Robust profit growth at IT infrastructure provider

IT infrastructure technology and services provider, Softcat, has released its half year results for the six months to 31 January 2021, which it says reflect another period of strong profit growth and cash generation.

The listed business, which has offices in Leeds, Manchester, Birmingham and London, recorded a 10.1% rise in revenues, up to £577m from £524.1m in 2020.

Gross invoiced income increased to £870.8m from £727.7m, while pre-tax profits rose to £57m from £40.5m the year before.

Softcat says continued investment in its staff and technical proposition throughout the pandemic has driven double-digit growth in average gross profit per customer from both new and existing clients.

Its customer base rose 1.5% to 9,600 despite the ongoing challenges of remote working.

And staff headcount increased to 1,658 at the end of the period, a rise of 177 (12%) over the past 12 months.

The business says the second half has begun well and its Board is confident the company will deliver a full year result significantly ahead of its previous expectations.

Graeme Watt, CEO, said: “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. 

“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 a great culture at Softcat that gives us a cutting edge in the good times and has served us extremely well throughout these recent turbulent times.

“I am very much looking forward to working in person again with the team, our customers and our partners just as soon as we safely can.

“We have continued to invest in staff, internal systems and tools to support current growth which puts us in a strong position to deliver on future opportunities.  

“Headcount increased by 12% on the same period in the prior year as we continued to recruit across all functions.”