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Softcat indicates 2023 on track to finish strongly

Channel player shares trading update for its first quarter, including favourable comparisons lined up against this time last year

Softcat has indicated its fiscal first quarter was solid and that there are signs the past few months are up on this time last year.

The channel player issued a trading statement for its Q1, which covers the three months ended 31 October, with investors being informed the business had been able to deliver year-on-year double-digit gross profit growth.

The performance was in line with the Board’s expectations as the firm tapped into some of the market growth areas.

“I’m pleased to report that the team has once again delivered a strong performance in the period,” said Graham Charlton, Softcat CEO. “The demand patterns were consistent with what we saw in the second half of FY 2023, with interest in AI [artificial intelligence] technology and the enabling infrastructure continuing to build across the customer base.”

“This is a very exciting time for our industry and customers need more support than ever with the business challenges they are facing,” he added. “The breadth of our offering enables us to fully engage with this opportunity.”

Last month, Softcat shared preliminary results for its full year ended 31 July. Although revenue dipped slightly, down to £985.3m, the gross profit number was up by 14.2% to £373.8m.

The firm continued to focus on a strategy of organic growth, adding fresh customers and breaking through the 1,000 barrier in the fiscal year, and was able to get those already on board spending more with the channel player, with gross profit per customer increasing.

Supporting AI

Softcat is not alone in recognising the potential of AI, with the majority of its rivals also looking at ways they can support the technology.

Yesterday, managed service player SysGroup shared its H1 numbers and placed great emphasis on developing its AI and machine learning capabilities, highlighting the increased demand from customers for those technologies.

Softcat has been doing its own research around where customers are looking for support, and recently shared the results, with cyber security at the top of the list.

Along with security, channel customers were also looking to invest in digital workspaces, with funds going into devices and end user computing as they react to the changing needs of a post-pandemic workforce.

Respondents were keen to enable greater levels of flexibility and tap into generative AI, as that also filtered into the digital workspace, to make improvements in productivity and security.

The other area that ranked highly as a priority was around data, with many customers looking to make sure they were able to protect and use their information. That was followed by networking and connectivity, datacentre and private cloud.

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