Customer service focus leads to growth at Softcat

IT infrastructure products and services provider Softcat reported strong revenue and profit growth for the 12 months to 31 July, in its full-year results on Wednesday, with revenue improving 12.8% to £672.4m.

The FTSE 250 firm saw gross profit rise 17.5% to £120.7m during the period, with a gross profit margin 0.8 percentage points higher at 18.0%.

Its gross profit included the benefit of a one-off procurement saving of £3.4m.

Adjusted operating profit was up 15.2% to £46.8m, and the company reported a cash conversion rate of 85.5%.

Softcat’s net cash position at year end stood at £62.4m.

Adjusted diluted earnings per share were up 15.8%, with customer numbers up 7.5% on the prior year and average headcount up 21%, which the board said was driven by record sales and service staff recruitment.

“We are pleased to report continued strong organic growth at Softcat with 12.8% revenue growth, 17.5% growth in gross profit and 15.2% growth in adjusted operating profit, achieved against a backdrop of very modest growth in the UK economy which has equally been reflected in the IT market,” said CEO Martin Hellawell.

“We have continued to win large numbers of new customers and earn increased spend from our existing customers.”

Hellawell said that had been achieved by the firm’s “relentless focus” on customer service.

“We were delighted to be named as the UK's No.1 Best Workplace by the Great Places to Work Institute in April 2016.

“Other recent notable highlights include entering the FTSE 250, the opening of our Glasgow branch, an incremental 133 people joining our organisation in the last financial year, and a plethora of industry awards including HP Enterprise Partner of the Year, Cisco UK&I Commercial Partner of the Year and Sophos UK&I Partner of the Year.”