Softcat (LON:SCT) Posts Earnings Results

Softcat (LON:SCT) issued its quarterly earnings results on Wednesday. The company reported GBX 75.80 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:

• 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 Down 9.3%

Shares of SCT stock traded down GBX 179 during mid-day trading on Wednesday, hitting GBX 1,745. The company’s stock had a trading volume of 1,568,184 shares, compared to its average volume of 1,786,119. Softcat has a 52-week low of GBX 1,083 and a 52-week high of GBX 2,134. The business has a 50-day moving average price of GBX 1,943.73 and a 200 day moving average price of GBX 1,734.73. The company has a debt-to-equity ratio of 13.07, a quick ratio of 1.38 and a current ratio of 1.25. The stock has a market cap of £3.75 billion, a price-to-earnings ratio of 24.89, a PEG ratio of 11.51 and a beta of 0.58.

Key Softcat News

Here are the key news stories impacting Softcat this week:

• Positive Sentiment: Softcat reported fiscal 2026 profit growth of 19.4% and revenue growth of 35.4%, demonstrating continued demand for IT products and services. Softcat FY2026 profits rise 19.4% as revenue grows 35.4%
• Positive Sentiment: The company raised its dividend after profit growth exceeded expectations, supporting the income-investment case. Softcat lifts dividend as profit growth beats expectations
• Positive Sentiment: Softcat posted quarterly earnings per share of 75.80 pence, with an 8.06% net margin and 45.16% return on equity, highlighting strong profitability.
• Positive Sentiment: A deal to move into the U.S. market through GDT gives Softcat an additional international growth opportunity and broadens its addressable market. Softcat posts double-digit profit growth and moves into U.S. market with GDT deal
• Neutral Sentiment: Analysts have highlighted an upgraded profit outlook and robust underlying IT demand, although these positives are being weighed against forward-growth concerns. What Softcat’s upgraded profit outlook and robust IT demand mean for shareholders
• Negative Sentiment: Fiscal 2027 guidance points to slower growth, prompting investors to reduce expectations even after the strong results. Softcat shares fall as outlook points to slower growth
• Negative Sentiment: Jefferies reaffirmed a “Hold” rating and set a GBX 1,700 price target, below the reported opening price, indicating limited near-term upside in the broker’s view.

Wall Street Analysts Forecast Growth

SCT has been the subject of a number of recent research reports. Deutsche Bank Aktiengesellschaft cut Softcat to a “hold” rating and lifted their price objective for the company from GBX 1,800 to GBX 2,140 in a research note on Wednesday, August 26th. Jefferies Financial Group reaffirmed a “hold” rating and issued a GBX 1,700 target price on shares of Softcat in a report on Wednesday. JPMorgan Chase & Co. lifted their target price on shares of Softcat from GBX 1,950 to GBX 2,300 and gave the stock an “overweight” rating in a report on Monday, September 7th. Finally, Berenberg Bank upped their target price on shares of Softcat from GBX 1,950 to GBX 2,400 and gave the stock a “buy” rating in a research note on Monday, September 21st. Four equities research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, Softcat currently has a consensus rating of “Hold” and an average target price of GBX 1,993.75.

Insider Buying and Selling at Softcat

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

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.