 \n \n \n \n \n \n - \n \n \n \n \n \n (1,217) \n \n \n \n \n Purchase of own shares \n \n \n \n \n \n \n \n \n 9 \n \n \n \n \n \n - \n \n \n \n \n \n (600) \n \n \n \n \n Proceeds on exercise of share options \n \n \n \n \n \n \n \n \n 11 \n \n \n \n \n \n 7 \n \n \n \n \n \n 10 \n \n \n \n \n Acquisition of non-controlling interest \n \n \n \n \n \n \n \n \n 12 \n \n \n \n \n \n (11,853) \n \n \n \n \n \n (61) \n \n \n \n \n Dividends paid \n \n \n \n \n \n \n \n \n 14 \n \n \n \n \n \n (17,118) \n \n \n \n \n \n (14,982) \n \n \n \n \n Invoice financing outflows \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,671) \n \n \n \n \n \n (3,009) \n \n \n \n \n Proceeds from borrowings \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 49,333 \n \n \n \n \n \n 39,228 \n \n \n \n \n Repayment of loans \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (884) \n \n \n \n \n \n (19,690) \n \n \n \n \n Interest paid \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (10,712) \n \n \n \n \n \n (9,360) \n \n \n \n \n Interest on leases \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (779) \n \n \n \n \n \n (651) \n \n \n \n \n Capital element of lease payments \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,628) \n \n \n \n \n \n \n \n (5,235) \n \n \n \n \n \n Net cash (outflow)/inflow from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,305) \n \n \n \n \n \n 35,683 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net (decrease)/increase in cash and cash equivalents \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (6,032) \n \n \n \n \n \n 32,061 \n \n \n \n \n Cash and cash equivalents at beginning of financial year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 52,053 \n \n \n \n \n \n 20,938 \n \n \n \n \n Effects of exchange rate changes \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (618) \n \n \n \n \n \n \n \n (946) \n \n \n \n \n \n Cash and cash equivalents at end of financial year \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 45,403 \n \n \n \n \n \n \n \n 52,053 \n \n \n \n \n \n Comprising: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash at bank \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 49,160 \n \n \n \n \n \n 56,135 \n \n \n \n \n Bank overdrafts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (3,757) \n \n \n \n \n \n \n \n (4,082) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 45,403 \n \n \n \n \n \n \n \n 52,053 \n \n \n \n \n \n   \n Notes to the consolidated financial statements \n   \n 1.      Accounting policies \n   \n General information and nature of operations \n Midwich Group plc (\"the Company\") is a public limited company incorporated in England and Wales and listed on the London Stock Exchange's Alternative Investment Market (AIM). The principal activity of Midwich Group plc and its subsidiary companies (\"the Group\") is the distribution of Audio Visual Solutions to trade customers. \n Basis of preparation \n The consolidated financial statements of Midwich Group plc have been prepared in accordance with UK adopted International Accounting Standards (\"IAS\") and in conformity with the requirements of the Companies Act 2006. \n The financial statements have been prepared under the historical cost convention as modified for financial instruments at fair value and in accordance with applicable accounting standards. \n The directors have adopted the going concern basis in preparing the financial information. In assessing whether the going concern assumption is appropriate, the directors have taken into account all relevant available information about the foreseeable future.  \n Going concern \n In considering the going concern basis for preparing the financial statements, the Board considers the Group's objectives and strategy, its principal risks and uncertainties in achieving its goals and objectives which are set out in the Strategic Report. The Board has undertaken a review of going concern under three scenarios: 1) our base plan, 2) a downside scenario and 3) a reverse stress test for the period to 31 December 2026. The sensitivity and reverse stress tests are based on a model that allows the Group to assess its liquidity, solvency and compliance with banking covenants based on inputs for future trading performance. Varying the inputs into the model allows the Group to assess the impact of potential adverse trading conditions. The sensitivity analysis is based on revenue being broadly flat on 2024. The RST model is based on a decrease in revenue of revenue of approx. £150m in comparison to 2024. Both scenarios also include the impact of changes in gross profit margin and other mitigations in respect of overheads and capital expenditure. The level of revenue deterioration is not considered plausible based on current trading performance and expected market growth. \n The directors consider the working capital and finance facilities of the business to be adequate to fund its operations and growth strategy. The Group has a variety of finance facilities available to it including a revolving credit facility (\"RCF\") which expires in 2028 and secured invoice discounting facilities which require renewal in the forecast period. \n The Group is subject to covenant testing