Softcat report annual revenue rise of 35%

Softcat plc have reported a year on year revenue rise of 35% and the sppointment of a new non-executive Director . The financial results extend the company’s unbroken run in growth to nine years.

The IT firm who have hubs in Buckinghamshire and Southampton announced their figures in a half yearly report to the LSE Tuesday. The computer infrastructure product and services provider informed shareholders revenues rose from £577m in Jan 21 to £770.9m in Jan’ 22. This equates to an 11% rise in profits.

The profit margin growth was attributed to a higher spend per customer and a widening customer base. Average gross profit per Softcat customer was; “up 12.4% to £30 200.”

The results reflect revenue growth ahead of company expectations and an interim dividend of 7.3p per share, up 14.1%. This will be paid on May 13.

Softcat also reported strong cash generation and growth across all key income and profit measures. While they stated that the labour market was challenging the company workforce has increased by 20% during the pandemic.

Management reiterated that these results were recorded whilst maintaining a high level of investment in future growth.

The financial report to the LSE read that these results had: “been achieved against the backdrop of ongoing supply chain challenges which remain manageable but are contributing to a relatively modest backlog of hardware orders.”

This backlog is expected to be cleared over the course of this financial year.

Graeme Watt, Softcat CEO, said of the financial half year results: “The Company continued to perform well across all areas of the business in the first half.

Transaction numbers grew strongly as we saw more customers emerge from the impacts of the pandemic, and this drove a 12.4% expansion in gross profit per customer.

“Notwithstanding the very high bar we set during last year's exceptional first half performance, these results preserve a run that now extends to sixty-six consecutive quarters of year-on-year growth in gross invoiced income and profit.

“Our key external challenges continued to be the impact of the pandemic as well as supply chain constraints.”

Mr Watt concluded: “Because of the outperformance in the first half the Board now believes that the outturn for the full year will be ahead of previous estimates.”

It would therefore seem a good time to join the company as an independent non-executive Director of the Company.

Appointee Lynne Weedall, who takes up the position from May 3 brings significant experience to the Board of Softcat. Ms. Weedall served senior executive positions in Group People and Culture Director of Selfridges Group, and Group Human Resources and Strategy Director of Carphone Warehouse.

Commenting on the appointment, Martin Hellawell, non-executive Chairman of Softcat said:

"The Board has previously discussed the potential benefits of adding a further non-executive Director, if that person would add further significant value to the Board's effectiveness, skillset and expertise and would be a good fit. Lynne certainly meets all these requirements as well as rebalancing the workload of some of our other non-executive Directors.  I am delighted that she has agreed to join our Board.

"Her insights from her executive career together with the significant experience gained on the boards of listed companies will further strengthen our Board. All of us at Softcat look forward to working with her and taking advantage of her insights as we push ahead with our proven strategy for growth.

"I would like to thank Karen Slatford for chairing the Remuneration Committee so professionally and effectively since her appointment in 2019 and look forward to continuing to work closely with her in her Board roles at Softcat."