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magazineSoftcat avoids coronavirus impact for now
Softcat (SCT) 998p
Gain to date: 3.9%
Original entry point: Buy at 959.8p, 1 August 2019
Software and IT services outfit Softcat (SCT) delivered a reassuring set of half-year results on 17 March and said it wasn’t really being affected by the coronavirus outbreak.
Revenue climbed 21% to £524.1m as the company added 4.2% more customers, while boosting average gross profit per customer by 12%. Pre-tax profit rose 19% to £40.5m.
Softcat declared an interim dividend of 5.4p per share, up 20% year-on-year. On the outlook, the company said the second half of its financial year had started well, with no material impact from the spreading coronavirus.
However it acknowledged the crisis created uncertainty for the remainder of its financial year.
Numis analyst Tintin Stormont says the company is well placed to withstand the impact of coronavirus in the short-term and sees potential opportunities down the track.
He adds: ‘Medium-term, we believe this experience is likely to have a profound shift in how businesses view the importance of IT not only in ensuring business continuity but finding effective ways of working.’
SHARES SAYS: Softcat hasn’t escaped the market sell-off this year, yet the stock has only fallen to levels last seen in October 2019 which is nowhere near as bad as many other companies. We remain positive on the shares.
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