Softcat (SCT) H2 2024 earnings summary

Executive summary

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

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

• Maintained a well-diversified customer base across enterprise, SMB, and public sector segments.

• Continued investment in people, headcount, IT systems, and digital platforms to support future growth.

• Strategy remains focused on leveraging a broad IT solutions offering and deepening customer relationships.

Financial highlights

• Gross profit grew by 11.7% year-over-year to £417.8 million; gross invoiced income rose 11.3% to £2.85 billion.

• Operating profit increased by 9.3% to £154.1 million; profit after tax up 6.3% to £119.0 million.

• Revenue declined 2.3% to £962.6 million due to hardware weakness and mix shifts.

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

• Total ordinary dividend increased 6.4% to 26.6p; special dividend up 65.9% to 20.9p, resulting in a record total dividend of 47.5p.

Outlook and guidance

• Expects another year of double-digit gross profit growth and high single-digit operating profit growth for FY25.

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

• Q1 performance consistent with full-year guidance.

• Continues to invest to capitalize on significant and growing market opportunities.