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Evolutio
n
Annual Report and Accounts 2024
Evolution:
The process of change
anddevelopment overtime
Watch us evolve
Every year we pick a ‘word for the year’.
The word is our anchor point for our
values and behaviours which we promote
and encourage throughout the year.
Italso strongly aligns to our strategy.
Ourword this year is ‘evolution’ and is
important to us for many reasons. For us,
evolution means a journey and aspiration
to improve, advance and evolve, to
better collaborate, listen and learn to
ensure we keep on the right path. It’s
important for our employees to keep
evolving personally too, as we continue
to modernise our systems and ways of
working, adapt to changes in our market
and improve our capabilities at all levels
in the business.
All of these points have received
signiﬁcant attention over the last year
asyou will see in this Annual Report.
For our customers, we continue to
evolve our customer offerings through
our reshaped technology propositions
and we are meeting the challenges of
changes in our channel. Continuous
evolution is vital as an underpin to
ourstrategy to sell more to existing
customers and grow our customer base.
It also supports our strategic enablers
tomaintain relevance and to expand
ouraddressable market.
Internally, we are evolving our way of
working by investing in and embracing
new technologies. For example, we
havemade an extensive investment in
licences for Microsoft Copilot AI as part
of a Group-wide rollout, which will boost
employee productivity and free up more
time for them to focus on the most
important parts of their roles.
Our culture remains the most critical
reason for our success. Whilst we evolve
and grow, we have set a fundamental
objective that all of this must be achieved
whilst continuing to promote our unique
culture and relentless focus to deliver for
our customers and other stakeholders.
Explore how we evolve
Our
journey of
evolution
Read more
onpages 2 and 3
Evolved for
success
Read more
onpages 22 and 23
Leading the
evolution
Read more
onpages 12 to 15
1Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1–89
Strategic report
1 Highlights
2 Our evolution
4 At a glance
6 Strategic roadmap
7 Investment case
8 Chairman’s statement
12 Group Q&A
16 Chief Executive Ofﬁcer’s review
20 Evolving technology
22 Business model
24 Our market and offering
30 Strategy
36 KPIs
38 Chief Financial Ofﬁcer’s review
42 Section 172 –
Stakeholderengagement
50 Employee engagement
52 Social value
60 Climate-related Financial
Disclosures (‘CFD’) andsustainability
83 Risk management
90–153
Corporate governance
90 Introduction to corporate governance
93 Board leadership and
Companyfocus
96 Governance report
107 Audit Committee report
117 Nomination Committee report
123 Sustainability Committee report
125 Remuneration Committee report
147 Directors’ report
154–199
Financial statements
154 Independent auditor’s report
162 Consolidated statement of proﬁt or
loss and other comprehensive income
163 Consolidated statement of
ﬁnancialposition
164 Consolidated statement of changes
in equity
165 Consolidated statement of cash ﬂows
166 Notes to the consolidated
ﬁnancialstatements
191 Company statement of
ﬁnancialposition
192 Company statement of changes
inequity
193 Notes to the Company
ﬁnancialstatements
199 Company information and
contactdetails
Highlights
Financial highlights
1. During FY2022, there was a change in
accounting policy following the IFRS IC agenda
decision – IFRS 15 Revenue from Contracts with
Customers, treatment of software revenue as
agent revenue. This resulted in the restatement
of the FY2021 comparatives. As a result,
revenue is only available on a comparable
basis for 2021 to 2024.
2. Customer base is deﬁned as the number of
customers who have transacted with Softcat in
both of the preceding twelve-month periods.
3. Gross invoiced income (‘GII’) and cash
conversion are alternative performance
measures. Please see page 41 for further
deﬁnitions and reconciliations.
Pages 1 to 89 form the Strategic Report
ofSoftcat plc for the ﬁnancial year ended
31July 2024. The Strategic Report has been
approved by the Board of Softcat plc and
signed on behalf of the Board by Graham
Charlton, CEO, and Katy Mecklenburgh, CFO.
Operational highlights
• Gross proﬁt growth: 11.7%
• Operating proﬁt growth: 9.3%
• Cash conversion: 95.9%
• Employee engagement: 90%
• Customer satisfaction: 98%
• Customer base up by: 1.8%
• Gross proﬁt per customer growth: 9.7%
View more online
%
V
iew more on
l
in
e
For more
informationvisit:
www.softcat.com
Sustained performance
Gross proﬁt £m
£417.8
417.8
373.8
24
23
327.2
22
276.4
21
235.7
20
Operating proﬁt £m
£154.1
154.1
140.9
24
23
136.1
22
119.4
21
93.7
20
Customer base ’000
2
10.3
10.3
10.1
24
23
9.9
22
9.7
21
9.5
20
Gross invoiced income £m
3
£2,852.2
2,852.2
2,563.3
24
23
2,507.5
22
1,938.4
21
1,646.2
20
Cash conversion %
3
95.9
95.9
93.2
24
23
76.2
22
89.9
21
88.0
20
Revenue £m
1
£962.6
962.6
985.3
24
23
1,077.9
22
784.0
21
Gross proﬁt per customer £’000
2
£40.6
40.6
37.0
24
23
33.0
22
28.4
21
24.8
20
2 Softcat plc Annual Report and Accounts 2024
Our evolution
Our journey
ofevolution...
1993
Founded by
Peter Kelly
1995
First proﬁtable
yearoftrading
We’ve come a long way and evolved
what we do: from selling PCs out of
aHigh Wycombe shed in 1993 to
delivering transformative solutions
toour customer base.
2002
Software
catalogue
became
Softcat
2013
Softcat
launches
eCat:
itsonline
purchasing
platform for
customers
The eCat platform
has signiﬁcantly
evolved since
launch and its
usehas grown.
Itnow accounts
foraround half
ofall our core
customer orders.
2004
Moved to
Marlow
Turnover
reached
£50m
2010
Opened the
London ofﬁce
Sunday
Times #1
BestSmall
Company
toWork For
2015
Listed on
the London
Stock
Exchange
2007
35
employees
built an
orphanage
in Fiji
2014
Sixth Best
Workplace
inEurope
Turnover reached
£500m
2011
Charity
donations
exceeded
£100k
2008
Second ofﬁce
opened in
Manchester
Turnover reached
£100m
200 2
3Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
2024
A fresh new look for
Softcat, but with the
same values and
culture which has
made us a success
formore than
threedecades
Passed the 2,500
employees mark,
demonstrating our
commitment to invest
and grow the business
The future
#1
We want to continue
to be the UK’s #1 VAR
with the most satisﬁed
customers, best
culture and highly
engaged employees
Read more on pages 24 to 29
... keeps us
moving forward
2017
99%
customer
satisfaction
for seven
years in
arow
2022
Carbon neutral
achieved
(through
offsetting
scope 1,
scope2 and
operational
scope 3
emissions).
This has been
maintained
since
2019
Ranked sixth
inRateMy
Apprenticeship’s
Top 100
Employers
2023
Opened the
Newcastle
ofﬁce
2020
Launched
the Softcat
Community
Network
2021
Softcat became
theUK’s #1 VAR,
aposition it
stillretains
Transformed part
ofour Marlow ofﬁce
into a COVID-19
vaccination centre
First FTSE 250
company to receive
5* from the UN
forSustainable
Development Goals
4 Softcat plc Annual Report and Accounts 2024
Our offering
We support commercial and public
sector organisations to design, procure,
implement and manage their digital
infrastructure. Our continuing success
puts us in the privileged position to
invest in new capabilities in exciting and
emerging areas of technology. Our
offerings are evolving and are changing
to be organised around ﬁve propositions
for ourcustomers:
Cyber security
Softcat is proud to have grown and evolved to become the UK’s largest value
added reseller (‘VAR’). Our goal remains to be the leading IT infrastructure
solutions provider as measured by employee engagement, customer
satisfaction and shareholder returns. Success will create opportunities
forourpeople and drive growth for our customers and partners.
Evolved to be the best
The UK’s largest
valueaddedreseller
Read more on pages 28 and 29
At a glance
We’re proud to collaborate and work
closely with all the biggest global
technology vendors, as well as emerging
innovators, to deliver the broadest
possible choice for our customers and
we work hard on maintaining excellent
alliances with them. In many instances,
we have best-in-class accreditations
withour vendors, which means both
ourvendors and customers trust us to
deploy the right solutions in the right
way. Our employees are highly skilled
and knowledgeable, with ﬁrst-class
knowledge of our vendors’ solutions
andproducts and how they can be used
to help our customers use technology
tosucceed.
#1
Our vendors
Data, AI
andautomation
Networking
andconnectivity
Workspace
Hybrid platforms
Read more on pages 26 and 27
5Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Where we operate
UK
Ireland
Australia
USA
Hong Kong
Singapore
Netherlands
Onwards and upwards
We are predominantly based in the
UK,with branches in Ireland, the
Netherlands, Hong Kong, Singapore
andAustralia. Business in our US branch
is transferring to our wholly owned
subsidiary Softcat US LLC as we continue
to build on our multi-national operations.
Our customers are based inthe UK and
Ireland and our multi-national business
supports the international needs of our
UK and Irish customers through the
branch and subsidiary company network.
We’ve expanded and evolved the
capability of our multi-national
operations so they can handle the
mostcomplex logistics and operational
demands of our customers, regardless
of the geography they operate in.
We continue to grow and at the end of
FY2024 we exceeded 2,500 employees
and we further grew our customer base.
As we continue to grow, we maintain
ourfocus on our customers. We achieved
an impressive rating of 98% customer
satisfaction, which built on the prior year
rating of 97%.
Read more on our approach to
stakeholders on pages 42 to 49 and on
our progress to build a more sustainable
business on pages 60 to 82.
98%
customer satisfaction
10,291
customer base
2,509
employees
6 Softcat plc Annual Report and Accounts 2024
Strategic roadmap
A simple but effective roadmap
Our purpose and strategy is unchanged and continues to bring us
success. It serves as a guide for Softcat’s direction, culture and how
we should approach key decisions. We have a well-deﬁned purpose
and vision which helps both our internal and external stakeholders
tounderstand our long-term goals and how we plan to achieve them.
Our purpose
To help customers use technology to succeed, by putting our
employeesﬁrst.
Our vision
To be the leading IT infrastructure product and services provider in terms
ofemployee engagement, customer satisfaction and shareholder returns.
Enabled by our... Guided by our values
Strategy
Fun
Responsibility
Community
Intelligence
Passion
Read more on pages 52 to 59
People and culture.
Read more on page 18
Ease of doing business.
Read more on page 17
Maintaining relevance and expanding
ouraddressable market.
Read more on pages 17 and 18
Acquire more customers.
Read more on pages 30 to 35
Sell more to existing customers.
Read more on pages 30 to 35
7Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Investment case
Why invest in Softcat?
We have grown into the largest provider of cyber security, cloud
andITinfrastructure solutions in the UK, supporting our UK and
Irishcustomerswith their needs.
This means we are well positioned to help commercial businesses of all sizes and public sector
organisations to design, procure, implement and manage the right IT solutions. We set ourselves apart
from our peers as the solutions provider of choice through our unique culture and breadth of offering.
By providing the best IT solutions with exceptional customer service, we provide the underpinnings
to the modern digital economy. As can be seen from our strategic roadmap, we have a simple but
effective business strategy. We are well placed in our market, which is in a sector seeing substantial
growth and we think there is so much more growth to come.
We advise,
design,procure,
implement and
manage technology
for our customers
Read more on page 4 and pages 24 to 29
We work with all of the leading global technology
manufacturers to provide our customers with the
broadest possible choice of IT infrastructure solutions
to suit their needs. This includes software licensing,
workplace technology, networking, security, cloud
and datacentre. We do all of this through our own
teams of technologists augmented by numerous
specialist service partners. In many instances, we have
best-in-class accreditations with our vendors which
means both our vendors and customers trust us to
deploy the right solutions in the right way.
400+
vendors and partners
Proven customer
excellence
Read more on pages 24 to 29
We provide much the same technology as our
competitors. What makes us different is the passion
and expertise of our people in supporting our
customers across our offering.
98%
customer satisfaction
A dedicated and
passionate team
Read more on page 52
We believe that if people enjoy what they do, and
care about the company they work for, they will
perform at a higher level. Our culture is the vital
ingredient to providing outstanding service to our
customers and we consistently achieve high levels
of employee engagement.
90%
employee engagement
Market-leading
growth and
ﬁnancialstrength
Read more on pages 16 to 19 and
pages38 to 41
We have delivered 19 consecutive years of gross
invoiced income and proﬁt growth, all of which
hasbeen organic. The business has no debt and
astrong track record of cash generation.
19%
compound annual growth rate
in GII over the last ten years
Large and growing
addressable market
Read more on pages 24 to 29
We estimate our UK and Irish addressable market
isaround £60bn. Our addressable market has a
forecast compound annual growth rate of around
10% through to 2028. Although we are the UK’s
largest VAR, we have a relatively small share of the
addressable market, giving us the opportunity to
deliver market-leading growth.
5%
estimated share of
addressable market in FY2024
8 Softcat plc Annual Report and Accounts 2024
I am delighted to be highlighting
another strong performance in
our Annual Report this year from
the entire team at Softcat.
We started the year with new leadership
in three key positions, namely Chairman,
CEOand CFO. I would like to begin by
extending an enormous thank you and
say well done to Graham Charlton and
Katy Mecklenburgh for their outstanding
contributions and leadership in their
ﬁrstfull ﬁnancial year as CEO and CFO,
respectively. The performance of the
business is explained in detail in
Graham’s CEO review on pages 16 to
19and in Katy’s CFO review on pages
38to 41. We have moved forwards on
anumber of keyﬁnancial measures,
including growth on gross proﬁt, gross
proﬁt per customer and operating proﬁt.
It has not been an easy market and the
team has stood up and met the challenges
of a weak UK macro-economic picture,
stalling demand in the workspace and a
snap July general election. Against that
backdrop, the team has remained focused
on delivering what the customer wants
and needs, delivering
growth as we have
continued to take market
share and have
grown the gap over our nearest rivals in
the UK and Ireland.
Our focus on delivering outstanding
customer service by nurturing a culture
with the highest possible levels of care,
motivation and engagement remains
keyto our current and future growth. I am
delighted that our annual engagement
scores for customers and employees
were again industry leading and the
teamdoes a great job of sifting through
the detailed feedback and acting on it.
