Further growth for listed IT services business

IT infrastructure technology and services Softcat says it delivered further double-digit year-on-year growth in revenue, gross profit and operating profit in quarter three.

The business, which has bases in Leeds, Manchester, Birmingham and London, has published its trading update for the third quarter ended 30 April 2021.

It says it continued to trade well during the period, building on an “exceptional” first half performance reported in March 2021.

The firm adds its run-rate transaction volumes strengthened in the latest period and cash collections and conversion have remained good, in line with normal trends.

Softcat’s board anticipates results for the full year ending 31 July 2021 will be ahead of expectations.

Looking further ahead, the update notes: “Cost savings related to Covid are expected to reverse as we enter the next financial year and travelling to see customers and internal events again become possible.

“Secondly, the first half of FY21 contained a number of the largest deals the company has ever transacted, significant elements of which were one-off in nature.

“These two factors combine to contribute about £12m to EBIT in FY21, the majority of which was seen in the first half.

“We remain confident of the road ahead and expect to see further growth on normalised EBIT in FY22, likely to result in reported EBIT being broadly in line with the upgraded performance now anticipated for FY21.”