IT services group Softcat has posted a positive trading update for the full-year ended 31 July 2020, and says it's ready to pay share dividends again after “cancelling” the interim one earlier this year.
“The company has continued to trade satisfactorily during the final three months of the year and has delivered operating profit for the full-year slightly ahead of the board's expectations,” said the London Stock Exchange-listed firm.
It added that cash generation also “remained strong” and it is now its intention to resume its “normal” dividend policy and timetable later this year. This will include payment of the interim dividend previously “cancelled” in March of this year, as Western Europe entered the height of the pandemic, and Softcat wanted to conserve cash in case it needed it to protect the company.
Before the interim dividend was cancelled - at 5.4p per share - it was worth the equivalent to a cash outflow of £10.7m, which would have been paid on 15 May 2020. Before that now reversed decision, the company reported a first half that saw revenue reach £524m - up 20% annually - with operating profits up 19% to £40.5m. The interim dividend was then increased 20%.
“These [latest] actions are dependent upon there being no material adverse movement in prevailing conditions in the period between now and publication of the company's full-year results, scheduled for 20 October 2020,” the company added. Details of the final dividend decision will be provided within the October announcement
Graeme Watt, Softcat CEO (pictured), said: "We are pleased to have been able to maintain staff levels without any actions to furlough staff in this period.
“Cash generation has been strong and as a consequence we intend to resume our normal dividend policy in addition to the reinstatement of the cancelled interim dividend.”