Strongly inﬂuenced by that employee
feedback, the team has invested in AI
with Microsoft Copilot foremployees
and weare modernising and investing in
key workspace platforms to work smarter
andmore effectively at the same time as
developing further our existing and new
ofﬁce environments tomake sure they
areﬁt for purpose.
Another record yearatSoftcat
Our focus on delivering outstanding
customer service by nurturing a culture
with the highest possible levels of care,
motivation and engagement remains
keyto our current and future growth.
Graeme Watt
Non-Executive Chairman
Introduction to governance
Read more about our approach to
governanceonpage 92
How we evolve
Read more about how we’ve evolved onpages 4
and 5
Stakeholder engagement
Read more about how we engage with our
stakeholders onpages 42 to 49
Chairman’s statement
9Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
A refreshed brand
A fresh new look for Softcat, but with
the same values and culture which
hasmade us a success for more than
threedecades. This gives ourselves a
modern look and further emphasises
what wedo and what we stand for.
Wefeel our new brand identity will
further differentiate us as aclear
market leader in our sector,drawing
more attention to us, aswecontinue
to build on loyalty andtrustwithour
customers and otherstakeholders.
The world has embraced hybrid working
and we are no different. We have a strong
presence in the ofﬁce so we can foster the
learning, collaboration and relationship
building we all need, and I think we have
got the balance just about right. We aim
to deliver productivity levels that are at
least as good as our peers, but it will
take more time for us all to work out
justwhat the right balance is for our
employees and our customers in
thelonger term.
From a customer perspective, the team has
focused on responding to the feedback
they have provided on relationship and
operational attributes. Our customers
have been clear to highlight cyber security,
artiﬁcial intelligence, automation and
workspace as key areas of focus. We are
ready to respond to those demands and
at the same time are taking a look at the
wider picture. The team has been working
really hard to evolve and further deﬁne
our technology and services proposition
– what it is, where we build or partner
and how we deliver and articulate.
Thissharper focus should really help
customers partner with Softcat to
deploythe elements of IT infrastructure
that they need to run their business.
How we brand our business is important
too and many of you will have noticed
inthis report that we have refreshed our
branding. This gives us a fresh, modern
look and further emphasises what we
doand what we stand for. I hope our
refreshed branding will resonate well
with all of our audiences. We feel
ournew brand identity will further
differentiate us as a clear market leader
in our sector, drawing more attention to
us, as we continue to build on loyalty
and trust with our customers and other
stakeholders. Creating a clear and
differentiated brand, in conjunction with
our equally unique culture, will serve us
well to stand out in a sector which still
remains highly fragmented.
If I turn to look at our future opportunities,
they exist everywhere and are well
captured in our technology pillars.
Everysingle business and public sector
entity has needs in the areas of hybrid
platforms, workspace, cyber security,
networking and connectivity and data/AI/
automation. Our focus is to take time to
understand what each individual customer
needs and customise our offering to them.
With rapidly evolving trends around the
hyperscalers, marketplaces, AI and
continued growth in the core technology
areas, our customers need help with the
challenges of complexity, choice and
pace of change more than ever before.
We aim to say ‘yes’ to the customer as
often as we can. We would like to be
theirprimary partner where we can, or
ﬁrst in the queue if we are not. We are
notopportunity limited so one of our key
imperatives remains the allocation of the
right level of resources to the right parts
of our business. Those resources are
mainly our people and our internal capital
allocation on our own IT infrastructure
projects to stay current and deliver even
higher levels of satisfaction to our team
and our customers.
We operate in a market that continues
tobe fragmented and difﬁcult to
differentiate. Our focus on delivering
outstanding customer service born
fromour strong employee culture is
asimportant as ever and the Board
andmanagement remain focused on
preserving our culture across many
aspects, such as celebrating our
achievements, charitable fundraising
and volunteering, improving inclusion,
delivering further diversity, and driving
employee engagement as the number
one priority. Our community network
isas vibrant and supportive as ever and
wehave again made important strides
forward on our efforts to be a more
environmentally responsible and
sustainable company. During the year,
the Board held very productive and
extensive discussions with management
on our people capabilities and
development. The resulting plans are
akey element of our wider strategy.
It’s not just our culture that makes us
stand out of the pack. We are the only
ITinfrastructure solutions provider to
hold the AWS Premier Tier Partner status
and the Azure Expert MSP accreditation
in the UK. In this world of growing cloud
consumption, that is really signiﬁcant.
From a people perspective, we are
currently recognised for four different
Great Places to Work (super large
company category) attributes, namely:
Best Workplaces; Best Workplaces
forDevelopment; Best Workplaces
forWellbeing; and Best Workplaces
forWomen.
Board changes
A number of changes to the Board were
set out in the 2023 Annual Report, some
of which were planned for our 2024
ﬁnancial year. In line with those
announcements, I am delighted to say
that Mayank Prakash joined the Board in
September 2023 and Jacqui Ferguson
joined a few months later in January 2024.
They both took part in a comprehensive
on boarding programme and are already
making signiﬁcant contributions to
theBoard.
Graham Charlton has now completed
hisﬁrst year as our CEO. As part of our
orderly succession plan, Graham
invested a signiﬁcant amount of energy
and time to prepare for the move to CEO
and at the same time pave the way for
Katy Mecklenburgh to join as Softcat’s
new CFO in June 2023. Graham’s deep
understanding of the business and what
makes Softcat successful meant that he
settled in as CEO very quickly and he is
focused on driving the business on its
next chapter of growth. Katy’s strong
afﬁnity to our culture and fresh
perspectives have allowed her to make
early signiﬁcant contributions to the
performance and direction we are
taking. I am pleased to see Graham
andKaty working so effectively
togetherin their new roles.
10 Softcat plc Annual Report and Accounts 2024
Chairman’s statement continued
Board changes continued
Vin Murria is our longest serving
Non-Executive Director, having joined
Softcat in 2015 when Softcat listed on the
London Stock Exchange. Non-Executive
Directors are appointed for an initial
three-year term, extendable by a further
two additional three-year terms, making
a total of nine years. Having served nine
years, Vin has conﬁrmed that she will
notstand for reappointment at the
Company’s AGM on 9 December 2024,
at which point she will leave the Board.
On behalf of the Board, I would like to
take the opportunity to thank Vin for
herinvaluable contributions, energy,
passion and counsel over the years.
Wewill miss Vin and wish her all the very
best. Given that we have a broad range
of skills and good levels of bandwidth in
those that remain on the Board, we have
decided not to replace her at this point.
As Vin steps down from the Board,
Robyn Perriss will assume the Chair
oftheSustainability Committee and
Lynne Weedall will become our
Designated Non-Executive Director
forWorkforceEngagement.
As a reminder, I was appointed as
Softcat’s Non-Executive Chairman in
August 2023 after having served as
Softcat’s CEO for ﬁve years. The Board
isaware and has acknowledged that
theappointment of the CEO into the
roleofthe Chairman is not in line with
the recommendations of the UK Corporate
Governance Code. The rationale for my
appointment is provided in further detail
in the Governance Report on page 92.
Ifully transitioned away from executive
duties on 1 August 2023 and Graham
Charlton as CEO has since been fully in
charge of the business. Graham, Iand
the Board have a very clear understanding
of the separate and distinct duties of the
Non-Executive Chairman and of the CEO
and this is being fully observed.
In August 2024, I took on an additional
non-executive chair responsibility at
Inﬁnigate – a privately owned security IT
distributor. It is an opportunity to further
hone my chairing skills and bring value
to both Inﬁnigate and Softcat as I will
beexposed to an expanded view of the
ITchannel.
I am very pleased with the composition
of the Board following the recent
changesand on how well our most
recently appointed Directors have
settled in. Wehave developed a
goodrhythm andcadence of working
together. I am pleased that we had and
continue to have a robust succession
planning process which we were able
tolean on and execute when we needed.
We have built a strong skill set on the
Board that provides a strong governance
and compliance framework as well
asstrategic oversight, constructive
challenge, advice and support.
Board effectiveness
A recent internal Board evaluation
(seepages 100 and 101) concluded that
your Board remains highly effective and
committed. I am pleased with the way
the Board operates and how the changes
have bedded in. We are always looking
for ways to improve and do better and
the evaluation identiﬁed some minor
points for improvement which we will
progress during the coming year. During
my ﬁrst year as Chairman, I discussed
with the Board the way we work together
and, as a result, we agreed some
modiﬁcations which we have found to
bevery useful. We have created space
for NED-only discussion and dedicated
more time to the Committee meetings
and the main Board sessions too. These,
and other progressive steps we have
taken, are described in the Governance
Report onpages 98 and 99.
Stakeholders
During the year, the Board continued
itsinteraction with some of our most
important stakeholders. This included
highly interactive engagements with
some of our customers, vendors and
employees. These were very useful for
the Board to gain further insights from
the perspectives of our stakeholders.
Regular updates and discussions were
held during the year on employee
engagement, employee capability,
ourculture and on customer satisfaction.
The Board, through the Sustainability
Committee, continued to monitor
progress on our environmental initiatives,
which continue to mature. Weare
making steady advances in all of these
areas, which are described in more
detail throughout the Annual Report.
At the end of the 2024 ﬁnancial year,
36%of our employees were women and
17% from an ethnic background. In the
leadership layers, 40% of the Senior
Leadership Team were women and 62.5%
of the Board were women. Wehave a
range of initiatives at Softcat which reﬂect
our commitment to make Softcat an
increasingly diverse and inclusive place to
work. I would like to thank our employees
for their continued efforts. We still have
more to do to improve on some of our
diversity metrics, particularly in the
leadership layers, and both the Board
andmanagement remain fully committed
to this long-term endeavour.
The Board regularly reviews employee
engagement and customer satisfaction.
We recently completed our annual
customer engagement survey and can
happily report that our net promoter
score (‘NPS’) increased to 63, which is
market leading. Our current employee
NPS of 59 is excellent and also market
leading. I would like to thank our
leadership team for again achieving
suchhigh levels of satisfaction.
This year the Board agreed to change
the way our Non-Executive Directors
engage directly with our employees.
Each Non-Executive Director engaged
with at least one nominated ofﬁce to
listen to their views on the Group. With
our open culture we found this programme
of engagements to be highly informative
and to gain further insights of local and
Group-wide matters. This complements
well the existing extensive engagement
betweenthe Executive Directors and our
employees. The engagement programme
isexplained further on pages 50 and 51.
11Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
The views of our shareholders continue
to be very important. During the year,
Icontinued our long-standing programme
of contact between the Chairman
andour largest shareholders. This
programme does not cover operational
business matters but focuses on Board
matters, governance and stewardship.
The programme was particularly valuable
forme during my ﬁrst year as Chairman.
Our shareholders remain overwhelmingly
supportive of our governance arrangements.
Softcat continues to work on reducing
itsenvironmental impact. We have made
progress on operational matters, such
ascompleting the installation of solar
panels at our head ofﬁces in Marlow.
Thesolar panels are now fully operational
and are making a signiﬁcant contribution
to the ofﬁce’s energy usage. We plan to
relocate our London and Birmingham
ofﬁces in 2025 and will take the
opportunity to make our new ofﬁces
more sustainable than the legacy ofﬁces.
We continue to work with our industry
partners towards our longer-term goal
ofbeing net zero by 2040. We have also
put more resources into helping our
customers make more sustainable
purchase decisions. More on this can
befound in our Sustainability Report
onpages 60 to 82.
59
employee net promoter score
Capital allocation
anddividend
The Board reviews Softcat’s capital
allocation framework (see page 102) and
our dividend policy regularly and both
remain unchanged. Our dividend policy
is a progressive one which targets an
annual (interim and ﬁnal) dividend of
between 40% and 50% of the Group’s
proﬁts after tax in each ﬁnancial year
before any exceptional items. Subject
toany cash requirements for ongoing
investment, the Board will prioritise
returning excess cash to shareholders
over time. We recommend a ﬁnal
dividend of 18.1p per ordinary share,
taking the total dividend to 26.6p per
ordinary share.
In addition, we recommend a special
dividend of 20.9p per ordinary share
ispaid at the same time as the ﬁnal
dividend. Further details on our dividend
and distributions policy can be found
onpages 102 and 103.
Shareholders will be asked to approve
the ﬁnal and special dividends at the
AGM on 9 December 2024.
Looking ahead
I am optimistic about our opportunity
forfurther growth and success at
Softcat. We operate in an industry
thatserves customers who consume IT
infrastructure and we deliver solutions
that address their needs. The market
islikely to grow again next year and
withour relatively low market share
penetration, there are plenty of
opportunities to help our customers
more and increase our share of wallet.
How we serve our larger customers in
the corporate and public sector space
and how we deliver to their international
requirements are two areas of future
focus. We will never stop on our relentless
journey to provide customer service at
levels above anyone else and success
here is dependent on prioritising our
employee engagement and motivation
through all the work we do to promote
our culture. TheGroup continues to
perform very well in these areas and our
market-leading net promoter scores tell
us that we are well regarded and that
wehave highly engaged employees and
very satisﬁed customers. We continue
tobe successful in our simple strategy
toacquire more customers and to sell
more to existing customers. Our purpose
‘tohelp customers use technology to
succeed, by putting our employees ﬁrst’
continues to guide us in our actions and
decisions. This puts us in a great position
to take advantage of the opportunities
availableto us.
I would like to thank everyone for making
me feel welcome over the last year in
mynew role and for all their engagement
and wise words. I have learned a lot.
Ienjoy the role and look forward to
developing further in this coming year.
I would like to thank the rest of the
Boardfor their fabulous support and
contributions, Graham for his fantastic
leadership and a huge thank you to the
entire team throughout the organisation
for making Softcat such a great place to
work. Thank you also to our customers,
vendors, suppliers and partners without
whom we couldn’t add the value that
wedo.
Our Annual General Meeting will be held
on 9 December 2024 and I look forward
to meeting any shareholders who wish
toattend.
Graeme Watt
Non-Executive Chairman
23 October 2024
12 Softcat plc Annual Report and Accounts 2024
Group Q&A
Leading the
evolution
Q
What are your personal
highlights from the ﬁrst year
inyour respective new roles?
GW I’m delighted with the way
Graham, Katy and I have settled
into our new roles and how we’ve
executed on the transition plan
that we announced two years ago.
