Softcat trading statement adds to positive market vibes

Those looking for signs that the market is holding firm in the face of economic doom and gloom will have been cheered by the latest trading statement from Softcat.

The firm updated investors on the progress of its first quarter, ended October, with a couple of phrases in the brief statement underlining the view that recession is yet to hit the channel.

The channel player spoke of “demand remaining strong” and how “customer behaviour across all segments [was] unchanged from the trends seen in the prior year”.

Softcat’s last fiscal year showed that its strategy of pursuing organic growth was delivering and there were indications that senior management feel this is still the case.

“The team has again delivered strong results during the first three months of the new financial year across all customer segments and areas of technology,” said Graeme Watt, CEO at Softcat.

“While the wider economic environment remains uncertain, we continue to see robust demand, which highlights the critical role that IT infrastructure plays in modern organisations, whether public or private.”

The firm said trading in its 2023 fiscal year was so far meeting expectations and the board was pleased with the progress made in Q1.

Softcat’s trading statement comes after several pieces of channel research in the last few weeks have amplified the continued optimism in the market and expectations that 2023 will continue to be another period of growth.

Context shared its ChannelWatch findings, which revealed that 62% of managed services providers expected growth in the next three years. It followed that up last week with growth forecasts for Western European distributors, with the expectation that 2022 will end with 3.7% year-on-year growth.

Then findings shared by TD Synnex showed that 82% of partners expected growth this year, driven by strong demand for a raft of different managed services.

Although there are understandable fears that economic headwinds, including inflation and energy cost rises, could trigger a deeper recession, there are few signs of it so far across the channel.