Softcat beats analyst expectations as profit jumps
UK tech infrastructure firm Softcat beat analyst expectations last year as profit growth accelerated into the double digits over the last six months of the year.
Gross profit at the firm increased by 12.1 per cent to £220.2m, above analyst expectations of £218.3m, Softcat revealed in its half-year report.
Meanwhile, operating profit climbed 10.4 per cent to £73.7m, above analyst expectations of £72.3m.
Management had also been expected to reaffirm its guidance of high single-digit operating profit growth, but instead upped forecasts to low double-digit growth.
Growth over the last six months was broad-based but especially strong in security, networking and data centre infrastructure, the firm said.
“We have continued to successfully implement our strategy, resulting in a first half performance slightly above our initial expectations and an upgrade to full year guidance, despite the persistent backdrop of generally more challenging trading conditions,” said Softcat CEO Graham Charlton.
Headcount increased by six per cent at the firm over the last year to 2,617, and Charlton said he expected a further increase of between six and eight per cent over the full year.
Meanwhile, the group managed to make progress against two strategic goals: Winning new customers, up 1.4 per cent from last year, and selling more to existing customers, with gross profit per customer jumping 10.7 per cent.
Peel Hunt rates Softcat’s stock a Buy, with a target price of 1,722p. Shares in the company are currently trading at 1,615p, having risen by 5.9 per cent since the start of the year.
“We are excited by the rapid pace of innovation across our industry, with more organisations embedding AI and automation into their systems and processes,” added Charlton.
“Our existing capabilities and continued investment mean we are well positioned to support the evolving technological needs of our customers, enabling us to sustainably grow market share.”