It has also been very rewarding
seeing the changes to the Board
come together so well and the
effectiveness of the Board continue
to strengthen through its revised
composition and some minor
tweaks to our Board processes.
The performance of the leadership
team and our entire Group has been
outstanding, especially in the face
of a challenging macro-economic
environment. As a result, we’ve
learnt a lot about ourselves and our
ability to succeed, underpinned
by the strength of our culture.
Our approach has always been
to put people ﬁrst and, under
Graham’s leadership, the success
of this approach continues and is
evidenced by the excellent rankings
in four categories of the latest
‘GreatPlaces to Work’ awards.
GC My transition into the CEO role
has been smooth and I am really
enjoying the fresh perspectives
and challenges it has brought.
Most importantly, Softcat has
continued to perform well. Our
resilient business model, supported
by the breadth and depth of our
customer offering, together with our
consistent strategic execution, has
resulted in another year of strong
growth. This is only possible thanks
to the incredibly hard work of all our
teams, their positive attitude and
relentless drive to serve the needs
ofour customers.
KM It is really great to see the progress
we have made during the last twelve
months, again delivering double-
digit gross proﬁt growth and high
single-digit operating proﬁt growth.
This is a standout performance in
the context of the wider market and
reﬂects all the attributes that make
Softcat such a fantastic business.
I feel like I’ve been able to make
a real difference since I joined,
bringing external perspective to
blend with the fantastic knowledge
of the existing team, helping evolve
our strategy and shape where we
invest, while making sure we don’t
lose focus on the things that have
made Softcat so successful to
date. The other highlight for me is
Softcat’s culture, I’ve really enjoyed
becoming part of the Softcat team.
In conversation with Graeme Watt (Non-Executive Chairman),
GrahamCharlton (CEO) and KatyMecklenburgh (CFO).
Graeme, Graham and Katy reﬂect on their achievements during the last twelvemonthsanddiscusstheir priorities for the year ah ead.
Top: Graeme Watt
Non-Executive Chairman
Middle: Graham Charlton
Chief Executive
Bottom: Katy Mecklenburgh
Chief Financial Ofﬁcer
13Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Q
Given the changes in the
composition of the Board this
year, could you describe the
impact on its collective range
ofskills and experience?
GW We welcomed two new
independent Non-Executive
Directors during FY2024, with
the appointments of Mayank
Prakash and Jacqui Ferguson to
the Board. They are both great
additions and I’m delighted with
the early contributions they’ve
been able to make. Mayank is a
highly experienced senior executive
across the areas of operations,
technology and digital information
and transformations. Jacqui offers
a wealth of knowledge in the
large-scale, growth-oriented
business-to-business technology
environment and has signiﬁcant
experience in listed company
non-executive roles and extensive
familiarity with Softcat’s business
ecosystem. We very much appreciate
the experience and perspective
they bring to the Board which
are making a real difference,
particularly as we further articulate
our strategy and customer
propositions and invest in more
modern systems.
The Board evaluation undertaken
during the year tells us that the
Board is in good shape and works
well together and we have a broad
range of skills that match our
business and governance needs.
There are some minor areas we
haveidentiﬁed where we can
improve, which we will progress
in FY2025. We are sorry to see
VinMurria leave after nine years
ofamazing contribution to Softcat.
We will keepin touch and we wish
her all the very best inthe future.
Q
What progress is Softcat
making in respect of its
sustainability strategy?
KM As the Executive Director with lead
responsibility for the delivery of
Softcat’s sustainability agenda,
I’m proud of the progress we’ve
made this year. We are absolutely
committed to reducing our carbon
emissions, having already reached
an important milestone of achieving
100% renewable energy across all
our ofﬁces. We have completed
our solar panel installation project
at our head ofﬁce and the panels
are now producing a substantial
amount of the energy used at the
ofﬁce. Wealso planned and hosted
our ﬁrst carbon neutral, Group-wide
Kick Off employee event for FY2025.
We have increased the engagement
with our partners and assigned new
dedicated resources to help our
customers on their sustainability
journey. Our achievements and
progress have received external
recognition, with Softcat named as
one of Europe’s Climate Leaders
for 2024 by the Financial Times and
as Sustainability Partner of the Year
atthe Tech Excellence awards.
My focus is on ensuring that we
make the right investments as a
business, with the ﬁrst priority
to ensure we are best placed for
continuing our growth trajectory.
This includes investing in additional
headcount, both to increase sales
capacity but also to grow our
technology proposition in the
systems and supporting processes
that enable us to continue to
scale and operate effectively.
Theinvestment we are planning
to make in replacing our sales
system is just one example of this
type ofinvestment and will help us
evolve our business and improve
employee and customer experience
as we continue to grow.
Setting us up for success in FY2025
and beyond is a key priority for me.
Our impressive results year after
year are only possible thanks to the
longer-term thinking and strategic
planning that we undertake.
Regardless of the macroeconomic
environment, we make investment
decisions that support future
growth and enable us to outperform
the competition.
The performance of the leadership team
andourentire Group has been outstanding,
especially in the face ofa challenging
macro-economic environment.
Graeme Watt
Non-Executive Chairman
14 Softcat plc Annual Report and Accounts 2024
Q
What are your customers
focusing on and how does
Softcat continue to address
their needs?
GC At Softcat, we are dedicated to
customer excellence and one of
the many ways we achieve this
is by staying close to customers,
understanding their individual
needs and customising our offer
to them. The pace of change in
IT infrastructure, together with
an ever-expanding choice and
increased complexity, makes it
clear how much of a competitive
advantage Softcat has, when
considering the breadth of
ourportfolio.
In terms of the speciﬁc areas that
our customers are focused on, our
most recent customer experience
survey highlighted cyber security,
AI and automation as their key IT
priorities. The results of our extensive
customer survey once again show
our customers are delighted with the
service and solutions we provide.
Industry-leading metrics of 98%
customer satisfaction and a net
promoter score of 63highlight the
unwavering dedication of employees
to our customers and that Softcat
remainsa partner of choice.
Our evolving technology proposition
is designed around the priorities
of our customers. We think about
this proposition in terms of ﬁve
technology towers – workspace,
hybrid platforms, cyber security,
networking and connectivity
and data automation and AI.
By structuring our offerings
in this way, we will continue to
be best positioned to deliver
the solutions and services that
customers value, supporting
furthersustainable growth.
Q
‘Evolution’ is the theme of
thisyear’s Annual Report – can
you talk about how Softcat’s
strategy is evolving and why
thisis important?
GC The industry in which we operate
is increasing in complexity and
there is growing demand from
our customers for the advice and
solutions we offer, to help them
modernise on their IT infrastructure.
Our word of the year ‘Evolution’
encapsulates our approach to
support them on this journey by
embracing the innovative solutions
and services that are driving our
industry forward.
Put simply, our technology
proposition is evolving to enable
us to better meet the needs of our
customers and to remain relevant
to them. While our people and
our culture underpin everything
we do at Softcat, the breadth and
depth of our technology offering,
as well as the ease of doing
business with us, is increasingly
important. Bycontinuing to invest
to transform our own operations,
we can achieve our goals of
acquiring new customers and
selling more to existing customers.
All of these changes will create a
customer proposition that is able
to embrace the opportunities
offered by automation and AI,
enabled bythe use of data and
deployed in a workspace suitable
for the hybrid working world. In
this way, we can add more value to
customers, improve our service and,
further strengthen our competitive
advantage. Over time, our improved
systems and processes will enable
us to fully harness the data ﬂowing
around our business, to inform
better decision making and leverage
the beneﬁts of our broad view of
the market.
KM My focus is on ensuring that
we make the right investments
as a business, to equip our
internal teams with the tools and
capabilities they need to maintain
good governance, controls, and
relevance with customers and
our vendor partners. It is vital that
we invest in areas that will drive
future gross proﬁt growth, whether
that is directly in our technology
proposition or, less directly, in the
systems and supporting processes
that enable us to continue to
scale and operate effectively. The
investment we are planning to make
in replacing our sales system is just
one example of how we can evolve
our business to put in place the
foundations to improve employee
and customer experience,
supporting our growth ambition.
Group Q&A continued
100%
renewable energy across our ofﬁces
98%
customer satisfaction score
15Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Q
Can you outline your
prioritiesfor the year ahead?
GW We have deliberately spent a lot
of time over the past year further
articulating our strategic objectives
and making sure the business is ﬁt
for the future. While our strategy
will continue to evolve, the focus for
the coming year is on the execution
of that strategy and continuing
to outperform the market and
our peers.
GC We must continue to prioritise
the positive attitudes and
customer dedication that make
the Softcat culture so unique and
which underpin our competitive
advantage. We have an incredible
opportunity to build on current
momentum in the business and
strengthen our leading position
in the UK market, at a time of
rapid change in the industry.
The evolution of our technology
proposition and services offering
will ensure that we maintain
relevance with customers, and
I am excited by the enormous
opportunity for us to drive
signiﬁcant growth from here.
KM Setting us up for success in FY2025
and beyond is a key priority for
me. Our impressive results year
after year are only possible thanks
to the longer-term thinking and
diligent strategic planning that
we undertake. Regardless of the
macro-economic environment, we
make investment decisions that
support future growth and enable
us to outperform thecompetition.
16 Softcat plc Annual Report and Accounts 2024
I’m delighted to report another
record year for Softcat, delivering
strong growth ahead of market
expectations despite challenging
market conditions. These results
are testament to the power of our
culture and our continued ability
to deliver high quality value
to customers just when, more
than ever, they need our help
tonavigate the increasing pace
of technological change.
During the year we made further
progress against our two key strategic
goals: expanding our position with
existing customers whilst also adding
toour customer base. We also
continuedto evolve our technology
andservice proposition, reframing and
strengthening our offer to enable further
strategic progress in the years to come.
The investment we have made in our
team, growing headcount by more than
30% over the past two years, puts us in
an incredibly strong position for when
economic conditions improve. We have
the capacity and skills to be the best
possible partner for our ten thousand
customers as they continue to transform
their technology in the years ahead.
The Group’s ﬁnancial position is as
strong as ever, with cash generation
continuing to support our progressive
ordinary dividend and once again also
enabling the recommendation of a
special dividend.
As always, I’d like to give a heartfelt
thank you to the Softcat team for their
outstanding attitude and dedication
toeach other, our customers and our
partners during the past year. Their
spiritand ability create an unbeatable
foundation upon which we will continue
to build as we drive towards our full
potential in the years ahead.
A year of strong performance
andproﬁtable organic growth
We have the capacity and skills to be
thebest possible partner for our ten
thousand customers as they continue
totransform their technology in the
yearsahead.
Graham Charlton
Chief Executive Ofﬁcer
Chief Executive Ofﬁcer’s review
Our strategy
Read more about our strategy onpages 30 to 35
Our business model
Read more about our business model onpages
22 and 23
Our market and offering
Read more about our market and offering
onpages 24 to 29
17Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Performance and
marketconditions
We are pleased to report another
strongyear of growth that was ahead
ofmarket expectations in a challenging
macroeconomic environment.
Thiscontinues our unbroken record
ofdouble-digit gross proﬁt growth
stretching back almost 20 years,
demonstrating the sustainability of our
model and consistency in execution.
During the year we made further
progress against our two key strategic
goals: winning new customers, up 1.8%
year on year, and selling more to existing
customers, delivering an increase of
9.7% in gross proﬁt (‘GP’) per customer.
Looking closer at the performance of the
customer base, it was encouraging to
see how we continue to strengthen our
relationships with existing customers.
For example, the number of customers
generating over £1k of gross proﬁt in the
year grew 5.1% from 7.5k to 7.9k and the
average GP delivered from each of those
customers expanded by 6.3% from
£49.6k to £52.7k.
This progress comes despite general
weakness in UK economic conditions,
which had a dampening effect on
customer demand throughout the year,
resulting in longer sales cycles and
deferred spending. We observed
customers prioritising cost optimisation
and sweating existing assets ahead
ofcommitting to major new projects
andwhile, for example, sales of client
devicesdelivered growth for the year,
this was an area of our industry that
wasespecially impacted.
Notwithstanding these challenges,
ourcontinued growth highlights the
resilience of our business model
supported by our diverse product
offering and customer base, and our
ongoing ability to gain market share.
Weestimate that our share of the UK
andIrish markets remains in the region
of 5% While external conditions can
havean impact on trading from period to
period, we see signiﬁcant opportunities
for growth in the years ahead.
Market trends
There are many technology-related
factors that contribute to our optimism,
including the increasing impact of AI,
and the more positive outlook for
economic growth, together with
reducing inﬂation and interest rates.
There is widespread anticipation of a
device refresh cycle, expected to gain
momentum into calendar year 2025.
Inaddition, there is the ongoing
impetuscreated by the continuing
evolution ofthe AI opportunity.
Wecontinue to seecustomers engage
with and adopt Microsoft Copilot as well
as the AIenhancements being built into
otherSaaS solutions. On top of that,
organisations are beginning to move
ahead with bespoke and internally
developed AI tools and solutions, which
in turn creates demand for datacentre
evolution and expansion, whether on
premise or in the cloud.
This new generation of applications
aremore dependent than ever on
information-rich and well-organised data
sets, but also increase the attack surface
and potential for harm if compromised.
This in turn leads to an increasing array
ofever more sophisticated cyber threats,
ensuring that security also remains a top
priority for our customers. Against this
backdrop, we continue to invest at pace
in relevant capabilities through internal
training, expanding our advisory teams
and staying in-step with our vendor
partners as they continue to bring
innovations to their product portfolios
and remaining close to our customers’
needs and enquiries.
Such innovations place ever greater
demand on the foundational layers of
ITinfrastructure, reinforcing existing
megatrends in compute and storage to
ensure the right workloads are hosted
inthe right place, and data is secure at
all stages of processing. The unrivalled
breadth and depth of our technology
proposition means we are very well
placed to help customers navigate these
complexities, adding value to CIO and
ITmanager decision-making processes.
Ease of doing business
and maintainingrelevance
Average headcount increased during
theyear by 14.3%, as we invest for future
growth and build on the very strong
investment in our teams over recent
years. Growth was delivered across all
departments but with a bias towards our
technical and support functions as we
continue to scale our ability to go deeper
into existing customer relationships. This
reﬂects that, for the vast majority of our
customer base, we have huge opportunity
to gain a larger share of their spend.
