Channel bellwether Softcat has announced that its first half turned out better than it anticipated.
The UK’s largest pure-play IT reseller said trading for the six months to 31 January 2018 had been “strong across all segments and ahead of the board’s expectations”.
Softcat said that revenues for its fiscal 2017 grew ahead of expectations to £832.5 million now it seems that gross profit and adjusted operating profit increased by 22 and 19 percent, respectively, in the first half of its fiscal 2018, “reflecting consistent performance across the period and further successful execution of strategy”.
“Strong H1 performance will support the full-year outturn, and as a result, the board expects to exceed previous expectations slightly”, the company said.
It was an interesting quarter for Softcat. It saw itself in the courts when a Leeds newsagent complained the outfit had not paid its £840 milk bill.
The total claim was £900 once newsagent Omran Malik’s costs were factored in. Malik runs a Mace convenience shop on Carlton Parade, Leeds, around half a mile north of Softcat’s Leeds offices.
“I have supplied the defendants’ office in Leeds with deliveries of milk”, said Malik’s claim form, lodged with the county court. “I have been issuing invoices on a monthly cycle direct to Softcat PLC head office in Buckinghamshire. My final reminder was sent on the 04/10/2017 by 1st class signed for delivery to both offices.”
Softcat has appointed Graeme Watt to join the Board as Chief Executive after 1 April 2018.
IT infrastructure products and services outfit said that Watt has more than 25 years of experience in the IT distribution industry and is currently Senior Vice President EMEA, Advanced and Specialist Solutions, Tech Data Corporation (“Tech Data”), a position he has held since March 2017.
He was promoted to that role when Avnet’s Technology Solutions business was acquired by Tech Data in early 2017. Prior to that, he was President for Avnet Technology Solutions, EMEA for almost seven years and a member of Avnet’s Global Executive Committee.
Watt previously spent six years at Bell Micro (as President of Global Distribution) and his earlier career included roles at Tech Data (President EMEA) and Computer 2000 (Managing Director UK & Ireland). Graeme Watt is also a qualified accountant (ICAEW).
As previously announced, and effective from the date of Graeme joining Softcat, Martin Hellawell (currently Chief Executive of the Company) will become Non-Executive Chairman and Brian Wallace (currently Non-Executive Chairman) will retire from the Board.
The Board’s decision to appoint Watt follows an extensive search process led by Brian Wallace and Lee Ginsberg (Senior Independent Director) with the assistance of global search firm, Odgers Berndtson.
Brian Wallace, Chairman of Softcat plc, said: “Our extensive search generated an impressive field of candidates and Watt stood out for his extensive knowledge of the sector and the reseller channel as well as his strong leadership skills and delivery of growth in very sizeable business units at Avnet and Tech Data. Equally importantly, he understood and was excited by the dynamic, enthusiastic, people-oriented culture at Softcat and its importance to our Company’s future success. In Graeme, we believe we have found someone who can nurture the best of what we do today with the experience and dynamism to scale and grow the business yet further.”
Watt said: “Softcat is a significant customer of Tech Data and I have therefore seen at close quarters its remarkable growth based on a great team providing outstanding service to a rapidly growing customer base. I look forward to introducing myself to the business, getting to know its people and operations even better and working with everyone to ensure the continued success of Softcat.”
Even while it hunts for a new CEO Softcat is making piles of dosh.
Softcat’s shares were up in early trading this morning as it announced that sales were up by nearly a quarter in its first full year of trading as a public company.
Revenues for the 12 months ended 31 July 2017 rose by 24 percent to £832.5 million, which the Marlow-based reseller thanks to winning 800 new customers and selling more to
Adjusted operating profit grew by 10.1 percent to hit £51.5 million.
Softcat CEO Martin Hellawell announced this summer that he is to step back into the non-executive chairman role, and in this morning’s stock exchange announcement, the firm said its hunt for a new CEO “is progressing”.
Softcat has initiated a search for a new CEO after announcing that Martin Hellawell is quitting after 11 years at the top scratching post.
Hellawell will leave once a replacement is found, but will stay on as non-executive chairman.
It is not as if the company has been doing badly, Softcat revealed in a trading update that its Q3 trading has been in line with expectations. Having obliterated its growth expectations in its fiscal first half, Softcat continued to “trade well” during Q3, according to a trading update released this morning.
