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Softcat shares details of ‘satisfactory’ Q3 trading

Channel player’s trading update reveals that the first few weeks of lockdown have not had too much impact on the numbers

Signs coming out of the largest listed channel players suggest that although it remains difficult to predict how things will go in the future, trading through the coronavirus has remained steady so far.

Ten days ago, Computacenter updated the market with a trading statement that covered the period to the end of April. It used the word “robust” to describe its trading and indicated to investors that the first half of 2020 would be considerably ahead of the same period last year.

Softcat has now added another perspective on how trading has been in recent weeks, issuing its own third-quarter trading update, which covers the three months to 30 April.

That period covers a large chunk of the lockdown, and some of the weeks after a significant number of customers had made hardware, software and security investments to facilitate the move to a home working environment.

“The company has traded satisfactorily during the period and delivered growth in revenue, gross profit and operating profit. Cash receipts from customers have remained broadly in line with normal trends,” stated the trading update.

For those industry watchers keeping a keen eye on how the Covid-19 pandemic is affecting the channel, that assessment of recent weeks’ trading will provide some reassurance that business has continued.

The future is harder to predict, although the announcement yesterday that more lockdown easing measures would be implemented in the next couple of weeks, with more retailers getting the green light to re-open stores, will have helped.

“There remains a high degree of uncertainty in the coming months, and Softcat is not immune to the challenges faced by the wider economy,” the firm stated. “However, we have moved seamlessly to a remote working model and the board is encouraged by the resilience of the business thus far.”

Softcat has been a consistent performer ever since it went public in November 2015. In its most recent results, the firm delivered a solid set of numbers and indicated that the business had not seen a material impact from the coronavirus in its fiscal first half.

The reseller delivered 20.8% growth in revenues to £524.1m for the six months to 31 January. Operating profit climbed by 19.5%, hitting £40.5m.

During the first half of its financial year, Softcat cut the ribbon on a new office in Birmingham, which already has a staff of 20, and increased the overall headcount by just shy of 13%.

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