We have also been investing in
productivity enhancing tools and
processes. We have, for example,
implemented Microsoft Copilot
licencesfor around two thirds of our
staff, including all of our salespeople,
bringing the added beneﬁt of being
better able to support our customers
with their AI projects. The roll out of
Microsoft Copilot to all remaining staff
will be completed in the year ahead.
18 Softcat plc Annual Report and Accounts 2024
Ease of doing business
and maintainingrelevance
continued
Alongside this, our digital strategy
continues to gather pace with the
appointment of a new Head of Digital
aswe seek to consolidate the number of
systems and platforms both employees
and customers interact with. As part
ofthis, we are centralising our content
management and market data tools,
paving the way for AI functionality. This
has the potential to better and more
intuitively equip our account managers
with the tools they need to address
customer needs at the right time, as well
as more efﬁciently match our expertise
and solutions to our customers’ problems.
We have also kicked off a project to
replace our sales system over the coming
years and put in place the foundations for
continuous evolution of our capabilities
and employee experience.
Our multinational business has continued
to grow too, via our network of branches
in Europe, APAC and an ofﬁce in Virginia,
USA. Rising demand from our customers
to serve their operations beyond the UK
and Ireland will drive further expansion
of our international footprint in the
yearahead.
We continue to embrace and lead the
market in adoption of new consumption
models and routes to market, with
investment in vendor marketplace
offerings and a rise in as-a-service
consumption models for both software
and hardware. Our word of the year,
“Evolution,” encapsulates our approach
to maintaining relevance ina dynamic
and disrupted industry, making good
useof our capacity to invest in change
compared toour competitors.
Feedback from customers strongly
supports our desire to remain their clear
partner of choice, with our latest survey
showing 98% customer satisfaction
(FY2023: 97%) and a net promoter score
of 63 (FY2023: 62) which all our staff
should be proud of.
People and culture
Whilst we continue to make huge
investments in the evolution of our
customer proposition, the core of our
strategy and competitive advantage will
always be ﬁrmly rooted in our culture
and the very strong customer service
this delivers. Softcat was created to be a
special place to work, and we obsessively
monitor the results of our efforts to
remain so. This year we have updated
our learning and development platform,
broadened our ﬂexible working policy
and enacted a number of developments
to help teams work more closely together.
It has been very pleasing to receive
recognition for these efforts from our
people, and also by winning the award for
the ‘BestOverall UK Workplace in Tech’
by The Great Places to Work Institute in
the Super Large category. We were also
absolutely thrilled to be named the
UK’s‘Best Workplace for Women’ ,
‘BestWorkplace for Development’ and
ﬁfth ‘Best UK Workplace’ in the Super
Large category.
Our internal Communities play an integral
and increasing role in promoting and
protecting an inclusive and supportive
environment. A packed calendar of
events across our network of ofﬁces
helps make them a vibrant place to work,
whilst charity days and fundraising are an
important part of our social engagement.
This year, for the ﬁrst time, we were
pleased to bring our Community Leaders
together for an event in partnership
withvendors and distributors, sharing
knowledge and experiences and
celebrating the contribution they
maketo Softcat and society.
Our 11th charity ball in May 2024 was
ahuge success, bringing together
over900 guests from Softcat and our
partners to raise over £400k for charity.
Other events during the year helped
bring our total charitable donations
toover £540k.
We also recently held our largest ever
annual Kick Off event at the NEC in
Birmingham with 2,200 Softcat staff
inattendance, an event which remains
the highlight of our calendar.
Our growth has meant that we are
reaching capacity in our London and
Birmingham ofﬁces, and so we will
relocate these teams to improved
premises during the new ﬁnancial year.
These moves are part of a rolling 5-year
strategy to ensure we have the right
environments for hybrid working as we
continue to scale across all our regions.
Strategy evolution
Our strategic growth goals remain clear:
to deepen our relationship with existing
customers whilst also adding to the
customer base. During the past ﬁnancial
year we have looked closely at the trends
and opportunities driving our industry
forward to ensure we remain best placed
to deliver against these goals – not just
next year but for the years ahead. As a
result, we have implemented an enhanced
strategic framework to ensure we create
a customer proposition ﬁt for the age
ofdata and AI and to ensure we can
continue to operate effectively and
efﬁciently as we continue to scale.
Our technology proposition is a
keystone to this, and we have deﬁned a
new structure within which to frame our
offering. This will allow our customers to
interact with us in a way that is intuitive
and easy for them to do business with,
whilst also improving our collaboration
with vendor partners. In addition, we can
more clearly deﬁne the direction for the
further development of our services
portfolio to augment and complement
the in-house capabilities of our
customers in the areas of technology
that matter most to them.
These customer- and vendor-facing
developments will be underpinned by
further investment in our own data and
digital strategies. We have ambitious
plans to modernise our own operations,
increasing our digital footprint and
ability to drive insight from our uniquely
broad view of the market. This will
beneﬁt the user experience internally in
Softcat as well as within our customers,
and increase our relevance to both
customers and vendors by bringing
together the right people, to have the
right conversations, at the right time,
more often.
The developments we are planning
forma strategic roadmap for Softcat
inthe years ahead, all of which can be
pursued through organic investment.
We also have and will explore the
optionto accelerate some of these
enhancements through acquisition
and/or strategic partnership.
Chief Executive Ofﬁcer’s review continued
19Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Sustainability
We remain committed to making
progress against our stated goals to
reach net zero emissions by 2040, taking
purposeful steps to minimise our impact
on the environment and build momentum
in the wider industry to do the same. It is
part of our integrated approach to ESG
(Environmental, Social and Governance)
and we continue to move forward on
thisjourney with close alignment and
collaboration with key partners and
supporting our customers with
sustainable solutions and services.
This year we launched a fully carbon
neutral managed support service in
partnership with Cisco, one of the ﬁrst
inour industry. We’ve also received
recognition in the period from valued
partners including Lenovo and HP, and
we were named Sustainability Partner of
the Year at the Tech Excellence Awards.
We continue to take meaningful steps
onour sustainability journey within our
business, recruiting into our sustainability
team and rolling out expanded training
toall staff. We worked hard to make our
annual Kick Off event carbon neutral and
it was pleasing to see the impact of the
recent project to install solar panels at
our Marlow ofﬁce which now provide up
to 80% of the annual power requirements
at that site, whilst the rest of our ofﬁce
network is powered by 100%
renewableelectricity.
Investment in sales system
During FY2025 we are commencing
work on a replacement sales system.
Due to the accounting standard
requirements regarding the capitalisation
of SaaS based solutions, we will not
know whether the cost for building this
system will be capitalised or treated as
operating expenditure until we have
selected the vendor and ﬁnalised the
contract details. Due to the materiality
and non-trading nature of the cost, if
thesolution cannot be capitalised, we
intend to treat it as an adjusting item
tooperating proﬁt.
Board changes
Vin Murria is Softcat’s longest serving
Non-Executive Director, having joined
Softcat in 2015 when Softcat listed on the
London Stock Exchange. Non-Executive
Directors are appointed for an initial
three-year term, extendable by a further
two additional three-year terms, making
a total of nine years. Having served nine
years, Vin has conﬁrmed that she will not
stand for re-appointment at the Group’s
Annual General Meeting to be held on
9December 2024, at which point she
willleave the Board. Graeme Watt,
Non-Executive Chairman commented
“On behalf of the Board, Iwould like to
take the opportunity tothank Vin for her
invaluable contributions, energy, passion
and counsel over the years. We will miss
Vinand wish her all the very best.”
Vin Murria is currently the Chair of the
Sustainability Committee and the
designated Non-Executive Director for
Workforce Engagement. With effect
from 9 December 2024, Non-Executive
Director Robyn Perriss will assume the
Chair of the Sustainability Committee
and Non-Executive Director Lynne
Weedall will become the designated
Non-Executive Director for
WorkforceEngagement.
Outlook
Softcat operates in a signiﬁcant and
growing market, and we continue to
invest to capitalise on this exciting
growth potential. As we drive further
market share gains, we expect to deliver
another year of double-digit gross proﬁt
growth together with high single-digit
operating proﬁt growth in FY2025.
Graham Charlton
Chief Executive Ofﬁcer
23 October 2024
20 Softcat plc Annual Report and Accounts 2024
Evolving technology
‘Evolution’ as our word of the
year also encapsulates an
increased focus on changes
in the technology landscape
which are shaping how we work
at Softcat and the needs of our
customers. We embrace these
changes, which drive key aspects
of our strategy, including:
acquire more customers;
sell more to existing customers;
ease of doing business; and
maintain relevance and expand
our addressable market.
Helping our
customersevolve
The future opportunity in our industry
remains incredibly exciting. Evolutions
inartiﬁcial intelligence (‘AI’), data
management and cyber security,
amongst other technologies, continue to
drive rapid transformation in technology
and this will generate growth across all
areas from the cloud and datacentre to
the edge. These incremental tailwinds to
an already growing market play perfectly
into our comprehensive offering at a
time when customers need broader
andmore integrated support from their
partners than ever before. This is a great
opportunity for us to further increase
ourmarket share and make ourselves
anindispensable partner of choice.
The ever-expanding use of AI is increasing
in relevance to our customers and they are
very interested in generative AI (‘Gen-AI’).
We are already seeing great customer
engagement and our most recent
customer experience survey showed
AIand automation were two of the top
three of our customers’ technology
priorities. We offer advice and support
to our customers and prospective
customers via workshops, webinars,
podcasts and one-to-one meetings.
Theseinteractions keep us well placed to
help our customers assess their readiness
for adoption, as use cases and products
start to come to market. In many situations,
customers are discovering through their
interactions with us that they ﬁrst needto
make improvements totheir foundational
data governance and management for
Gen-AI, as more andmore use cases
areestablished.
While it is still very early days, we
arealready beginning to see the
all-encompassing impact the broader
AIopportunity will have across both
infrastructure and applications. We
believe the early-stage adoption of tools
such as Microsoft Copilot will increase
steadily over the medium term. However,
Gen-AI and large language models are
just one aspect of AI that we expect will
drive both volume and innovation in IT
over the long term.
Softcat is a market leader for Microsoft
inthe UK and we are leading the way on
the Microsoft Copilot opportunity. Our
teams are expertly equipped to advise
and sell Copilot as part of the wider
Microsoft portfolio to millions of licence
holders. Many of our customers tell us
that they are exploring the potential
anduse cases of the many branches
ofAI,which we think will lead to more
customer adoption of AI technology.
Thebroad AI opportunity is exciting, as
bothvendors and customers look at the
datacentre, end user devices and other
parts of infrastructure and evaluate how
these will impact in the years ahead. We
believe our ability to support customers in
thinking about how all these requirements
come together will remain a key advantage
for many years to come. We are developing
our technology propositions, preparing
for the potential opportunities presented
by AI and AI-readiness. As more uses of
AI expand and customer adoption rates
increase, we will work even closer with
our vendors and play an integral part
inour customers’ journey.
Education
• Webinars
• Workshops
• 1:1 customer meetings
For our
customers
For Softcat
Opportunity
identiﬁcation
andresponse
Readiness
• Data governance security
• Datacentre infrastructure
• Change management
Tender and bid
generation
Implementation
• Client devices
• Datacentre
transformation
• Microsoft Copilot
• AI application innovation
Proposition
navigation
andresource
management
Responding to changes
inthetechnology landscape
The AI opportunity
21Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Softcat’s evolution
through technology
Within Softcat, we continue to invest
inevolving technology. This has
wide-ranging beneﬁts, particularly for
employee productivity and engagement
and forour strategic underpin of ease
ofdoing business.
We are investing in our own data strategy,
recognising the intrinsic importance of
effective data collection, management
and governance in an efﬁcient, modern
operating model and the exciting
potential to accelerate growth through
automation and analytics. We are making
good progress with our external partner
towards a uniﬁed data analytics platform
that will capture and cleanse internal
andexternal data streams into a single,
well-structured and secure platform.
Theﬁrst iteration of this is live in a proof
of concept with a small subset of data
and users and is providing us valuable
insights to improve future iterations. As
we progress through the rest of FY2025,
we will see further progress that lays
thefoundations with the potential to
incorporate further AI techniques and
enhancements over time.
Building on this data platform, we are
also investing in analytics and reporting
tools as part of our digital strategy.
Existing internal tools and systems will
be consolidated over time into a single,
enhanced view of customer behaviour
that will improve insights for our
salespeople and drive innovation in our
technology offering. Similarly, the Board
has approved the required investment
for us to move towards a uniﬁed platform
for our customers to view and manage
the products and services they receive
from us, making us more responsive
andeasier to do business with. This
customer platform will accommodate
new distribution models, notably
marketplaces and ‘as-a-service’ software
and hardware propositions, providing
acomplete modern range of solutions.
For Softcat, evolution is a journey rather
than a destination and we will continue
to adapt and move onwards, just as we
have successfully done for over 30 years.
I think AI is going to have a very, very
foundational impact. Everything from power
density…datacentre design…the main compute
unit…the network, the memory architecture,
allof it. So, the corecomputer architecture
changes. Ithink every workload changes.
Satya Nadella
Microsoft CEO
January 2024
2,000
Microsoft Copilot licences are being
rolled out internally at Softcat, as we
modernise the way we work and use
technology to be more productive and
responsive to our employees’ feedback
22 Softcat plc Annual Report and Accounts 2024
Business model
Evolved for success
Our business model is resilient and has not changed in the last
year. Itis designed to drive value for our stakeholders. Our people
are bright, motivated, driven and enthusiastic and are trained
tomeet their customers’ needs. Most importantly, they care
aboutSoftcat and the customers it serves. Thisdrives the business
model to deliver long-term success.
What sets us apart
1
Our employees
3
Our customers
5
Our ﬁnancial strength
Our employees are the keystone of
ourcompetitive edge. Their passion,
intelligence, sense of fun and commitment
to the long-term success of our customers
are what really make us stand out from the
crowd. We support our employees to help
provide our customers with a broad range
of technology solutions.
Read more on pages 52 to 59
The longevity of our customer
relationships is a direct product of the
trust they place in our people and the
value we deliver from our technical
capabilities. During the past 19 years
ofconsecutive organic growth, the
number of customers and the average
GP per customers have both more
thantrebled.
Read more on pages 24 to 29
In a world of risk, leverage and market
uncertainties, we are proud to be a bit
different. We have never had any debt
and maintain a strong balance sheet,
providing strategic agility. We have
ahighly liquid business model which
cancomfortably fund both our priority
to invest for organic growth and a
progressive ordinary dividend policy.
