Softcat gets the cream as profit soars to £28m

Reseller not ruling out future acquisitions

Softcat has not ruled out acquiring other companies in its quest for growth as it revealed that operating profit for its FY13 soared to nearly £30m.

According to its audited results which were released today, its normalised operating profit soared 22 per cent annually to £28.2m on revenue which rocketed 30 per cent to £395.8m.

The firm put its growth down to its focus on employing the best staff and providing customers with top-quality customer service, which it claims helped it win an extra 1,750 new customer accounts in its last fiscal year.

Softcat's managing director Colin Brown (pictured below) said he was proud of the company's ability to grow both its top and bottom lines in its last year.

"Profit is certainly in line with our expectations," he said. "Often when you're growing with high revenue growth it's quite a challenge to keep the profit growing at a similar rate. It's sometimes one or the other. This is the genius of the ‘and' - growing revenue and the profit at the same time."

For its current financial year, which ends in the summer, Softcat is eyeing up 20 per cent annual growth which would take sales to £470m.

Brown said the lower percentage growth is simply down to it being more difficult to grow as quickly as Softcat gets bigger, but he did not rule out boosting its top line with an acquisition if the conditions were right.

"We wouldn't rule [an acquisition] out," he said. "Our strategy is to continue to achieve our objectives through organic development but we are definitely not averse to an acquisition if the right one came along. It would be more likely to be a smaller, bolt-on type of acquisition rather than anything humungous but we're still waiting for the right one to come along.

"I think if someone is willing to sell a good business, they will probably want more than we think it is worth and likewise - that's always the challenge - but we will always keep our eyes peeled."

He said the firm has not entered discussions to acquire companies and had only quietly considered the idea on occasion.

"We're busy enough growing the way we are growing," he said.

In the past three years, the Marlow-headquartered reseller's turnover and operating profit have shot up 172 per cent and 174 per cent respectively. But despite the consistent results, Brown said there are always areas in which the firm can improve.

"The areas we're doubling down on in terms of focus is on... solutions and making sure we are providing high value to our customers," he said. "We've edged towards that over the past 24 months but that is the area we want to get better and better at.

"We're growing it but starting from a slow base... so we want to grow even further with that. It's not particularly from a revenue perspective, it's just because we want to do a great job for our customers."