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Softcat to list on the London Stock Exchange

With an expected market cap of £500m, Softcat is the first UK reseller to float in over a decade

It’s official; Softcat has announced its intention to float on the London Stock Exchange next month.

The reseller’s intention to go public has been common knowledge for a while now. Back in May, Softcat revealed that is was seeking a City broker to handle the floatation. This morning, the Marlow-based company made it official.

The IT reseller has an expected listing price of £500m and given its stellar financials, it’s easy to understand why. In the three years ended 31 July 2015, Softcat increased its revenue organically from £395.8m to £596.1m and adjusted operating profit from £28.1m to £40.6m. Investors will be keen to get in on the action.

But investors aren’t the only people licking their lips as all of the proceeds from Softcat’s flotation will go to existing shareholders, creating a few overnight millionaires. Peter Kelly, who founded the company and retired as chairman three years ago, owns around half the company and is in line to collect in the region of £250m. CEO Martin Hellawell stands to bag somewhere around £15m.

"We have successfully grown Softcat with a clear vision and purpose,” Hellawell commented. “Our growth model is simple but effective - grow our business with existing customers and win new customers, while continuing to offer a world-class service. By continuing to focus on these key areas, we believe that we can continue to drive the growth of our business and, as a consequence, create shareholder value.”

Softcat has carved out a niche in the small and medium business space; a sector that Hellawell says is ‘underserved’ by its rivals. While this strategy has worked well for the reseller up until now, hell hath no fury like investors looking for sustained growth. Despite the impressive trajectory that Softcat has enjoyed, the IPO will bring a raft of new pressures.

For the UK IT sector, the news is overwhelmingly positive. Softcat’s arrival on the stock exchange marks the first float of a UK IT reseller in over a decade, and as TechMarketView points out, is the third British tech company soon to list on the LSE. “We are in the midst of what is becoming the hottest spell for UK tech IPOs in a long time,” notes the analyst firm.

Brian Wallace, non-executive chairman of Softcat said that the IPO will enhance the public profile of the reseller as well as attracting new customers. “After delivering an impressive 33% CAGR for revenues in the period FY2010-2015ii, I believe that Softcat is well placed to continue on its growth path," he commnted.

Softcat expects to be eligible for inclusion in the FTSE UK Index Series at the quarterly review in March 2016.


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