Softcat continues to reward investors and demonstrate the robustness of the channel model with another set of solid full-year numbers.
The channel player reported an 8.6% increase in revenues, to pass the £1bn mark, while operating profits also improved by 10.9% year on year to £93.7m for the 12 months ended 31 July 2020.
The numbers included the trading period during the worst of the lockdown and the firm saw its customer base and average gross profit from each relationship grow over the fiscal year.
It also increased headcount by 15% during the period and continued to invest in its services and technical expertise.
Despite the positives, the firm struck a note of caution about the future, noting that the public sector had performed strongly in its 2020 financial year but there had been “a softening in demand from corporate customers”.
Softcat’s market update revealed that the year, two-and-a-half months in, had started strongly, but corporate customers continued to be wary about committing to spending in the short term, which could make conditions challenging.
Softcat CEO Graeme Watt said the year had been a good one, although split very much into two halves, with the pandemic covering the second half.
“We were able to grow in every single quarter year over year, and had really good customer metrics. We invest a lot of time, energy and money in our people and we spend a lot of time investing in our customers. We’re a very customer-led organisation so it’s great to continue our growth of customers,” he said.
“Technology has continued to be in strong demand in the pandemic. The pandemic has focused the spotlight on how much people want and need technology to survive and continue to make progress. We’re in a great industry”
Graeme Watt, Softcat
Over the year, Softcat increased its customer numbers by 300, taking it to a total of 9,500. Watt said it had taken market share and its strategy was working, adding that the headcount expansion had been underpinning those growth ambitions.
“We continue to take share and we were investing last year and took our headcount up by 15%, and finished up with over 1,500 heads. We plan to continue that investment this year. As we build the capabilities and skills and capacity for future growth, we’re very excited about what that future growth could bring,” he said.
In terms of the softness in the corporate market, Watt said there was not as much clarity around spending plans as it would like, but the pandemic and threat of a no-deal Brexit were adding to anxieties at a customer level.
Softcat’s chief financial officer, Graham Charlton, said that when it came to Brexit, the firm was not exposed to a large amount of EU trade and had plans in place to deal with any eventuality.
“Even in the worst outcome we have good plans in place that would allow us to mitigate,” he said, adding that the firm was being cautious because it was diligent to do so in the current circumstances.
Softcat indicated that it was still pursuing a strategy of organic investments and would continue to do so in the year ahead.
Echoing the views of other channel leaders, Watt said the technology industry had proved its value at a time of crisis and the prospects for tech remained strong.
“Technology has shown itself to be a business that’s continued to be in strong demand in the pandemic. The pandemic has focused the spotlight on how much people, not just want technology, but need technology to survive and continue to make progress. We’re in a great industry,” he said.
