The innocuously named Softcat (SCT) showed a hard nose for business in the six months to 31 January. The managed IT services provider - which listed in November and will soon join the FTSE 250 index - coughed up a 13 per cent rise in adjusted operating profits to £19.5m.
Softcat partners with over 200 vendors, including Cisco and Microsoft, to provide hardware, software and services to small businesses, large enterprises and public sector organisations. Strong demand for cyber security and data analytics drove sales up 12 per cent to £139m in the software segment. Moreover, brisk trading in data storage and networking solutions underpinned revenue growth of more than a quarter in the budding services business. But flagging interest in desktop computers and laptops constrained hardware sales growth to just 4 per cent.
The group's gains stemmed from a recruitment drive: the number of account managers rose by more than a quarter to nearly 400. Their success in winning new clients meant Softcat's customer base grew by 7 per cent to over 9,000. Management also focused on more lucrative solutions and offering excellent customer service. The upshot was a 3 per cent rise in average revenue per customer to about £31,800.
Analysts at Credit Suisse expect pre-tax profits of £44.1m in the year to July 2016, giving EPS of 17.4p (from £40.8m and 16.4p in FY2015).
| SOFTCAT (SCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 310p | MARKET VALUE: | £611m | |
| TOUCH: | 309-310p | 12-MONTH HIGH: | 355p | LOW: 240p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 35p* | NET CASH: | £54.9m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015† | 266 | 17.3 | 7.1 | nil |
| 2016 | 294 | 15.4 | 6.1 | 1.70 |
| % change | +10 | -11 | -14 | - |
Ex-div: 31 Mar Payment: 29 Apr †Softcat listed in November 2015 | ||||
