Softcat has navigated challenging market conditions to deliver shareholders more cheer with a strong set of full-year 2024 results.
The firm’s shares climbed this morning on the back of the figures and the announcement of a special dividend payout, two-thirds higher than last year.
Judging the firm by its key metric of gross invoiced income, which increased by 11.3% to £2.85bn, it was a solid period for the 12 months to 31 July 2024.
Operating profit grew by 9.3% to £154.1m and the firm continued to invest in talent, increasing headcount by 14.3%. Revenue was down 2.3% at £963m.
The channel player has consistently followed a strategy of deepening relationships with existing customers, which could be seen with an increase of 9.7% in gross profit per customer, and bringing fresh ones on board, with an 1.8% increase year on year.
Graham Charlton, CEO of Softcat, said the firm had seen some customer hesitation around spending, but its wide customer base and technology propositions enabled it to deliver growth.
“The market was tough through the year. Everybody’s talked about that. So for us to do double-digit gross income and gross profit growth, slightly ahead of the expectations we set coming into the year, and nearly 10% operating profit growth, [we’re] really pleased about that,” he said.
“We continued to invest strongly through the year as well. So last year and this year, taken together, we’ve grown our headcount by about 30%, so compounding 15% annual headcount growth. We’ve looked hard at our strategy and evolved our plans there, really sharpening our focus on the service and technical skills we need for this age of data and AI [artificial intelligence] that we’re entering,” Charlton added.
The guidance we’re putting out and the expectations we have for the year ahead do not depend upon the market improving
Graham Charlton, Softcat
Looking ahead, Softcat indicated that it expected to deliver another year of double-digit gross profit growth, together with high single-digit operating profit growth in the 2025 financial year.
“The guidance we’re putting out and the expectations we have for the year ahead do not depend upon the market improving,” said Charlton.
He added that the business had continued to invest in headcount and systems to ensure it was able to support staff and customers.
“We’re also doing a lot of work to re-engineer our own business, using new digital platforms and data insights to create a better user experience for our people, and customer experience for our customers and vendor partners too,” he said.
“We think the opportunity ahead is still bigger than it ever has been. We can’t grow fast enough to get anywhere near our potential in the markets we operate in. We think there’s decades of terrific opportunity ahead, which is why we’ll keep balancing strong profit growth with lots of investment for the future,” he added.
Charlton said that although market conditions had been challenging, the channel remained as relevant as ever.
“All you’ve got to do is look at the value chain and how it works. IT infrastructure has never been more complicated. It’s never been more the fabric of society and industry, and customers do not have the capability internally to understand all of that and to choose the solutions and architect the solutions and implement the solutions they need, and the manufacturers of the technology do not have the capacity to talk to those customers individually. So, what we do in the value chain has never been more relevant,” he said.