on a biannual basis at its half year and full year reporting dates under the RCF agreement. The two RCF covenants are Group Leverage and Interest Cover and are specifically defined in the RCF agreement. The definition of the Group Leverage covenant is the adjusted net debt to adjusted EBITDA ratio included in the alternative performance measures. The definition of the Interest Cover covenant is the adjusted EBITDA to adjusted net finance costs ratio included in the alternative performance measures. The adjusted net debt in the Group Leverage covenant can be no higher than 3 times the adjusted EBITDA. The adjusted EBITDA in the Interest Cover covenant must be at least 4 times adjusted net finance costs. Under the base case scenario, neither of the Group Leverage or Interest Cover covenants are breached in 2025 or 2026. \n The directors are confident that they will be able to renew the secured invoice discounting facilities given the secured nature of the facility and state of the business. Notwithstanding, this represents an uncertainty and further models (base plan and reverse stress test) have been prepared to assess going concern without the use of on demand facilities. The base case continues to demonstrate the Group's ability to continue as a going concern. The reverse stress test demonstrates that the Group can withstand severe adverse trading conditions and would breach covenants in 2026, which would provide sufficient time to implement the necessary actions to avoid this. In assessing the ability to withstand severe adverse trading conditions, the directors have also considered mitigating actions available to them. \n There are no material uncertainties that cast significant doubt on the Group's ability to continue as a going concern and the Group continues to adopt the going concern basis in preparing consolidated financial statements. The Group's strategy remains unchanged, and we will continue to focus on profitable organic growth complemented by targeted acquisitions. \n Revenue \n Revenue arises from the sale of goods, provision of ancillary services, and the rental of products. \n Revenue from the sale of goods is recognised on despatch when control of the products is transferred to the customer. All performance obligations are met when the customer obtains control to direct the goods within the sales channel and incurs the risk of obsolescence. This includes revenue recognised for bill and hold arrangements where the goods are despatched to a warehouse and held on behalf of the customer. \n Ancillary services include support services, transport, installations, removals, warranties, and repairs. Where contracts for ancillary services include multiple performance obligations the transaction price is allocated to each separate performance obligation within the contact based on estimated cost-plus margin. Revenues from support services, transport, and warranties are recognised over time as the services are performed. Revenues from all other ancillary services including installations, removals, and repairs are recognised at a point in time upon delivery of the service. \n Revenue from the rental of products via an operating lease is recognised on a straight-line basis over the lease term. Proceeds from the sale of rental assets are recognised as sales of goods. Revenue for the sale of rental assets is recognised at the point in time when the control is transferred, at which point the customer obtains the ability to direct the goods in the channel and incurs the risk of obsolescence. \n The Group recognises revenue as a principal or agent depending on whether it controls the goods provided to the customer. The Group recognises revenue on a gross principal basis when it controls the goods. The Group recognises revenue on a net agent basis by offsetting the cost of goods it does not control within revenue. The Group assesses whether it controls the goods based on when it has the responsibility for the performance obligations of the goods, inventory risk, and discretion over pricing of the goods. Direct shipment sales are recognised on a principal basis as the Group has the responsibility for the performance obligations for the goods, discretion over pricing, and limited inventory risks while the goods are in transit. Sales of licences and software are recognised on a principal basis when the sale is related to the sales of hardware or acquired in advance for a customer under arrangements where the Group bears the responsibility for the acceptability of the software and whether it meets the customer's needs. Sales of licences and software are recognised on an agent basis when acquired as needed by the customer or under arrangements where the Group does not bear the responsibility for the acceptability of the software and whether it meets the customer's needs. \n Exceptional items \n Exceptional items are amounts that are disclosed separately to provide transparency and comparability to enable a better understanding of the Group's financial performance. Exceptional items include restructuring costs, loss on disposal of development costs, and a loss of inventory due to a fire. Further details of exceptional items are disclosed in note 3 . \n Other gains and losses \n Other