Read more on pages 38 to 41
2
Our market opportunity
and offerings
4
Our vendor partnerships
Despite 19 years of organic growth
inproﬁt and gross invoiced income, a
shareof around 5% of our addressable
marketaffords us potential for further
growth.Our success continues to fuel
reinvestment into our technical capabilities,
which we add to relentlessly year after
year. As a result, we have one of the
broadest and deepest technical
offerings in the market, positioning us
asthe partner of choice for even the
biggest and most complex solutions.
Wecontinuously evolve our offerings
and use of our channel to maintain
relevance to our customers and
expandour addressable market.
Read more on pages 24 to 29
Technology vendors face intense
competition and need partners that
canaccurately, reliably and credibly
represent their products and services to
tens of thousands of target organisations
in the UK and Ireland. In many cases, we
hold the highest levels of accreditation
with our major vendors, demonstrating
the trust those vendors have in us
whenwe implement solutions for our
customers. With our scale, expertise,
and highly valued accreditations, we
offer unrivalled access for both global
and local partners to UK and Irish
customers. This reach is being further
expanded through investment in our
multi-national branch network.
Read more on pages 28 and 29
23Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
How we deliver value
We recruit and train
great people with
high potential
We incentivise and
engage our people
toperform
We work with universities and schools
across the country and see thousands
ofcandidates each year before selecting
those that are right for Softcat. We look
for exceptional people with the right
attitude. We also have other recruitment
programmes which foster our culture
ofdiversity and inclusivity.
We create a great place to work where
people are motivated, recognised and
rewarded for success. We regularly
measure employee engagement and
take actions to make our employees feel
engaged and motivated. We are known
for our unique culture and it is without
doubt the basis of our success.
We deliver
outstanding
customer service
We maintain
relevance and
expand our
addressable market
Only great people who are highly
motivated and care about the business
they work for can provide truly outstanding
levels of customer service over the
longterm. We try to couple that with a
world-class set of technical capabilities and
believe the results speak for themselves.
We take a relentless approach to customer
satisfaction andact on customer feedback
to maintain exceptional customer service.
We continue to mature and evolve our
market approach and offering, making
sure we remain relevant to customer and
market needs. We have a strong track
record of developing new revenue streams
and are fast to move as the market evolves.
Despite our success to date, it’s hard to
foresee a time when there won’t still be
opportunity for growth.
We win new
customers and
sellmore to
existingcustomers
Winning a new customer is just the very
start of the journey; our real aim is to
nurture a relationship carefully over
many years. If we can prove our worth
bynever letting a customer down,
trustbuilds and everyone wins.
The value we create for our stakeholders
Customers
98%
customer satisfaction
Shareholders
19
years of consecutive
organic proﬁt growth
Employees
90%
employee engagement
Underpinned
byour values
Fun
Responsibility
Community
Intelligence
Passion
Read more on pages 52 to 59
24 Softcat plc Annual Report and Accounts 2024
Our market and offering
We provide the broadest range
of technology solutions and
services in a growing market
Our business is broad-based from both a technology and customer perspective,
providing us with the best opportunity to take advantage of an addressable
market which is expected to continue expanding.
Our simple strategy to acquire
more customers and sell more
to existing customers and our
investment in employees to
continue building customer
trust give us the conﬁdence that
Softcat has a long-term future
organic growth opportunity.
We are capitalising on our
opportunity by investing
signiﬁcantly in modern systems
and ways of working and
expanding our geographic
presence to serve customers
better and through ongoing
highly effective training and
development. Our sales teams
are supported by internal
specialists and technology
experts who make sure
as technology evolves we
continue to add to and update
our offerings to existing and
potential customers.
Room for growth in our
addressable market
Gartner (a leading research ﬁrm)
estimates that the non-consumer
UKITmarket is worth £171bn in 2024.
Company analysis of this and other
sources, such as the CRN Top VARs
report, suggests that our addressable
market in the UK and Ireland is worth
around £60bn. This gives us a market
share of around 5%, up from 3% in
2019.Our current customer base of
10,291 represents around 20% of the
addressable universe, with whom we
have an estimated average of 20% to
25% share of IT infrastructure spend.
Industry commentators predict more
market growth in the years ahead, with
Gartner forecasting that the non-consumer
UK IT market will grow to £243bn by
2028 – a four-year compound annual
growth rate (‘CAGR’) of 9.2%. The areas
addressable by us are forecast to grow
slightly faster with a four-year CAGR of
9.9%, taking our addressable market to
£86.7bn in2028.
A strong pipeline of
opportunities for Softcat
Our proven model of building customer
trust over the long term gives us the
conﬁdence that Softcat has a future
organic growth opportunity best
measured in decades rather than years.
To capitalise on this opportunity, we
continue to invest signiﬁcantly in new
resources to expand our geographic
presence and increase our capacity for
training and development, as well as
adding new specialist and technical skills
to the team. As technology evolves over
time, it is a strategic imperative that
wecontinue to add complementary
offerings to remain relevant to our
customers andpartners.
Our opportunity goes beyond the UK
and Ireland with many of our customers
asking for support for IT solutions and
services across their global operations.
We have branches in the Netherlands,
Hong Kong, Singapore and Australia to
enable us to support these customers
with their IT infrastructure needs,
wherever they are.
There has been particularly strong demand
for support in the US where we operate
ateam made up of long-term Softcat UK
employees and local employees. Our UK
and Irish customers who have a footprint
in the US are now being served through
our wholly owned subsidiary Softcat US
LLC. This allows usto better cater for
growth and customer service.
In the ongoing challenging macro-economic
environment, technology will be integral to
enabling businesses to regain, maintain or
improve their efﬁciency and proﬁtability.
Organisations across corporate and
public sectors will need to further adapt
their infrastructure models to deliver
enhanced employee and customer
experiences and drive productivity and
efﬁciency improvements whilst deriving
value from and protecting their data.
These drivers and trends play straight
into our diverse range of solutions
including managed, professional and
support services and cloud, datacentre,
infrastructure, security and digital
workspace solutions from hardware,
peripherals and software licensing.
25Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
How we’re evolving
andresponding
To meet the needs of organisations, we
have continued to invest heavily in our
tools and technical offering. In the face
ofeconomic uncertainty, we have taken
very deliberate steps to maintain our
investments to keep on taking advantage
of long-term expected growth. After
extensive review and collaboration, we
are evolving our customer propositions
to make sure they are relevant and ﬁt
forour customers in the future.
Hybrid platforms
Offering advice, design, managed
andsupport capabilities to modernise,
optimise and protect on-premises,
edgeand public cloud infrastructure.
Workspace
Designing and implementing the
solutions, products and services to
deliver an agile workspace environment
that enables productivity, creativity
andcollaboration.
Cyber security
Securing a digital future by guiding
customers through the assessment,
design, implementation and ongoing
operation of best practice cyber security.
Networking and connectivity
From on-premises to cloud and anywhere
in between, connecting anything to
everything in the customer’s digital
ecosystem with assessment, design,
implementation and managed services.
Data, AI and automation
Providing advice and guidance to unlock
data value, deliver AI innovation and
accelerate business efﬁciencies using
the latest technologies in an increasingly
fast data and AI landscape.
Addressable market 2021 to 2028 (£bn)
£90
£80
£70
£60
£50
£40
£30
£20
£10
£0
2021 2022 2023 2024 2025
Forecast
2026
Forecast
2027
Forecast
2028
Forecast
£49.2
£52.3
£54.7
£59.5
£65.7
£72.6
£79.3
£86.7
(Source: Gartner IT Spending Forecast, Q2 2024 Update and Softcat analysis)
IT spend outpaced real GDP growth
in19of the last 20 years.
IDC ‘State of the Market’, August 2024
With our focus ﬁrmly on the long-term opportunity, we have maintained high levels
ofinvestment in our capabilities across the business including sales, specialists,
support, technical and business operations. Our customers and partners can expect
more of the same from us in the years to come.
9.9% CAGR
26 Softcat plc Annual Report and Accounts 2024
Our market and offering continued
Growing our offering in an
expanding and evolving market
A structurally
growingmarket
Multiple structural drivers are growing
theIT market and Softcat is well placed
tocapitalise over the long term.
Technology trends continue to create new
opportunities to drive transformational
change, deliver operational efﬁciencies,
ensure resilience and compliance and
reduce costs. Businesses are also focusing
on interactions with their employees and
customers which need to be engaging,
seamless and secure. Investment in
technology is a tool for our customers to
achieve these goals. Organisations of all
sizes are recognising how technology can
enhance their competitive position and
improve their value proposition.
Global consultancy ﬁrm McKinsey has
found that ‘as much as 71% of the impact
from business transformations depends
on technology’. Leadership teams across
corporate and public sector organisations
recognise that IT is integral to protect
andenhance a competitive and effective
position. These competing demands to
deliver operational efﬁciency, reduce costs
and deploy technology that enhances
organisations’ commercial offering and
capabilities provide substantial challenges
to Chief Information Ofﬁcers (‘CIOs’)
andtheir IT departments. Also, whilst
macroeconomic conditions and sector
trends shape near-term demand trends,
IT spend is expected to continue to
outpace UK GDP growth over the
medium term.
Softcat has a proven track record of
leveraging deep expertise across a broad
technology offering to support customers
with all aspects of their IT needs. This,
combined with our outstanding customer
service, places Softcat in a unique position
to advise, architect, deliver and manage
across a CIO’s remit. Long-term, structural
shifts in technology include mature trends
in hybrid cloud adoption and XaaS that
continue at pace, in addition to emerging
themes that are gathering pace, such as
sustainable IT, Gen-AI and the requisite data
strategy and platform.
The rise in the use of AI has been particularly
prominent in recent years and we are
seeing AI integrating into the strategic
and operational plans of our customers.
Use cases continue to emerge and the
rate and scale of change are expected
toaccelerate in future. A recent survey of
UK CIOs by leading research ﬁrm Gartner
showed Gen-AI as the top technology to
be implemented. For organisations of all
sizes, in both public and private sectors,
we will be needed toadvise, architect and
deliver on the increased demands AI will
place on coreinfrastructure and on the
new AIenvironments.
Increasingly, the traditional boundaries of
ITare extending into multiple business lines
as technology is embedded more deeply
across business operations. AmyHood,
Microsoft CFO said, ‘spending maybe in
other areas that we don’t traditionally think
of as being in the IT budget spend under a
CIO. It’s spend being done by the Head of
Customer Service. It’s spend being done
bythe Head of Marketing. ‘IT and other
business leaders face a more complex IT
landscape in parallel with more numerous
and sophisticated cyber security threats.
Softcat’s breadth and depth of offering,
delivered with outstanding customer
service, places Softcat in a unique position
to advise, architect, deliver and manage
across a CIO’s expanding remit.
Our customers supported
by our employees
Our customers are supported by our
dedicated sales and support teams.
Weare committed to deepening
ourrelationships with our customers,
aiming to build long-lasting, valuable
and sustainable connections. Our sales
approach is in perfect harmony with
ouroverall strategy, targeting both
theacquisition of new customers and
increased sales to existing customers.
Itemphasises key features which
beneﬁtcustomers:
• fostering a high-performance
sales culture;
• simplifying the sales and customer
journey; and
• maturing our market approach
andofferings.
We train our account managers to build
trust through always following through
on our promises and taking responsibility
to deal with challenges and any problems.
As they identify new opportunities,
theycollaborate with vendors and our
technology experts to offer guidance,
design solutions, procurement advice,
orservices tailored to customers’ needs.
Over time, customers develop multiple
relationships within Softcat, spanning
several areas of IT infrastructure.
As much as 71% of the impact from business
transformations depends on technology.
McKinsey
April 2023
27Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Our annual customer experience survey
plays a crucial role in shaping our strategy.
It guides our continuous investment
inemployees and other resources
necessary to uphold and maintain
therelevance of our commitments to
customers. Over 80% ofour Softcat
team members engage directly with
customers in one manner oranother,
including account managers, sales
specialists, technical designers,
professional consultants, managed
services and our customer experience
team. Customer Success Managers
collaborate with service delivery teams
to ensure the seamless integration and
high-quality delivery of complex solutions.
More customers are also looking to
integrate sustainability into their IT
solutions, in an effort to reduce their
environmental footprint. We have a
growing sustainability team which works
closely with many parts of the business
and our vendors to consider these
needs. This includes the addition to
thesustainability team of a dedicated
Customer Success Manager who
supports the sales team in making
iteasier for our customers to make
moresustainable choices.
Spending maybe in other areas that we don’t traditionally
think of as being in the IT budget spend under a CIO.
It’sspend being done by the Head of Customer Service.
It’sspend being done by the Head of Marketing.
Amy Hood, Microsoft CFO
April 2024
We prioritise attracting, developing
andretaining top talent, increasing
ourexpertise to better understand the
environments and industries in which
our customers operate. This enables us
to collaborate across industries, share
best practices, and drive innovation to
provide the best possible customer
experience and address their challenges.
Additionally, we are committed to
placing the right people in key roles
andinvesting in their capabilities and
long-term growth. Our ongoing efforts
include programmes and initiatives on
diversity and inclusion — issues that are
important to our leadership, employees,
customers and partners.
Our technology offerings are evolving
tobe shaped around ﬁve pillars:
•cyber security;
• data, AI andautomation;
•workspace;
•hybrid platforms;
• networking and connectivity.
These are well aligned to the priorities
expressed by our customers and will
serve us well for the future.
Evolution insights
Our customers’ top ﬁve
technology priorities
1. Cyber security
2. AI
3. Automation
4. End user devices
andcomputing
5. IT service management
Our customers’ top
ﬁve strategic priorities
1. Cost control and budgeting
2. Technology sourcing
andprocurement
3. Governance, risk
andcompliance
4. Technology adoption
5. Technology awareness
andselection
(Source: Softcat 2024 customer
experiencesurvey)
28 Softcat plc Annual Report and Accounts 2024
Our market and offering continued
A strong position in the
UKtechnology sector
Softcat is at the core of the IT value chain
Softcat has a strong position in the UK technology sector. We are the UK’s largest value-added reseller (‘VAR’) and provide som e
ofthe broadest and deepest ranges of solutions and services to our customers. Our customer base includes corporate companies
of all sizes and also organisations in the public sector. Many businesses buy their technology solutions from VARs, rather than
from vendors direct and the value propositions for our vendors and customers are shown below. Our position in the IT value
chain, astructurally growing market, combined with our highly skilled and dedicated employees brings together thevital
ingredients for long-term growth and success.
