Numerous factors supporting Softcat growth

Channel player shares H1 numbers, with all the signs pointing to its momentum continuing

The market is growing, there is share to be gained and the proposition from Softcat remains one that chimes with both public and private sector customers, according to its CEO.

Graeme Watt explained why the channel player had managed to deliver another set of solid half-year numbers, covering the period up to the end of January, indicating that he felt the business was in a strong position.

“It’s a growth story for us,” he said. “I think it has been for a while, but this is a market that’s growing, it’s a growth story across the board. So we’ve been very pleased to report a set of six-month results that have double digit growth across software, hardware and services. It’s got double-digit growth across enterprise, mid-market and public sector.”

He said the firm saw the general market growing at between 6-7%, and there were numerous drivers that were behind that figure, so the prospects for the rest of the year were also good.

“The demand for workspace, tools, devices and applications around the workspace, the demand for networking, and security and cyber security, and the demand for hybrid infrastructure, is continuous at a pace,” said Watt.

As well as the general market growth, he said the firm continued to take market share and that it was deepening relationships with existing customers.

“[We have a] strategy of continuing to invest in people, tools and systems to create the scope and pull onboard new customers,” said Watt. We’ve grown our [average gross profit per customer] by 12%.”

Reasons to be positive

Some in the channel have expressed concerns about rising inflation and shortages, but Watt said there were more reasons to be positive.

“There are so many drivers for growth, and even if that market growth did come up a little bit from the 6 or 7% I mentioned, we still deliver about two-thirds of our growth in any given period from driving market share,” he said.

H1 numbers showed a revenue increase of 33.6% to £770.9m, with gross profit up by 11.7% at £150.2m. In terms of product segments, hardware revenues improved by 56.1%, software by 8.2% and services by 25.2%.

Softcat has been open about its sustainability ambitions and Watt said it expected that to only become more important to customers going forward.

“Those credentials are important, but we expect to see that grow,” he said.

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