Softcat (LON:SCT) Releases Earnings Results

Softcat (LON:SCT) issued its quarterly earnings data on Wednesday. The company reported GBX 36.10 EPS for the quarter, Digital Look Earnings reports. Softcat had a return on equity of 45.16% and a net margin of 8.06%.

Here are the key takeaways from Softcat’s conference call:

• Exceptional H1 financial performance — Gross invoiced income rose 33.3% to just over £2bn, gross profit grew 22.6% to £269.9m and underlying operating profit increased 27.3% to £93.8m, with underlying basic EPS up 25.8% year‑on‑year.
• Strong balance sheet and shareholder returns — underlying cash conversion was 147.6% (102.4% ex a £42m customer prepayment), ending cash of £206m, a £45m share buyback program initiated (partially completed) and an interim dividend up 11.2% to 9.9p.
• AI and systems investments accelerating growth and productivity — integration of Oakland, a new data lakehouse and in‑house tools (eg, “CatNav”) plus Dynamics 365 rollouts are already improving sales, marketing and fulfillment and are presented as a material long‑term growth/efficiency tailwind.
• One‑off implementation and margin pressure — H1 non‑underlying costs were £8.5m (FY26 now expected at the bottom of a £20–25m range) from sales/HR system builds and acquisition amortization, while GP margin declined ~120bps due to lower‑margin large solutions.
• Near‑term operational uncertainty — memory (RAM) shortages and timing shifts (only ~50% of a large data‑center project recognized in H1 with the balance expected in Q3) create H2 visibility risks despite upgraded guidance to high single‑digit underlying operating profit growth.

Softcat Stock Down 0.9%

Shares of Softcat stock opened at GBX 1,242.48 on Friday. Softcat has a 1-year low of GBX 1,083 and a 1-year high of GBX 1,960. The company has a market capitalization of £2.44 billion, a PE ratio of 18.77, a P/E/G ratio of 11.51 and a beta of 0.60. The company has a debt-to-equity ratio of 13.07, a current ratio of 1.25 and a quick ratio of 1.38. The business has a 50-day moving average of GBX 1,255.81 and a 200-day moving average of GBX 1,422.91.

Analysts Set New Price Targets

Several equities research analysts recently commented on the company. Berenberg Bank reiterated a “buy” rating and set a GBX 1,900 target price on shares of Softcat in a report on Thursday. JPMorgan Chase & Co. upgraded Softcat to an “overweight” rating and upped their price target for the stock from GBX 2,820 to GBX 2,950 in a report on Thursday, December 4th. Jefferies Financial Group lowered their price objective on shares of Softcat from GBX 1,500 to GBX 1,210 and set a “hold” rating for the company in a research report on Thursday. Finally, Shore Capital Group reiterated a “buy” rating on shares of Softcat in a research note on Thursday. Seven equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, Softcat currently has a consensus rating of “Moderate Buy” and an average target price of GBX 1,908.89.

About Softcat

Softcat plc operates as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom. The company advices, procures, designs, implements, and manages technology, such as software licensing, workplace technology, networking, security, and cloud and datacenter for businesses and public sector organizations. It also offers public cloud, collaboration, connectivity, data centre and private cloud, devices, and financial solution services. In addition, the company provides IT asset management, lifecycle solutions, modern management, security, software licensing, supply chain operation, and virtual desktop and application.