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Softcat reports good profits growth despite big dip in sales

Softcat reports good profits growth despite big dip in sales

Sales were down and profits were up at VAR and infrastructure services player Softcat for the half year.

This morning’s results at the FTSE 250 firm for the six months ended 31 January, show sales slumped almost 9% to £467.2m.

A shining light is that gross invoiced income – increasingly popular to show off among VARs and services players – was up 4% to £1.263 billion.

The gross profit for the six months was up 11% to £196.5m, and the operating profit went up 5.8% to £66.7m.

The interim dividend was increased by 6.3% on the back of these results to 8.5p, with earnings per share creeping up 2.4% to 25.6p. The increased dividend no doubt helped bolster Softcat’s share price on the day, which is currently over 7% higher.

Softcat said the lower overall sales were primarily down to lower hardware purchases. While the emphasis across the reselling space is marked by a push to more services growth, be in no doubt that hardware means plenty to Softcat.

It says it expects hardware sales to recover going forward, and they will be important to enabling the company to return as an annual £1 billion-turnover player again. The £1 billion was breached in 2022, but slipped back under that line last year.

Softcat’s headcount continued to grow, with almost 15% extra bodies now floating around the group.

Graham Charlton, Softcat CEO, said: “We continue to execute against our key objectives to win new customers and sell more to existing customers.

“The future opportunity in our industry remains incredibly exciting. AI, data management and cyber security, amongst other technologies, continue to drive rapid transformation in technology, and this will generate growth across all areas from the cloud and data centre to the edge.”