Midwich Group PLC said it continues to expect sales growth in the second half of the year as profit fell amid a challenging market and increasing costs, despite revenue growth.

The Norfolk, England-based company, which distributes specialist audiovisual technology to the trade market said pretax profit dived 35% to £10.1 million in the first half of 2024 from £15.6 million a year prior.

Midwich cited ‘a backdrop of continued challenging market conditions in several key markets.’

Revenue climbed 5.8% to £646.1 million from £610.4 million.

Cost of sales increased 4.6% to £534.4 million from £510.9 million. Distribution costs came in 22% higher at £74.4 million compared to £61.1 million. Administrative expenses increased 20% to £28.0 million from £23.4 million.

Midwich declared an unchanged interim dividend of 5.5 pence per share.

Looking ahead, the company noted a positive start to the second financial half as it returned to growth in July. It continues to expect organic sales growth in the second half.

Managing Director Stephen Fenby said: ‘Whilst it is prudent to assume macroeconomic conditions in certain markets, such as the UK & Ireland, will likely remain challenging for the remainder of 2024, we have seen some signs of the market stabilising in recent weeks, with market survey data indicating a recovery in pricing in the second half of the year. Trading since the start of July has been in line with the board’s expectations and slightly ahead of 2023.’

Midwich shares were up 0.4% at 325.22 pence each on late Tuesday morning in London.

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