Midwich has provided an update in light of the constantly evolving COVID-19 situation
The statement reads as follows:
Throughout this crisis we have prioritised protecting the health and wellbeing of our team, utilising particularly our remote working capabilities.
The situation in respect of COVID-19 continues to evolve rapidly across the countries in which the group operates. The extent to which our business is currently affected varies by country, but we have taken actions across the group to preserve cash and liquidity. Measures undertaken include the temporary suspension of acquisition activities and capital expenditure together with tighter controls on working capital and overheads. To further preserve cash, the board has taken the decision to withdraw its intention to propose a final dividend for 2019.
Balance sheet and liquidity
In January 2020, the group signed a new three year £50m revolving credit facility which has unutilised capacity of £37.8m. This facility also includes a £30m accordion option and can be extended by a further two years, both at the bank’s discretion. In February 2020, the Group successfully completed an equity fundraising of £39.7m, of which £21m was used in connection with the acquisition of Starin Marketing, Inc. The Group also has numerous working capital facilities (totalling over £100m) which provide further funding flexibility to our businesses. At 31 December 2019, the group had closing adjusted net debt/adjusted EBITDA of 1.4x. The board believes that this balance sheet strength, together with a strong and supportive relationship with our banking partners, means that the group is well placed to deal with current uncertainties.
The board notes that, although our end-user markets have been adversely affected by the COVID-19 situation to varying degrees, the group continues to supply solutions into critical end-user markets and also to facilitate remote working and communication. In particular, working with its customers, the group has recently supplied solutions to support the UK and Italian governments in their battle with COVID-19.
While it is too early to accurately determine the evolving impact of COVID-19 on the group’s performance in the current financial year, the Board believes that the audio-visual industry is one of long term structural growth and that we are well-positioned for when markets begin to return to normal.
Annual General Meeting (AGM)
The company is not authorised under its articles to hold a virtual or hybrid AGM, so the AGM will take place on 11 May 2020 and, subject to changes in government guidance, it will be held at Midwich’s office in Diss Norfolk. The board will be encouraging shareholders to submit their proxies as early as possible. In the exceptional current circumstances, the board considers the health of the company’s shareholders and its employees to be of paramount importance and asks shareholders not to attend the meeting in person. Final details of the AGM will be confirmed when the 2019 annual report is published and distributed in the coming weeks.