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Softcat keeps momentum going in Q1

Channel player shares a trading update on the progress it made in its first fiscal quarter

Softcat has given a trading update on its first quarter, with a clear indication to investors and the wider market that the channel player has kept momentum from FY21 going.

The firm shared some details of its Q1, covering the three months ended 31 October, with year-on-year revenues growing along with gross and operating profits.

The update also revealed that cash generation had remained strong and in line with normal trends, and that trading had met the board’s expectations.

The Q1 update comes a month after Softcat delivered a solid set of full-year results and hiked its dividend thanks to profit improvements.

For the full year to the end of July, the channel player reported a 7.4% increase in revenue to £1.16bn and a 27.4% climb in operating profits, up from £93.7m to £119.4m.

The firm reported a 2.3% increase in its customer base, average gross profit per customer improved by 14.6%, and the business increased headcount by 11% as it continued to invest in its operations.

Speaking about the continued progress made in its first quarter, Graeme Watt, CEO of Softcat, said the same trends that drove the business through much of the past fiscal year were continuing. “The team has continued to perform well during the first quarter and we saw good growth from both mid-market and enterprise corporate customers, as well as the public sector,” he said. “Customer demand has remained high and the hardware supply situation is stable.”

End-of-year period

Softcat still has the busy end-of-year period to get through, and Watt indicated that looking ahead, there was optimism that the business would continue to deliver.

“We’ve a lot still to do in the next nine months, but the team is delivering with confidence and is benefitting from being able to spend more time together in our offices,” he said. “I couldn’t be more delighted with their effort and attitude, and would also like to thank our customers for their ongoing support.”

Softcat recently shared research into tech priorities for customers, and found that changes in the workplace, with a shift to hybrid working, were driving spending and playing to the channel player’s strengths.

It quizzed firms across numerous verticals to get a sense of what the tech priorities were, and 60% indicated that digital workplace solutions would be important in the next 12 months.

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