Reseller’s gross invoiced income balloons by 20 per cent amid 41 per cent spike in operating profits
Softcat's share price has shot up by double digits this morning after the reseller published strong H1 results and an optimistic outlook for its next six months.
The reseller reported a 19.7 per cent increase in gross invoiced income (which it previously reported as revenue before switching to a new reporting standard in 2019) to £870.8m for the six months ending 31 January 2021. Actual revenues under IFRS 15 grew by 10.1 per cent to £577m.
Softcat's profits grew at an even greater rate during the six-month period, thanks to a strong top line performance and Covid-related cost savings.
Operating profits jumped by 41 per cent year on year to £57.1m while gross profits surging by 20.4 per cent to $134.5m.
The reseller claims that it is carrying "good momentum" into the second half of its fiscal year and expects to report full year results "significantly ahead" of expectations.
Although it expects cost savings related to Covid to begin to dissipate over the next six months, Softcat says it remains "optimistic about the growth opportunity" in the market.
Softcat's share price surged by 13 per cent as trading began this morning to 1,774.10 pence reaching a market cap of £3.53bn.
The LSE-listed firm grew its customer base by 1.5 per cent year on year during the six-month period to 9,600 despite "the ongoing challenges" of doing business remotely.
Headcount grew by 12 per cent or by 177 employees over the past 12 months to 1,658 staff, Softcat claims.
It added that investments in people and its technical proposition during the pandemic has helped the reseller drive double-digit growth in average gross profit per customer from both new and existing clients.
"We are pleased with the strong performance in the first half of the financial year in which we continued to grow and take share in a market that has remained relatively resilient during the pandemic," said Softcat CEO Graeme Watt in a statement.
"We did see a reduction in income from some corporate customers during the last quarter of our previous financial year, but during the current period that effect has gradually diminished. In addition, the business has benefitted from a temporary reduction to some elements of the cost base, although we expect this to normalise as the second half develops. The company has taken no form of government support during the pandemic nor made any headcount reductions and we expect that to continue to be the case. We have been delighted to be able to put part of our Marlow head office to good use as a Covid vaccination centre over the past few months and this will continue into the summer.
"A huge thank you must go to the entire team. None of this performance could have been achieved without their fantastic support and care for our customers, partners and each other."