During Hellawell’s tenure, Softcat’s revenues have boomed ten-fold, from £67 million to £672 million. It floated on the London Stock Exchange in November 2015.
Hellawell said it was the right time for him to step back from the day-to-day cut and thrust of the business.
He said that he was operational and hands on in every detail, and after 11 years it takes its toll on you.
“There’s a really great opportunity for Softcat ahead of us, and it’s time to get some fresh energy into the organisation to move us forward.”
Hellawell said Softcat managing director Colin Brown has ruled himself out of the running and that his successor will most likely be an external appointment.
Hellawell said stepping back to a non-exec role would allow him to focus on charity work and on his health and fitness, but stressed he will still be heavily involved with Softcat, and the wider industry.
Channel outfit Softcat is reporting some rather good figures for its first public full year.
The channel player reporting strong results and a £28m special dividend. The firm saw a 12.8 percent increase in revenues to £672.3m and gross profit coming in at 17.5 percent up on last year at £120.7 for the year ended 31 July. That gross profit number was helped by a one-off procurement saving of £3.4m.
Softcat saw a 7.5 percent increase in customer numbers and increasd its staff by 21 per cent to support its growth plans.
The channel outfit went public in November last year and the share price has consistently outperformed the initial valuation.
Martin Hellawell, Softcat CEO, said that the last financial year had seen it open an office in Glasgow, add 133 to the workforce and pick up a clutch of best partner awards from leading vendors.
“We are pleased to report continued strong organic growth at Softcat with 12.8 per cent revenue growth, 17.5 per cent growth in gross profit and 15.2 per cent 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,” he said.
“We have continued to win large numbers of new customers and earn increased spend from our existing customers. This has been achieved by our relentless focus on customer service, which is in turn driven by an excellent and engaged team of people at Softcat,” he added.
The Marlow-based software reseller Softcat has listed in a deal that valued the business at £472.3 million.
Softcat valued its shares at 240p, and they climbed as high as 270p in early trading. It said the IPO allowed its founders to sell down their stakes and the group would receive no proceeds from the flotation.
Founder Peter Kelly set up the firm in 1993 and has described himself as a “weird and eccentric entrepreneur.” He sold just over a third of his stake, raising an estimated £88m. He retains a holding of around 33 percent, which is worth around £150 million.
Kelly ran the company until 2006 and was its chairman until three years ago, owning around half the equity before the listing.
Martin Hellawell, chief executive, owned 12 percent of the business, valued at £56 million. He sold a third of his holding.
The float also created a number of paper millionaires among its employees. Staff, excluding founders, own some 24 percent of the company.
Kelly hitchhiked around the world before joining Xerox sales in 1981. His past ventures include founding a recruitment firm, and he launched an Apple dealership in 1988 before going on to found Softcat in 1993.
Started as a mail-order software firm, it has grown to become a major reseller to Microsoft and other large providers, as well as providing data centres for small businesses across the UK.
The group’s sales last year rose 18 pe cent to £596m with profits of £40.6 million. Hellawell said in a statement: “We are delighted with the outcome of the IPO process thus far and now look forward to fully focusing on the running and future development of our business.”
Vin Murria joined the board. She is one of the UK’s longest-standing female IT entrepreneurs, she ran Advanced Computer Software until it was taken over by US private equity group Vista Partners last year in a £725 million deal.
Hardware giant Dell claimed its two top channel tiers, PartnerDirect, and Premier and Preferred, grew by 29 percent in the last year.
Michael Dell, the founder of the company, told attendees that there are now 1,174 Premier and Preferred level partners in EMEA. He said the channel continued to be important to Dell’s strategy.
Dell claimed that PartnerDirect, including the online solutions configurator has been adopted by over 600 partners across 10 companies.
Michael Dell said: “We see our partners as a core part of our team, our strategy and our future, and we will continue investing to grow our business together.”
Gongs were handed out to UK company Softcat, winning UK partner of the year and platinum partner of the year. Pictured are Laurent Binetti, Greg Davis and Michael Dell himself. Michael Dell is second from the left and we don’t know which one is Laurent, which Greg and we don’t know who the others are. Sorry.