Softcat (SCT) H2 2024 earnings summary

Executive summary

• Achieved double-digit growth in gross profit and operating profit for FY24, driven by strength in software and services despite a decline in hardware sales.

• Results exceeded expectations, supported by a broad technical offering and a well-diversified customer base across enterprise, SMB, and public sector segments.

• Customer base expanded to 10,300, with gross profit per customer up 9.7% year-over-year.

• Continued investment in people, headcount, IT systems, and digital platforms positions the company for future market share gains.

Financial highlights

• Gross profit grew by 11.7% to £417.8m, and gross invoiced income rose 11.3% to £2.85bn.

• Operating profit increased 9.3% to £154.1m, and profit after tax rose 6.3% to £119.0m.

• Revenue declined 2.3% to £962.6m due to lower hardware sales and mix shifts.

• Cash conversion was strong at 95.9%, with year-end cash of £158.5m.

• Total ordinary dividend increased 6.4% to 26.6p; special dividend up 65.9% to 20.9p, with £76m returned to shareholders.

Outlook and guidance

• FY 2025 expected to deliver another year of double-digit gross profit growth and high single-digit operating profit growth.

• Guidance does not rely on a rebound in hardware or client devices.

• Q1 performance consistent with full-year guidance; company continues to invest to capitalize on market opportunity.