Vendors
Enterprise
Customers
Direct
Small and
mediumbusiness
Distributors
Public sector
Value proposition to our vendor partners:
• Access to a broad customer base
• Cost-effective route to market
• Strong distribution and implementation capabilities
• Feedback mechanisms for vendor products and services
• Communicating value of innovations to customers
Value proposition for our customers
• A single IT infrastructure and services provider with a broad proposition base
• Comprehensive and ﬁrst-class customer service
• Independent view of the IT ecosystem
• Value-added services with integration capabilities
• Solutions across IT lifecycle
• Ongoing training and advice on new products
• Support and delivery of upgrades and renewals
• Monitoring and management of licensing/subscription agreements
• Customers often have limited in-house IT resources
29Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Partnering for success
We pride ourselves on partnering with over 400 of the largest and the best emerging technology partners, enabling us to deliver
the latest pioneering solutions to our customers. We work closely with these industry-leading vendors on a common goal to
deliver the best solution or service which meets the IT needs of our customers. By continuously listening to and asking questions
of our customers, we are able to evolve and improve our partner strategy.
Our vendors
Some of the awards we have won and some of our vendor accreditations
30 Softcat plc Annual Report and Accounts 2024
Strategy
Acquire more customers
• We are evolving our customer propositions
• Penetration of target market remains low
• Consistent year-on-year increases in customer base
• Continued investment and training in employees
• Longer tenure customers are more likely to transact
more with us
• Opportunities to increase customer share of wallet
• Consistent year-on-year increases in gross proﬁt
per customer
Sell more to existing customers
Making good progress
on our strategy
Successful execution of our simple but effective unchanged strategy
supports us as we continue to look to acquire new customers and gain
an ever greater share of wallet in existing customers.
Our strategy
People and
culture
Ease of doing
business
Maintaining
relevance
andexpanding our
addressable market
• Focus on preserving our culture
• High and consistent employee
engagement (FY2024: 90%
employee engagement and
employee NPS of 59)
• Progress on improving employee
diversity and inclusion
• Investment in new systems which
will modernise ways of working
and improve customer service
• Investment in resources to
support the sales function
• High and consistent customer
service (FY2024: 98% customer
satisfaction and customer
NPS of 63)
• Developing our technology
proposition, augmented by the
opportunity presented by AI
• Further investment in multi-
national with more customers
engaging with this offering
• Evolving our customer
sustainability propositions
andcapabilities
Enabled by
31Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Acquire more customers
In 2024, customer numbers grew organically
for the 17th year in a row, but we still only serve
around one in ﬁve from our target market.
Progress in 2024
Our customer base grew by 1.8% during the year, withsuccess
across each of our key segments: mid-market, enterprise and
public sector. Average headcount increased during the year
by14.3%, which included expanding our sales team, as well
assupporting specialist and technical teams.
Future focus
Our customers reﬂect approximately 20% of the addressable
market. We will continue to target new accounts through
further investment, training and development of our sales
teamand allowing our unique culture to ﬂourish. We are also
evolving our offerings to more closely align them with our
customers’ priorities and our expectations of the market.
KPIs
+1.8%
increase in customer base during the year
98%
customer satisfaction
Sell more to existingcustomers
The opportunity to help customers navigate a
complex array oftechnology choices has never
been greater.
Progress in 2024
We continued to evolve our customer offering in response
tothe changing technology landscape, keeping pace with
emerging customer needs.
Future focus
The rate of change in our industry, with respect to the technology
we are selling but also the channels through which it is sold
and the manner in which it is consumed, continues at pace.
This gives organisations like Softcat an exciting prospect to
take a bigger share of an ever growing opportunity. We will
also maintain our position as a key partner to both established
and emerging technology vendors, evolving our skills around
the ever-changing portfolios of services, products and
channels coming to market.
KPIs
+9.7%
increase in gross proﬁt per customer
duringtheyear
98%
customer satisfaction
Customer base and GP per customer
11,000
10,000
£40k
£45k
£35k
£30k
£25k
£20k
£15k
£10k
£5k
£0k
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024
Customer base
GP per customer
Our strategy in focus
32 Softcat plc Annual Report and Accounts 2024
Strategy continued
Social Bite beneﬁts
from Softcat’s
long-standing, robust
relationships with
leading technology
providers, securing a
free-of-charge solution
capable of making a
real difference to both
the charity and the
people it supports.
Strategy in action:
Free 5G wireless solution
helps SocialBite in
themovement to
endhomelessness
Social Bite’s challenges
In 2022, Social Bite opened a new coffee
shop in London, featuring its innovative
‘pay-it-forward’ scheme that allows
customers to donate food for homeless
people. It realised that providing free
Wi-Fi would attract more visitors and
enhance engagement with the community
and its charitable programmes. Initially,
it considered a ﬁxed-line internet
connection but found it too expensive
and time consuming to install. It reached
out to Softcat for a more cost-effective
solution to provide secure wireless
internet access.
Softcat’s solution
Softcat conducted initial discovery calls
with the Social Bite team to understand
its requirements, quantifying the potential
number of users, device types, ﬂoor
plans, and wireless use cases. Softcat’s
professional services consultants
performed a remote wireless network
assessment to determine optimal
locations for wireless access points.
TheSoftcat architecture services team
deﬁned a future state solution, including
necessary access points, a cellular 5G
router and ﬁrewall, and a 5G data SIM.
Softcat worked with trusted providers
todeliver the proposed architecture
freeof charge: Cisco Meraki for wireless
access points, Cradlepoint for the
cellular router and ﬁrewall, and Jola for
the 5G data SIM. Softcat’s professional
services team then installed and
conﬁgured the solution on-site in
asingle day.
The impact
The Social Bite coffee shop is now
operational with secure and reliable
internet access available for all staff and
customers. This initiative aims to attract
more visitors, increase footfall, and
support the charity’s ‘pay-it-forward’
strategy, which provides aid to those
experiencing homelessness.
Social Bite has leveraged Softcat’s
strong relationships with leading
technology providers to secure a free
solution that signiﬁcantly beneﬁts both
the charity and the people it supports.
With many support services only
accessible online, this initiative ensures
that those in need can easily access
available help.
Softcat remains committed to supporting
the charity. During May’s Big Cyber
Summit at London’s King’s Place, visitors
to the Softcat and Cradlepoint stands
could get a card stamped to support the
charity. Each completed card resulted
inadonation to Social Bite, raising
over£4,000 to provide free meals for
vulnerable people.
£4,000
raised for Social Bite to provide free
meals for vulnerable people
33Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
When we approached Softcat about getting Wi-Fi in our
coffee shop in London, we’d been struggling to resolve
the issues on our own, with no solution in sight. We were
hoping for Softcat’s help but we didn’t anticipate the
outstanding level of support it provided to deliver a
result beyond our expectations. It leveraged its expertise
and mobilised its supplier networks to ﬁnd ways around
numerous obstacles and sourced the answers and
technology required.
Along the way, it skilfully inﬂuenced multiple
stakeholders to prevent dela ys and remain resourceful
and solutions-focused. Softcat took us from no Wi-Fi
atall to live, free customer Wi-Fi, saving vital funds
andfacilitating a better guest experience, which in turn
will support increased awareness and donations and
help more people break the cycle of homelessness.
TheSoftcat team was a dream to work with and we
arehugely grateful for what it has made possible.
Thankyou so much.
Sara Rees
Social Bite Director of Partnerships and Fundraising
Please scan the
QR code to read
the fullarticle
Solution highlights
andbeneﬁts
• Extensive collaboration
todetermine solution scope
and project goals
• Full provision of professional
services to specify suitable
technologies and implement
the solution
• High-quality vendors
providingfree-of-charge
solution components
• Improved connectivity
Key facts
• Registered charity dedicated
tosupporting the homeless
• Leveraging of Softcat’s
expertise to co-ordinate
implementation of an improved
technology connectivity
solution at a key location for
the charity
• The solution provided strongly
aligned to the charity’s goals
of increasing awareness and
future donations
34 Softcat plc Annual Report and Accounts 2024
Strategy continued
Softcat’s wealth of
knowledge has helped
The Royal Borough
ofGreenwich (‘RBG’)
reﬁne its technology
roadmap and deliver on
time. Enhancing service
delivery through
innovative technology
and data solutions, all
built on a longstanding,
collaborative relationship,
has been at the core
ofthis project.
Strategy in action:
Transforming service delivery
through digital innovation
and strategic technology
partnerships for the Royal
Borough of Greenwich
RBG’s challenges
Deploying technology and data to
transform service delivery while managing
costs is a signiﬁcant challenge for RBG.
Its long-held ambitions have been
tofoster a ‘digital mindset’ and align
technology investments with its digital
strategy, amidst the signiﬁcant cost
restraints every Government organisation
operates within. This became even more
critical following theCovid-19 pandemic.
Its main challenge has been how to
bringon technologies and new ways
ofworking, while minimising cost and
gaining optimum value for money for
residents, businesses and visitors. RBG
wanted to work alongside a technology
provider who could implement an
ambitious digital strategy.
Softcat’s solution
Softcat has collaborated with the RBG
ITteam for nearly a decade, providing
high-performance technologies to
support its digital strategy. As with all
local authorities, despite the IT purchase
going out to tender, Softcat delivered,
both on quality and the best possible
value throughout the relationship.
RBG’s strategy centres on migrating
resident services to an online platform by
default, equipping staff with necessary
tools, building digital capability and data
proﬁciency, ensuring robust infrastructure
and systems, and fostering innovation.
Softcat has been pivotal in achieving
these goals, offering essential data
harnessing via Power BI and enhanced
security with M365 E5. As RBG moves
toafeature-rich Microsoft E5 licensing
agreement, Softcat continues to support
its digital transformation.
The impact
Softcat leverages deep industry
knowledge and partnerships with
leading technology providers to meet
organisational needs while minimising
costs. By closely collaborating with the
RBG IT team, Softcat delivered necessary
technologies strategically, introducing
costlier solutions only when essential.
Softcat worked to ensure RBG had
thedata tools needed to streamline
operations and support future goals.
Italso enhanced security and resilience
by aiding the transition to anE5licensing
model, timed perfectly forRBG’s
strategic objectives.
35Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
The relationship with Softcat is very collegiate.
Wediscuss problems openly and trust them to work
inour best interests. Softcat feels like an extension
ofourteam.
Softcat takes the time to understand our challenges
fromour perspective, then draw on their wide array of
expertise to show us potential solutions. The account
team is very proactive in their approach, supporting
ourtimeframe and priorities.
Timo Bayford
Interim Head of ICT at Royal Borough of Greenwich
Please scan the
QR code to read
the fullarticle
Solution highlights
andbeneﬁts
• Longstanding collaborative
working relationship
• Evolution of service delivery
and ways of working
• Effective, value-for-money
response to new challenges
Key facts
• High proﬁle public sector
customer: Borough includes a
UNESCO World Heritage site
and is home to the Greenwich
Prime Meridian
• Public sector customer
delivering services to 300,000
residents and businesses
• Focus on transforming service
delivery through harnessing
technology and data
36 Softcat plc Annual Report and Accounts 2024
KPIs
Summary results and KPIs
The ﬁnancial and non-ﬁnancial key performance indicators shown below demonstrate the Group’s
progress against strategic goals and delivery of ﬁnancial performance and shareholder value.
Thesemetrics are referred to throughout this report and further discussed in more detail within
theChief Financial Ofﬁcer’s Review on pages 38 to 41.
Financial
Revenue £m
1
962.6
Gross invoiced income £m
2
2,852.2
962.6
2,852.2
985.3
2,563.3
1,077.9
2,507.5
784.0
1,938.4
24
23
22
21
Strategic link
Comments
• Revenue includes all income from
the resale of third-party software,
hardware and services, as well as the
sale of the Group’s own services.
Comments
• Gross invoiced income reﬂects gross
income billed to customers adjusted
for deferred and accrued items.
Gross proﬁt £m
417.8
Basic earnings per share p
59.7
Operating proﬁt £m
154.1
Cash conversion %
2
95.9
417.8
59.7
154.1
95.9
373.8
56.2
140.9
93.2
327.2
55.5
136.1
76.2
276.4
48.4
119.4
89.9
235.7
38.2
93.7
88.0
24
24
24
24
23
23
23
23
22
22
22
22
21
21
21
21
20
20
20
20
Strategic link
Comments
• Gross proﬁt comprises revenue
net of third-party product costs,
supplier rebates and certain internal
direct costs.
Comments
• Basic earnings per share (‘EPS’) is
deﬁned as proﬁt after tax divided by
the number of shares in issue at the
balance sheet date.
Link to Directors’ remuneration
3
• EPS is a performance measure in the
targets for the Executive Directors’
Long Term Incentive Plan (‘LTIP’).
• Delivery of EPS growth will also
contribute indirectly to share price
performance and the ability to pay
dividends, both important elements
in total shareholder return (‘TSR’).
TSR is also a performance measure
of the LTIP.
Strategic link
Comments
• Operating proﬁt comprises gross
proﬁt net of administrative expenses.
Link to Directors’ remuneration
3
• For 2024, operating proﬁt accounts
for 80% of the weighting for the
Executive Directors’ annual bonus,
reﬂecting an important role in
measuring the delivery of in-year
shareholder value.
Comments
• Cash conversion ratio is net cash
generated from operating activities
before taxation, net of capital
expenditure, as a percentage
ofoperating proﬁt.
• The ﬁve-year average for cash
conversion is over 88%, reﬂecting the
highly liquid nature of the business
operations and a disciplined approach
to working capital management.
• In FY2022 there was a transient
expansion in year-end trade receivables
following the implementation in the
fourth quarter of a new ﬁnance system.
1,646.2
23
22
21
20
24
37Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Non-ﬁnancial
Employee engagement score %
90
90
92
90
93
24
23
22
21
Strategic link
Comments
• The employee engagement score is
derived from responses to an annual
survey of all staff.
• Enthusiastic and highly motivated
people form the very core of the
Softcat business model and our
customer proposition.
Link to Directors’ remuneration
3
• Actions overseen by the Executive
Directors to maintain strong employee
engagement are reﬂected in our
employee net promoter scores.
