In This Article:
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Gross Profit Growth: 12.1% increase to GBP220 million.
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Operating Profit: GBP73.7 million, up 10.4% from H1 FY24.
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Revenue Growth: 16.8% increase, driven by hardware GII.
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Gross Invoiced Income (GII): 19.3% increase to GBP1.5 billion.
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Cash Conversion: 110.9%, with a cash balance of GBP141 million.
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Interim Dividend: 8.9p, up 4.7% year on year.
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Customer Base Growth: 1.4% increase to almost 10,300 customers.
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Gross Profit per Customer: 10.7% increase to GBP43,000.
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Headcount Growth: 6.6% average increase.
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Net Interest Income: Increased to GBP3 million.
Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Softcat PLC (FRA:SF5) reported double-digit growth in both gross profit and operating profit, slightly ahead of expectations.
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The company achieved a gross profit growth of 12.1% to GBP220 million, driven by strong performance across hardware, software, and services.
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Softcat PLC (FRA:SF5) maintained a strong balance sheet with a cash conversion rate of 110.9% and ended the period with GBP141 million in cash.
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The company announced an interim dividend payment of 8.9p, reflecting a 4.7% increase year on year.
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Softcat PLC (FRA:SF5) continues to expand its customer base, growing by 1.4% to nearly 10,300 customers, with a 10.7% increase in gross profit per customer.
Negative Points
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Gross margin declined by 100 basis points year on year due to higher-volume, low-margin sales and a decline in software margins.
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Operating costs grew by 12.9% year on year, driven by increased commissions and a rise in wages and salaries.
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The company experienced slower growth in the workplace technology segment, particularly in client devices.
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Despite strong overall performance, the growth in the public sector was slightly slower compared to previous years.
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There is ongoing macroeconomic uncertainty, which could impact future growth and customer spending behavior.
Q & A Highlights
Q: Can you provide more color on Q1 versus Q2 performance and headcount growth expectations? A: Kathryn Mecklenburgh, CFO, explained that Q2 growth was higher than Q1 due to differences in the base period, but overall, there was pleasing progress across the half. Headcount growth is expected to be between 6% to 8% for the full year, with H2 likely picking up slightly. The company plans to continue investing in IT to drive efficiencies and expects headcount growth to lag behind gross profit growth in the future.
Q: Can you elaborate on the pipeline and whether it is trending higher compared to previous years? A: Graham Charlton, CEO, noted that the pipeline is difficult to measure due to the large number of sellers and customers. However, there is a clear appetite for big infrastructure projects among customers, and the company is encouraged by the number of conversations around AI and other topics, which are expected to result in good business in the second half.