Softcat (LON:SCT) Announces Earnings Results

Softcat (LON:SCT) posted its quarterly earnings results on Wednesday. The company reported GBX 75.80 earnings per share for the quarter, Digital Look Earnings reports. Softcat had a net margin of 7.61% and a return on equity of 46.24%.

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

• Softcat reported an exceptional FY 2026, with gross profit up 24.7% to £616.3 million and underlying operating profit up 19.4% to £215.1 million. Customer growth accelerated to more than 10,500, while gross profit per customer increased 20.6%.
• Underlying operating costs rose 27.7%, faster than gross profit, reducing the operating-profit-to-gross-profit ratio to 34.9% from 36.4%. Profitability was also affected by lower-margin product mix, Microsoft licensing changes, large lower-margin projects and one-off employee, advisory and incentive costs.
• For FY 2027, management expects high-single-digit underlying operating profit growth excluding GDT, with gross profit growth modestly moderated by tougher comparisons, the absence of unusually large projects and prior-year memory-related order pull-forward. Non-underlying costs are expected to rise roughly two to two-and-a-half times because of GDT acquisition and integration expenses.
• Management sees substantial long-term demand from AI-driven infrastructure investment, including data centers, networking, security, cloud and services. The GDT acquisition is expected to add U.S. and Americas fulfillment, infrastructure expertise and global cross-selling opportunities, although estimated post-deal leverage will initially rise to 1.3x net debt to EBITDA.

Softcat Stock Up 2.0%

Shares of LON:SCT traded up GBX 34 during mid-day trading on Friday, hitting GBX 1,731. 1,099,425 shares of the company traded hands, compared to its average volume of 1,775,668. Softcat has a 52-week low of GBX 1,083 and a 52-week high of GBX 2,134. The firm has a market cap of £3.72 billion, a P/E ratio of 24.69, a PEG ratio of 11.51 and a beta of 0.58. The company has a debt-to-equity ratio of 10.41, a quick ratio of 1.38 and a current ratio of 1.39. The firm’s 50 day simple moving average is GBX 1,935.22 and its 200 day simple moving average is GBX 1,742.66.

Insider Buying and Selling at Softcat

In other Softcat news, insider Kathryn Mecklenburgh purchased 176 shares of the firm’s stock in a transaction dated Monday, September 7th. The stock was acquired at an average cost of GBX 2,045 per share, with a total value of £3,599.20. Also, insider Graham Charlton purchased 176 shares of the firm’s stock in a transaction on Monday, September 7th. The stock was acquired at an average price of GBX 2,045 per share, for a total transaction of £3,599.20. Insiders have purchased 384 shares of company stock worth $749,739 over the last 90 days. 2.91% of the stock is currently owned by company insiders.

Analyst Ratings Changes

A number of analysts have recently weighed in on the stock. Deutsche Bank Aktiengesellschaft downgraded shares of Softcat to a “hold” rating and boosted their target price for the stock from GBX 1,800 to GBX 2,140 in a report on Wednesday, August 26th. JPMorgan Chase & Co. raised their price target on shares of Softcat from GBX 1,950 to GBX 2,300 and gave the company an “overweight” rating in a research report on Monday, September 7th. Jefferies Financial Group reissued a “hold” rating and set a GBX 1,700 target price on shares of Softcat in a report on Wednesday. Finally, Berenberg Bank reissued a “buy” rating and issued a GBX 2,400 target price on shares of Softcat in a research report on Friday. Four analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Softcat currently has a consensus rating of “Hold” and a consensus target price of GBX 1,993.75.

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.