Softcat (SCT) H1 2025 earnings summary

Executive summary

• Achieved strong first half performance with double-digit growth in gross profit (12.1%) and operating profit (10.4%), slightly ahead of expectations, supported by strategic execution and a well-diversified customer base.

• Customer base expanded by 1.4% to nearly 10,300, with gross profit per customer up 10.7% to £43.1k.

• Maintained a strong balance sheet with £141 million in cash, zero debt, and cash conversion of 110.9%.

• Interim dividend increased 4.7% to 8.9p per share, with basic EPS up 12.3% to 28.7p.

• High customer satisfaction (98%) and employee engagement (88%) maintained, with continued investment in people and culture.

Financial highlights

• Gross invoiced income rose 19.3% to £1.51bn; revenue up 16.8% to £545.6m; gross profit up 12.1% to £220.2m; operating profit up 10.4% to £73.7m.

• Services gross invoiced income grew 8.8%, with internally delivered services particularly strong.

• Gross margin declined by 1.0 percentage point to 14.6% due to higher volume, low-margin sales, and lower software margins.

• Net interest income rose to £3.1m; profit after tax grew 12.5% to £57.4m.

• Gross profit per employee up 3.0% to £173.2k; average headcount increased 6.6%.

Outlook and guidance

• Upgraded FY25 operating profit guidance to low double-digit growth, from previous high single-digit, with double-digit gross profit growth expected to continue.

• Management confident in second half pipeline and continued market share gains, supported by ongoing investment in people and technology.