gains and losses include gains and losses on the Group's derivative financial instruments, borrowings for acquisitions, deferred and contingent considerations, put option liabilities, and equity interests. Gains and losses on the Group's derivative financial instruments arise from changes in the fair value of the instruments. Gains and losses on the Group's borrowings for acquisitions occur due to movements in foreign exchange rates. Gains and losses on the Group's deferred and contingent considerations include amortised interest, foreign exchange gains and losses, and changes in fair value of the instruments. Gains and losses on the Group's put option liabilities include amortised interest, foreign exchange gains and losses, and subsequent remeasurements to present value of the instruments. Gains and losses on equity interests arise on remeasurement of previously held equity interests when a controlling interest is acquired. \n Goodwill \n Goodwill represents the future economic benefits arising from business combinations which are not individually identified and separately recognised. Goodwill is carried at cost as established at the date of acquisition of the business less any accumulated impairment losses. \n Intangible assets other than goodwill \n Intangible assets acquired separately are measured at cost on initial recognition. The cost of intangible assets acquired in a business combination are initially measured at their fair value as at the date of acquisition. Intangible assets arising from development are recognised only when: \n ·    the development is proven to be technically feasible, \n ·    the Group will have the ability to use the asset, \n ·    it is probable that the asset will generate future economic benefits, \n ·    the Group has adequate resources to complete the development, \n ·    the Group intends to complete development, and \n ·    the Group can reliably measure expenditure on the attributable to the development. \n The costs of research and development activities that do not meet the recognition criteria for an intangible asset arising from development are recognised in the income statement. Development activities that have advanced sufficiently and meet all the recognition criteria are capitalised as intangible assets arising from development and are initially measured at the directly attributable costs incurred that are necessary to develop the asset to be capable of operating in the manner intended by management. Directly attributable costs include borrowing costs. \n Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Intangible assets arising from development begin being depreciated when the asset is available for use as intended by management. Subsequent expenditure on intangible assets arising from development is only recognised when it meets the initial recognition criteria, is directly attributable to the initial asset recognised, and increases future economic benefits that can be obtained from the asset. \n The useful lives of all intangible assets other than goodwill are assessed as finite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in administrative expenses. Intangible assets arising from development that have not started to depreciate because they are not available for use as intended by management are tested for impairment annually. \n Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised. \n Amortisation is calculated using a units of production or straight-line method to recognise the cost in a pattern that reflects the consumption of economic benefits over the estimated useful life of the assets as follows: \n \n \n \n \n ·  Patents and licences \n \n \n 3-10 years \n \n \n \n \n ·  Software \n \n \n 3-15 years \n \n \n \n \n ·  Brands \n \n \n 3-15 years \n \n \n \n \n ·  Customer relationships \n \n \n 5-15 years \n \n \n \n \n ·   Supplier relationships \n \n \n 5-15 years \n \n \n \n \n Impairment of non-financial assets including goodwill \n For the purposes of impairment testing, goodwill is allocated to each of the Group's cash generating units that are expected to benefit from the synergies of the combination. Each unit to which goodwill is allocated represents the lowest level within the Group that independent cash flows are monitored. A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. \n At each reporting date the Group reviews the carrying amounts of non-current assets excluding goodwill to determine whether there is any indication that they have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of any impairment loss. Where the asset does not generate cash flows that are independent from other assets, the estimate is the recoverable amount of the cash generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or cash generating unit is estimated to be less than the carrying amount, then the carrying amount of the asset or cash generating unit is reduced to the recoverable amount. The impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. An impairment loss is recognised as an expense immediately. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where an impairment loss on other non-financial assets subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit in prior periods. A reversal of an impairment loss is recognised in the income statement immediately. \n Inventory \n Inventory is valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving items. The cost of inventory comprises the purchase price including directly attributable supplier rebates and directly attributable costs incurred in bringing products to their present location and condition. Some goods are held on behalf of customers and are not included within the Group's inventory.  \n Financial liabilities \n Financial liabilities include trade and other payables; deferred considerations; put option liabilities; borrowings; and derivative financial instruments with a negative market value. \n The Group classifies financial liabilities into three categories: \n \n \n \n \n ·  financial liabilities measured at amortised cost; \n \n \n \n \n ·  financial liabilities measured at fair value through profit or loss; and \n \n \n \n \n ·   contingent consideration recognised in a business combination. \n \n \n \n \n Financial liabilities measured at amortised cost are initially measured at fair value minus directly attributable transaction costs and subsequently measured using the effective interest method. The effects of discounting within the effective interest method are omitted if immaterial. Where the contractual cash flows of the financial liability are renegotiated or otherwise modified the financial liability is recalculated at the present value of the modified contractual cash flows discounted at the financial liability's original effective interest rate. \n Financial liabilities measured at fair value through profit or loss are initially and subsequently measured at fair value. Transaction costs directly attributable to the issue of the financial liability are recognised in the profit and loss. \n Contingent consideration recognised in a business combination is initially and subsequently measured at fair value. \n Financial liabilities are derecognised when they are extinguished, discharged, cancelled, or expire. \n Cash flows in respect of deferred considerations, including contingent considerations, are reported as an investing cash flows because they are cash flows that arise from obtaining control of subsidiaries. Movements in the fair value of contingent consideration are classified as charges or credits to finance costs in the income statement. \n Put option liabilities \n Put options to acquire non-controlling interests of subsidiaries are initially recognised at present value and subsequently measured at amortised cost, being the present value of future payments discounted at the original effective interest rate. Where the contractual cash flows of the put option liability are renegotiated or otherwise modified the financial liability is recalculated at the present value of the modified contractual cash flows discounted at the financial liability's original effective interest rate. Further details of the measurement of put options are given in the accounting judgements and key sources of estimation uncertainty accounting policy. \n New and amended International Accounting Standards adopted by the Group \n The Group adopted the following standards, amendments to standards and interpretations, which are effective for the first time this year: \n Amendments to IAS 1 Presentation of financial statements - clarification on the presentation of current and non current liabilities, \n Amendments to IFRS 16 Leases - clarification in respect of the subsequent measurement of sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale, \n Amendments to IAS 1 Presentation of financial statements - clarification over the classification of non current borrowings with covenants, and \n Amendments to IAS 7 Statement of cash flows and IFRS 7 Financial instruments: disclosures - additional disclosure requirements in respect of supplier finance arrangements. \n   \n The new standards have not had a material impact on the reported net financial performance or net financial position of the Group. \n International Accounting Standards in issue but not yet effective \n The Group intends to adopt new and amended standards and interpretations, if applicable, when they become effective. The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are not expected to have an impact on the Group's reported financial position or performance. \n Use of alternative performance measures \n The Group has defined certain measures used within the business for assessing and managing performance. These measures are not defined under IAS and they may not be directly comparable with other companies' adjusted measures. The Group discloses the adjustments to IAS measures to provide transparency over the costs that are excluded from the alternative performance measures. The alternative performance measures provide a materially different presentation of the Group's performance compared to IAS measures. The alternative performance measures are not a substitute for IAS measures and are presented with the adjustments to IAS measures to provide supplementary information for assessing performance in accordance with IAS measures. \n \n \n \n \n ·   \n \n \n Constant currency: This adjusted measure appli...

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