Softcat’s weird year of up and down results has continued.
Softcat has reported 14.2 per cent growth in gross profit in its latest annual results to £373.8 million and operating profit up 3.5 per cent to £140.9 million. However, the company has reported a decrease in revenue – down 8.6 per cent to £985.3 million.
Softcat CEO Graham Charlton said the decrease was due to the revenue figures only accounting for the margin element of software growth.
“It gets netted down and doesn’t reflect the gross income we’re billing to customers. Revenue declined purely because we sold much less hardware year-on-year than in software. Hardware was down year-on-year for two reasons. Because we sold fewer client devices and had a major customer buying lots of hardware from us last year, we knew that that would reduce as well.”
Charlton explained that the industry’s general decline in client device sales played into it, but he stressed that it only represents a small part of Softcat’s business.
On the overall results, Charlton continued: “We once again made progress on selling deeper into existing customers, with double-digit gross profit per customer growth, while also attracting new customers, delivering 1.9 per cent growth in the customer base.
“We continued our investments for future growth, growing headcount by 20.5 per cent to 2,315, by investing across all departments.”
The company’s share price climbed up on the announcement after falling badly yesterday (and earlier this year).
Charlton, who stepped into the CEO role in August after eight years as CFO, touched on AI’s critical role in company operations and potential customer offerings.
“We’ve just spent the last three or four years implementing a new finance system, data storage, and governance structures. So within our operations, we are perfectly set up to embrace and use some AI tools,” Charlton said.
Charlton explained that for 2024, Softcat is looking to strengthen its AI offering and invest in its security and cloud services offering.
