Asia FX dithers as dollar steadies before Powell speech; yen muted after CPI data
Investing.com -- Softcat’s gross invoiced income surged 19.3% in the first half of its fiscal year, exceeding expectations and prompting an upgrade to its full-year operating profit forecast, sending its shares up by over 11% on Wednesday.
The UK-based IT infrastructure provider now anticipates low double-digit operating profit growth, up from its previous single-digit estimate.
For the six months ending January 31, gross invoiced income reached £1.51 billion, while revenue rose 16.8% to £545.6 million.
Gross profit grew 12.1% to £220.2 million, with gross profit per customer increasing to £43.1k from £38.9k.
Operating profit climbed 10.4% to £73.7 million, with earnings per share up to 28.7 pence from 25.6 pence.
Despite growth in absolute profit, margins saw slight pressure, with gross profit margin declining to 14.6% from 15.6% and operating profit margin slipping to 4.9% from 5.3%. The company attributed this to higher volume, lower-margin transactions in some areas.
The company’s cash conversion rate improved to 110.9%, boosted by efficient working capital management and a £16 million upfront payment from a customer.
Softcat (LON:SCTS) ended the period with £141 million in cash, maintaining its debt-free status. It also raised its interim dividend by 4.7% to 8.9 pence per share.
CEO Graham Charlton called the performance “slightly ahead of expectations”, citing an “encouraging second-half pipeline”.
Analysts at Morgan Stanley (NYSE:MS) described the results as a "testament to their resilient business model”, despite ongoing macroeconomic challenges.
Growth was broad-based across customer segments, with enterprise, mid-market, and public sector sales all rising.
Cybersecurity remained a key driver, as customers prioritized digital security investments. By product category, software invoiced income grew 22.5% to £942.8m, hardware rose 18.5% to £326.6m, and services climbed 8.8% to £237.7m.
Softcat has expanded its workforce to 2,617, strengthening its technical capabilities. The company is also pushing ahead with international expansion, targeting Germany and the U.S.