Softcat growth continues with coronavirus yet to have impact

Sales rise of 20 per cent reported

Softcat saw revenue rise by a fifth in its first half of the year in what it says was "another period of strong profit growth and excellent cash generation".

Sales for the period were up 20.8 per cent to £524.1m, while gross profit climbed 18 per cent to £111.7m.

Gross invoiced income (or revenue under old reporting standards) was up 19.7 per cent to £727.7m.

CEO Graeme Watt said: "We are pleased with the strong performance in the first half as we continue to drive share gains in a healthy market.

"Our focus as always rests on the provision of IT infrastructure solutions to SMB, enterprise and public sector organisations and in the past six months we have continued to establish new customer relationships at the same time as deepening partnerships with existing customers.

"We continue to invest in the business to extend our capabilities, driven and informed by customer demand, and to ensure we have the resources to execute on our current and future growth plans."

Softcat said that its second half of the year has started well, adding that it has 'not seen a material impact from the ongoing COVID-19 outbreak'.

"Although this does create uncertain for the remainder of our financial year," it added.

"Given the strength of our business model, lack of any bank debt and a strong cash position, we will continue to invest in our business and are confident in our ability to continue to build market share and drive profitable growth over the longer term."

On an earnings webinar Watt said that Softcat has now reported 29 consecutive six-month periods of year-on-year income and profit growth.

Software now accounts for over half of gross invoiced income.

He also elaborated on the firm's growing multinational strategy, which has seen it set up four overseas entities to help it service its UK and Ireland-based customers, two of which have dedicated employees in region.

A fifth entity, in the Netherlands, is set to open in the current quarter.