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Softcat reports big profit increase

Softcat reports big profit increase

Reseller and service provider Softcat has reported a rise in annual turnover and a big jump in operating profits for the 12 months ended July 31, 2021.

Sales increased 7.4% year-on-year to £1.16 billion, with operating profits up 27% to £119m, helped by lockdown restrictions reducing operating expenses.

The customer base expanded by 2.3% to 9,700, and the gross profit per customer went up by 14.6% to £28,400.

Turnover from public sector customers remained flat at £284m, leaving Softcat’s FY21 gains to come exclusively from its small- and medium-sized business segment. Revenues there were up 20% to nearly £636m.

The SMB growth was led by the hardware resale business, which was up almost 26% to £556m, which included more spent on security, networking, collaboration and printing items as staff returned to offices.

But services revenues declined 14% to £99.1m despite increased multi-cloud and digital workplace business. Turnover from software licenses dropped 3.6% to £501m.

On the market outlook, the firm said: “The new financial year has started well. We anticipate that the resumption of business travel and events will create a significant headwind during 2022. We continue to target double-digit gross profit growth.”

The company's share price was down over 6% on the news, and is currently down 4% as of around 3pm today.