20% of the weighting (along with
customer satisfaction and selected
sustainability or inclusion actions)
is allocated for the Executive
Directors’ annual bonus, reﬂecting
the importance of a well-engaged
workforce to Softcat’s overall success.
Customer satisfaction %
98
Link to strategy:
98
97
94
95
97
24
23
22
21
20
Strategic link
Comments
• Customer satisfaction is deﬁned as
the percentage of customers who
rate themselves as either ‘satisﬁed’
or ‘very satisﬁed’ in response to an
annual survey (possible responses
also include ‘dissatisﬁed’ and ‘very
dissatisﬁed’). In 2024, the survey had
5,663 respondents (2023: 4,049).
Link to Directors’ remuneration
3
• Actions overseen by the Executive
Directors to maintain strong customer
satisfaction are reﬂected in our
customer net promoter scores. 20%
ofthe weighting (along with employee
satisfaction and selected sustainability
or inclusion actions) is allocated for
the Executive Directors’ annual bonus,
reﬂecting the importance of customers,
who are at the core of Softcat’s strategy.
Gross proﬁt per customer £’000
40.6
40.6
37.0
33.0
28.4
24.8
24
23
22
21
20
Strategic link
Comments
• Gross proﬁt per customer is deﬁned
as gross proﬁt divided by the number
of customers.
• New customers are included in the
calculation and tend to create a dilution
of the metric, but to a similar degree
from one ﬁnancial year to another.
• The growth in this metric therefore
demonstrates the value created
by ever-deepening, long-term
relationships, and the Group’s
ability to sell an increasing range
oftechnologies based upon
genuinetrust and loyalty.
Customer base ’000
10.3
10.3
10.1
9.9
9.7
9.5
24
23
22
21
20
Strategic link
Comments
• Customer base is deﬁned as the
number of customers who have
transacted with Softcat in both of the
preceding twelve-month periods.
• Growth in this metric demonstrates
the ability of the sales force to win
new customers while also retaining
existing relationships.
• Important for in-year performance
but also underpins future growth.
93
20
1. During FY2022, there was a change in
accounting policy following the IFRS IC
agenda decision – IFRS 15 Revenue from
Contracts with Customers, treatment
ofsoftware revenue as agent revenue.
This resulted in the restatement of the
FY2021 comparatives. As a result,
revenue is only available on a
comparative basis for 2021 to 2024.
2. Gross invoiced income (‘GII’) and cash
conversion are alternative performance
measures. Please see page 41 for further
deﬁnitions and reconciliations.
3. For more information on the remuneration
of the Executive Directors, please see
the Annual Report on Remuneration on
pages 125 to 146.
Read more in our Chief Financial
Ofﬁcer’s review; see pages 38 to41.
Acquire more customers
See page 30
Sell more to existing customers
See page 30
Maintain relevance and expand
ouraddressable market
See page 30
Ease of doing business
See page 30
People and culture
See page 30
38 Softcat plc Annual Report and Accounts 2024
Gross proﬁt, revenue and
gross invoiced income
Our FY2024 results reﬂect both the
strength of our business model and
excellent execution, as we support the
needs of new and existing customers
through our comprehensive range of IT
solutions and highly engaged employees
while also investing in strategic priorities
that will position us for future success.
Gross proﬁt (GP), our primary measure
ofincome, grew by 11.7% to £417.8m,
inline with guidance of double-digit
growth for the year. Our FY2024 forecast
was based on the premise that market
conditions would remain in line with the
second half of FY2023, when we saw
some customers adopting a more
considered approach to buying
decisions, and this turned out to be
materially correct with macro volatility
continuing across the period.
Proﬁtable growth across
all customer segments
We have continued to invest in the
long-term growth potential of Softcat,
increasing headcount, investing in
newofﬁce capacity and continuing to
develop our data and digital platforms.
Katy Mecklenburgh
Chief Financial Ofﬁcer
Chief Financial Ofﬁcer’s review
Thisperformance demonstrates, yet
again, the resilience our broad product
portfolio and diverse customer base
brings to the business.
GP growth across enterprise, mid-market
and public sector customer segments
was broad based with all segments
growing high single-digit or double-digit.
GP growth across technology areas was
also widespread, albeit with particularly
strong growth in networking and security
driven by the continued high demand
forcyber, while workplace was impacted
by a continued weak market for client
devices partially offset by an increase
indemand for devices-as-a-service.
Software and services GP also grew
double-digit, with hardware GP growth
accelerating in the second half to ﬁnish
the year at high single-digit. Hardware
GII declined by (8.0%), due to the market
driven decline in client devices and a
reduction in low margin server and
compute sales linked to a handful of
sizeable transactions in the base period,
however, this was more than offset
bygross margin expansion driven
byamix into margin rich datacentre
infrastructure sales.
Revenue is reported in accordance with
IFRS 15 with some transactions (generally
hardware and internally-delivered
services) reported gross (principal) and
others (generally software and externally
provided services) reported net (agent)
which can make revenue trends hard to
understand. We have thus continued to
also report GII to help give a clearer view
of underlying growth. FY2024 revenue
declined overall by (2.3%) driven by:
(1)an (8.0%) decline in hardware GII
dueto client devices and a reduction
inlow margin server and compute sales
described above; (2) software revenue
which grew at 13.1% compared to GII
growth of 17.1% due to a lower software
gross margin driven by a mix into
highvolume, low margin, mostly public
sector transactions in the period; and
(3)services revenue which registered
1.1% revenue growth compared to a
GIIgrowth of 18.5% caused by a mix
intoservices fulﬁlled by partners which
isreported net.
39Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
GII increased 11.3% to £2,852.2m, driven
by the strong growth in software and
services mentioned above, partially
offset by hardware. Year on year, GP
grew largely in line with GII, with GP as
apercentage of GII stable year on year
(14.6% vs. 14.6% in FY2023). GP growth
accelerated slightly into H2, driven by
the relatively weaker base with macro
volatility continuing to impact the
trading environment across both
halvesof FY2024.
As shown in the below table, GII growth
accelerated in H2 (17.8%) vs H1 (4.0%)
associated with a decline in GP as a
percentage of GII (13.9% vs 15.6% in H1).
In H1 gross margin expanded compared
to the prior year due to the decline in
lowmargin client device sales and a
reduction in low margin server and
compute sales linked to a handful of
sizeable transactions in the base period
and a mix into margin rich datacentre
infrastructure solutions; while in H2 there
was a higher volume of lower margin deals,
primarily through public sector frameworks
transactions which predominantly drove
the year-on-year and H2 vs H1 decline.
Customer KPIs
During the year, GP per customer grew
by 9.7% to £40.6k (FY2023: £37.0k) and
the customer base expanded by 1.8%, to
10.3k (FY2023: 10.1k). Growth in GP per
customer was broad based, driven by all
three of our solution types (datacentre
infrastructure, networking and security
and workplace).
As the longevity of the relationship
withour customers increases, the GP
transacted with them also increases.
Over time, customers buy across more
technology areas and thus across an
increasing range of vendors. Loyalty, as
measured by lower churn of customers,
also signiﬁcantly increases.
Once a customer is transacting greater
than £1k of GP p.a., the likelihood that
they stop trading with Softcat drops
signiﬁcantly. The churn rate in customers
doing less than £1k GP is 29%, falling to
an average of 6% in customers trading
above this threshold, with the churn rate
inversely correlated to per annum
increases. This, more stable, customer
cohort doing >£1k grew at 5.1% from 7.5k
to 7.9k with the average GP delivered
from each of those customers expanded
by 6.3% from £49.6k to £52.7k.
The long tail of low transactional
customers, along with customers who
have not purchased from Softcat in the
last 12 months or at all, constitute future
growth opportunities which our Account
Manager model balances against the
opportunity from continuing to go
deeper with the existing customer base,
thus optimising the balance between
both strands of our strategy, to attract
new customers and go deeper with our
existing customers.
Company analysis, incorporating data
from multiple sources (Gartner, HG
Insights, CRN and ICG), indicates that
our market share remains around 5% in
the UK. We transact with approximately
Financial Summary
FY2024 FY2023 Change
Gross invoiced income split
– Software
£1,807.5m £1,543.5m 17.1%
– Hardware
£568.5m £617.8m (8.0%)
– Services £476.2m £402.0m 18.5%
Total gross invoiced income
1
£2,852.2m £2,563.3m 11.3%
Revenue split
– Software
£213.5m £188.8m 13.1%
– Hardware
£561.2m £610.6m (8.1%)
– Services
£187.9m £185.9m 1.1%
Total revenue £962.6m £985.3m (2.3%)
Gross proﬁt £417.8m £373.8m 11.7%
Gross proﬁt margin
2
14.6% 14.6% — pts
Operating proﬁt £154.1m £140.9m 9.3%
Operating proﬁt margin
2
5.4% 5.5% (0.1) pts
Gross proﬁt per customer
3
£40.6k £37.0k 9.7%
Customer base
4
10.3k 10.1k 1.8%
Cash conversion
5
95.9% 93.2% 2.7 pts
1. Gross invoiced income reﬂects gross income billed to customers adjusted for deferred and
accrued revenue items. This is an Alternative Performance Measure (APM). For further
information on this, please refer to page 41.
2. Gross proﬁt margin and operating proﬁt margin are both calculated as a percentage of gross
invoiced income.
3. Gross proﬁt per customer is deﬁned as Gross proﬁt divided by the customer base.
4. Customer base is deﬁned as the number of customers who have transacted with Softcat in
both of the preceding twelve-month periods.
5. Cash conversion is deﬁned as net cash generated from operating activities before tax but
after capital expenditure, as a percentage of operating proﬁt. This is also an Alternative
Performance Measure. For further information on this, please refer to page 41.
H1
FY2024
H1
FY2023 Change
H2
FY2024
H2
FY2023 Change
GII £1,263.5m £1,214.7m 4.0% £1,588.7m £1,348.6m 17.8%
GP £196.5m £177.1m 11.0% £221.3m £196.7m 12.5%
GP/GII %
15.6% 14.6% 1.0 pts 13.9% 14.6% (0.7) pts
40 Softcat plc Annual Report and Accounts 2024
20% of the customers in our target
market in the UK based on those
whotrade with us in two consecutive
12month periods and this implies
a25%average share of wallet.
Operating proﬁtability
and investment in
futuregrowth
Operating proﬁt of £154.1m (FY2023:
£140.9m) increased by 9.3% year on year,
ahead of expectations, and reﬂects the
11.7% increase in GP offset by a 13.2%
rise in operating costs.
Operating cost growth was driven by
increased commissions, in line with GP
growth, and a 16.8% increase in wages
and salaries, driven by a 14.3% increase
in average headcount. H2 operating
costgrowth of 12.2% represented a
deceleration from the growth of 13.9%
inH1, predominantly driven by lower
average headcount growth (H1: 16.3%
vsH2: 11.7%), with closing headcount
growth of 8.4%, in line with the more
moderate high single-digit headcount
growth planned for FY2025 as we fully
leverage the 30.6% combined
headcount growth of the last two years.
We continue to invest in our systems and
data and digital journey. During FY2024
we invested £7.1m across operating
expenditure and capital expenditure to
build further ﬁnance system functionality,
upgrade our service management
system and automate parts of our
creditassessment and cash allocation
processes, as well as develop our data
governance and digital strategy. In the
second half of FY2024 we decided to
invest in Microsoft Copilot for all our
staff with 60% of staff already having
access by the end of the ﬁnancial year.
At the end of FY2024 we committed to
ofﬁce moves in London and Birmingham.
We expect to ﬁnalise these moves
during FY2025 and this will signiﬁcantly
increase our ofﬁce capacity in these
tworegions.
As a result of the ongoing investment,
we are making in the future of our
business, the ratio of operating proﬁt
togross proﬁt has marginally decreased
from 37.7% in FY2023 to 36.9% in FY2024
and was consistent in the second half
ofboth periods at 39.5% and 39.6% in
FY2024 and FY2023 respectively.
Corporation tax charge
The effective tax rate for FY2024 was
25.3% (FY2023: 21.0%), reﬂecting the
UKstatutory increase to 25.0% from
April 2023. This is marginally higher
thanthe UK statutory rate due to a small
number of non-deductible expenses
andshare-based payment transactions.
Our tax strategy continues to be focused
on paying the right amount of tax in the
right jurisdiction, at the right time.
Cash ﬂow and
cashconversion
Cash at the FY2024 balance sheet
dateincreased by £35.8m to £158.5m
(FY2023: £122.6m), and the Group
remains debt free.
Cash conversion, deﬁned as net cash
generated from operating activities
before tax but after capital expenditure,
as a percentage of operating proﬁt, was
95.9% (FY2023: 93.2%). The result is
slightly above our target range of
85%-95% cash conversion. The strong
performance was due to good working
capital management particularly on
receivables, only partially offset by
increased capex due to investments
inITplatforms.
Our capital allocation policy remains
unchanged, prioritising investment
inorganic growth to ensure we can
continue to take market share in our
growing addressable market; secondly
to maintain a progressive ordinary
dividend. Remaining excess capital is
then either returned to shareholders or
allocated to strategic investments such
as M&A. In FY2024 we have continued to
invest in the long-term growth potential
of Softcat, increasing headcount,
investing in new ofﬁce capacity and
continuing to develop our data and
digital platforms. Our proposed total
ordinary dividend of 26.6p is 6.4%
higher than FY2023 and excess cash
willbe returned to shareholders via
aspecial dividend.
Finance Income
In the period income from cash and
cashequivalents held in interest bearing
accounts totalled £5.8m (FY2023: £1.2m).
Dividend
A ﬁnal ordinary dividend of 18.1p
pershare (FY2023: 17.0p) has been
recommended by the Directors,
bringing the total dividend for the year
to 26.6p per share (FY2023: 25.0p).
Ifapproved by shareholders, the ﬁnal
ordinary dividend will be payable on
17December 2024, toshareholders
whose names are on theregister at the
close of business on8November 2024.
Shares in the Company will be quoted
ex-dividend on7 November 2024. The
last day for dividend reinvestment plan
(‘DRIP’) elections is 26 November 2024.
In line with the Group’s stated intention
to return excess cash to shareholders,
afurther special dividend payment of
20.9p per share has been proposed.
Ifapproved by shareholders, this will
also be paid on 17December 2024
alongside the ﬁnal ordinary dividend.
