Softcat on course for strong FY20

Channel player continues to deliver growth as it issues a trading update to cover its last fiscal quarter

Softcat has continued to demonstrate the wisdom of those investors that chose to back the firm when it went public in 2015 with another upbeat trading update.

The channel player has consistently delivered growth and has indicated that it is on track to do so in its latest financial year, despite the impact of the coronavirus.

The firm last updated the market in May, and has seen trading continue to remain “satisfactory” in the last three months of its fiscal year, with operating profit for the full year slightly ahead of the board’s expectations.

“Our performance during the year is a great credit to the team at Softcat, and on behalf of the board I would like to thank them for their exceptional agility. The support they have shown to each other, our customers and our partners continues to be a key feature of our business,” said Softcat CEO Graeme Watt.

“Their commitment, alongside the breadth of our technology offering and customer base, provided a strong foundation for our performance in the second half. We are pleased to have been able to maintain staff levels without any actions to furlough staff in this period,” he added.

As a result, the firm is reverting back to its dividend policy if the market remains solid, and will be rewarding investors later this year.

But the firm warned that it was difficult to predict what could happen between now and the publication of its full-year results in October.

The trading update from Softcat will add more evidence to the view that the channel has been able to weather the Covid-19 storm and react to changing demands from customers in a positive manner.

“Our performance is a great credit to the team at Softcat – the support they have shown to each other, our customers and our partners continues to be a key feature of our business”
Graeme Watt, Softcat

Softcat has been a consistent performer ever since it went public, and in its latest numbers indicated that the business had not seen a material impact from the coronavirus in its 2020 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, increasing the overall headcount by just shy of 13%.

The feeling that the leading channel partners are weathering the storm was one also shared by Bill Scannell, president of global sales and customer operations at Dell Technologies, who told MicroScope that it had recently spoken to its top 50 to 60 partners and the mood around the channel was upbeat.

 “They are bullish and we are bullish, and we are there to win,” he added. “We are seeing this huge flock to quality and seeing customers and partners want to do business with fewer strategic partners that are going to be there for the long road.”

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