This will bring the total amount returned
to shareholders since becoming a
publiccompany to £571.2m.
Group consolidation
Softcat US LLC, a Limited Liability
Company (LLC) began trading on
1February 2024 and is a wholly owned
subsidiary of Softcat plc. Prior to this,
trade in the US was recorded within a
branch of Softcat plc and single entity
accounts were prepared. Following this
change, consolidated full year accounts
have been prepared for the ﬁrst time.
Chief Financial Ofﬁcer’s review continued
41Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Alternative Performance Measures
The Group uses two non-Generally Accepted Accounting Practice (non-GAAP)
ﬁnancial measures in addition to those reported in accordance with IFRS.
TheDirectors believe that these non-GAAP measures which are set out below,
assist in providing additional useful information on the underlying trends, sales
performance and position of the Group.
Consequently, non-GAAP measures are used by the Directors and management
for performance analysis, planning and reporting and have remained consistent
with the prior year. These non-GAAP measures comprise gross invoiced income
(or ‘GII’) and cash conversion.
1. Gross invoiced income is a measure which correlates closely to the cash
received by the business and therefore aids the users understanding of
working capital movements in the statement of ﬁnancial position and the
relationship to sales performance and the mix of products sold. Gross
invoiced income reﬂects gross income billed to customers adjusted
fordeferred and accrued revenue as reported in the IFRS measure.
Areconciliation of IFRS Revenue to gross invoiced income is provided
withinNote 2 of the ﬁnancial statements.
2.
Cash conversion ratio is net cash generated from operating activities before
taxation, net of capital expenditure, as a percentage of operating proﬁt.
Cashconversion is an indicator of the Group’s ability to convert proﬁts into
available cash. A reconciliation to the adjusted measure for cash conversion
is provided below:
2024
£’000
2023
£’000
Net cash generated from operating activities 115,608 104,802
Income taxes paid 39,226 29,793
Cash generated from operations 154,834 134,595
Purchase of property, plant and equipment (1,115) (2,544)
Purchase of intangible assets (6,017) (701)
Cash generated from operations, net of capital
expenditure 147,702 131,350
Operating Proﬁt 154,064 140,898
Cash conversion ratio 95.9% 93.2%
Katy Mecklenburgh
Chief Financial Ofﬁcer
23 October 2024
42 Softcat plc Annual Report and Accounts 2024
Section 172 – Stakeholder engagement
Engaging with all of our stakeholders
In this section we identify our key stakeholders, explaining why and
how the Group and Directors actively engage with them. We set
out a number of metrics used to measure success and summarise
some of the outcomes of our engagements. The Board considers
regular and effective engagement with Softcat’s stakeholders
to be fundamental to our success. A comprehensive schedule
exists which provides the Board with information on each of
its stakeholders throughout the year and direct engagements
arearranged either for the Board or by management and the
Executive Directors so that the Board is kept updated. In this
way, the Board considers that it acts to promote the success of
the Group, leveraging on the skills and expertise throughout the
business to make sure the Board has due regard to the interests
ofits stakeholders.
We deﬁne our key stakeholders as
individuals or groups who have an
interest in, or are affected by, the
activities of our business. The Board
believes a good understanding of our
key stakeholders and their needs is
essential to deliver sustainable value
creation over the long term, bringing
beneﬁts to both our shareholders and
our stakeholders.
Director responsibilities
Our Directors are fully aware of their
responsibilities under Section 172(1)
ofthe Companies Act 2006 (the ‘Act’)
and take their responsibilities seriously.
TheBoard considers that, in its decisions
and actions taken, it has acted in a way
that would promote the success of the
Group for the beneﬁt of its members as a
whole, whilst having regard to stakeholders
and matters set out in Section 172(1) (a–f)
of the Act. The Directors’ responsibilities
under Section 172 are rooted in our
culture, our values and particularly
ourpurpose: ‘we help customers use
technology to succeed, by putting our
employees ﬁrst’.
Section 172 imposes a duty on our
Directors to consider the likely
consequences of any decision in the
long term and there are a variety of
means by which the Directors achieve
this obligation. The Board receives
standing updates at each Board meeting
from the CEO and CFO on key market
developments and on the Group’s
operational and ﬁnancial performance.
Members of the Senior Leadership Team
(‘SLT’) also provide regular updates on a
wide range of topics, including business
updates, changes in our market, and
customer and employee issues.
TheCompany Secretary also provides
regular brieﬁngs to the Board which
include updates on regulation, compliance
and corporate governance. Updates often
include the outcome of engagement with
employees, customers and key suppliers.
The Board also holds an annual strategy
review, which includes presentations
from key areas of the business and the
review of a three-year ﬁnancial plan.
The annual strategy review provides
adedicated forum, in addition to the
Board meetings, for the Board to discuss
the areas of focus and change over the
coming year and beyond. Actions arising
from the annual strategy review are
progressed and considered throughout
the year.
These Board review and information
frameworks provide comprehensive
coverage in respect of all of Softcat’s
stakeholders and give the Board aforum
to be aware of and discuss stakeholder
issues at regular intervals.
43Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Our key stakeholders
Employees
Our employees are at the heart of our business and help to drive Softcat’s
continued success
Customers
Understanding the needs of our customers in order to build enduring
relationshipsiscritical to Softcat’s strategy
Suppliers and vendors
Our strong relationships with our suppliers and vendors help us provide
thebestsolutions and support for our employees and customers
Investors
Investors are the owners of the business and have made a ﬁnancial
commitmenttothesuccess of Softcat
Communities and the environment
We recognise we are part of each community in which we operate and
itisvitaltomakea meaningful commitment to long-term sustainability
Our key stakeholders
The Board has identiﬁed Softcat’s key
stakeholders to be our employees,
customers, suppliers and vendors,
investors, and the environment and
communities in which we operate.
Weconnect with our stakeholders at all
levels of our business. The potential
impact of the Group’s operations on
each of our stakeholders is an important
consideration for the Board. The Board
has approved a framework of key topics
which ensures that regular updates are
received and discussed by the Board
regarding each stakeholder group. On
occasion, as explained within this report,
the Board has also directly engaged
withits stakeholders, when it determines
this to be the most effective method of
engagement to support its views and
potential decision making. The Board’s
approach to engagement and stakeholder
management ensures it remains well
informed and able to make appropriate
considerations when deciding Softcat’s
strategy and other business decisions.
The following table sets out how our
stakeholders have been engaged with,
how relationships with stakeholder
groups are monitored, and how their
interests have inﬂuenced decisions
made by the Board.
Read more elsewhere in this Strategic
Report, our report on social value
isonpages 52 to 59, our report on
climate-related ﬁnancial disclosures
andsustainability onpages 60 to 82
andour corporate governance section
onpages 90 to 153.
44 Softcat plc Annual Report and Accounts 2024
Section 172 – Stakeholder engagement continued
Decision making by the Board
Board information Board discussion Board decisions
• The CEO provides standing
updates, including on culture,
competitive activity, market
trends and customers.
• The CFO provides standing
updates including on Group
performance, investment capacity
and the needs of the business.
• A formal annual Board strategy
review session is held, with
updates throughout the year.
• The Board has a schedule of
future presentations and direct
engagements with customers,
vendors and employees.
• The CEO and CFO conduct
roadshows with current and
prospective shareholders.
The Chairman engages with
the largest shareholders
ongovernance.
• A schedule of matters is reserved
to the Board which facilitates
formal decisions requiring Board
approval, many of which relate
toour stakeholders.
• Other important information
relevant to the Directors’ duties
are presented to either the Board
or the relevant Board Committee.
• Strategic discussion by the
Board reﬂects the Section 172
factors, in particular on long-term
value creation.
• The Board receives sufﬁcient,
timely, accurate and
comprehensive information
tosupport high-quality review,
discussion and decision making.
The Company Secretary has a
standing mandate to ensure
that information ﬂows meet
thisrequirement.
• All Board items are clearly marked
for either approval, discussion
or noting.
• The Chairman, with the support
ofthe Company Secretary,
ensures sufﬁcient time is
allocated for the Board to
reviewand approve decisions.
• Duties to our stakeholders are
taken into account as appropriate
when making decisions.
• The Board considers and if
appropriate, approves all
items where an approval
request is made.
• Actions are taken to implement
the Board’s decisions. These
are captured as needed by the
Company Secretary so that
outcomes are reported back
tothe Board.
• Actions are also taken as a
result of various engagements
and surveys with stakeholders,
particularly for our employees
and customers. Actions
implemented and outcomes
from the prior year’s customer
satisfaction and employee
engagement surveys are
presented to the Board.
Section 172 considerations
Likely long-term consequences
Employee interests
Relationships with customers, suppliers and others
The impact on the community and environment
Maintaining a reputation for high standards of business conduct
Acting fairly between shareholders of the Company
45Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Employees
Our employees are at the heart
of our business and help to drive
Softcat’s continued success.
How we engaged and monitored
• The Board operates an extensive
framework of employee engagements
and monitoring of employee views.
These are captured in a twelve-month
forward schedule which is managed
by the Company Secretary to ensure
there are sufﬁcient engagement
opportunities and comprehensive
information ﬂows to the Board.
• Vin Murria, our Designated
Non-Executive Director for Workforce
Engagement, is responsible for
ensuring we have an effective
employee engagement process.
During the year, the Board agreed a
more comprehensive engagement
process between the Non-Executive
Directors and each Softcat ofﬁce,
asexplained on pages 50 and 51.
• The Chair of the Remuneration
Committee also holds an annual
engagement session with employee
representatives to discuss the
approach to pay, incentives and
reward throughout the organisation.
The session also provides an
opportunity to explain and discuss
executive remuneration. Employee
representatives asked questions
to theChair of the Remuneration
Committee and they received
responses. A summary of the
session was then discussed with
theRemuneration Committee.
• Each year we hold a ‘Kick Off’ event,
which all employees are invited to
attend in person. This provides the
Executive Directors (on behalf of
the Board) with an opportunity to
engage with all employees together
at a single event. The event includes
presentations of key business
achievements of the year and key
business goals to consider in the
coming year. Vendors also attend in an
exhibition area, providing the vendors
with a further opportunity to engage
with employees. Key achievers in
the business are celebrated in an
employee awards event.
• Through the Nomination Committee,
management presents a succession
plan on key positions in the
Company. Effective leadership is
vital to maintain our special culture,
capabilities and performance,
all of which beneﬁt our key
stakeholders. The Committee
provides oversight and constructive
challenge to management to ensure
that robust plans are in place to
maintain high-quality leadership
for the beneﬁtof the Group and
itsemployees.
• We hold an annual employee
engagement survey, the results of
which are reported to the Board, with
an action plan to tackle the issues
raised. Results are compared against
last year’s equivalent questions to
track progress. Quarterly surveys are
also discussed with the Board on the
performance and engagement by our
most senior managers.
• Virtual all-hands meetings are held to
update employees on the business.
This includes opportunities for
employees to submit questions to
Directors and senior management
after the event for a response.
Feedback on these meetings is
shared by the CEO with the Board.
• Internal communications, such as
weekly ‘love’ emails, detailing initiatives,
recognising accomplishments and
raising awareness of key matters are
regularly circulated Group-wide.
• Feedback on employee pay is
collated through a variety of
sources, including through the
employee engagement survey
and exit interviews. The Board or
Remuneration Committee receives
regular updates on employee
attrition levels and on pay conditions.
In particular, the Remuneration
Committee takes into consideration
pay rises for the wider workforce
before it considers any pay rises for
the Executive Directors.
• As part of our Board strategy review,
the Chief People Ofﬁcer presented
an update to the Board on the
evolving capability requirements
of our employees and the plan
toaddress this.
Key topics of engagement
• Ofﬁce culture
• Pay and reward structures
• Recruitment and ongoing investment
for long-term organic growth
• General wellbeing and job
satisfaction, including recognition
ofachievements
• Sustainability
• Diversity and inclusion
Outcomes
The Board reviewed, approved or
endorsed outcomes, including:
• The Board agreed that the more
extensive engagement programme it
had approved between Non-Executive
Directors and each Softcat ofﬁce
was a more effective engagement
process. This supported a more
comprehensive discussion and wider
understanding from the perspective
of employees. Please see pages 50
and 51 for more details.
• The Board reviews each year
itscapital allocation framework
(seepage 102) which deﬁnes priority
areas for investment. Following
review this year, investment remains
prioritised for organic growth,
which is primarily achieved by
increasing headcount, investing in
employees and investing in systems
and processes to further empower
employees on our strategic enabler
of ease of doing business.
• Direct engagements were held
between the Board and certain
employees identiﬁed for potential
progression in the management
succession plan. This provided
theBoard with an opportunity to
better understand the role and
contribution of those employees
and provided the employees with
adevelopment opportunity.
• Given the importance of employee
engagement to the success of
Softcat’s strategy, the Remuneration
Committee of the Board decided
once again to incorporate performance
metrics in the Executive Directors’
annual bonus plan in respect of
good employee engagement (see
the Annual Report on Remuneration
onpages 125 to 146).
• We continue to invest in improvements
to our internal IT infrastructure. This
was included as part of the Board’s
annual strategy review and investment
costs were also included in the annual
operating budget and longer-term
three-year plan discussed and approved
by the Board. The improvements are
designed to better the employees’
user experience and enhance
their productivity.
• An annual review of salaries for all
roles was undertaken and discussed
with the Remuneration Committee,
on behalf of the Board.
• The Board requested further updates
on the plans to further enhance
employee capabilities.
• The Board welcomed as a
successful metric an employee net
promoter score of 59 and employee
engagement of 90%.
46 Softcat plc Annual Report and Accounts 2024
Customers
Understanding the needs of
our customers in order to build
enduring relationships is critical
to Softcat’s strategy.
How we engaged andmonitored
• Our annual customer experience
survey, sent out to customers,
requests honest feedback, the results
of which are reported to the Board
against the results of the previous
year to track progress.
• Direct engagement between the
Board and key customers of Softcat.
• The Board receives standing updates
at each Board meeting on any
material customer disputes.
• The Board reviews regular
management information which
analyses important customer data
and trends, such as growth in the
customer base and the changes in
the type of customer.
• The annual Board strategy review
includes a focus on how the business
will need to evolve and change to
continue best serving our customers.
Ongoing investment to ensure we
serve our customers well is included
in the annual operating budget,
which is approved by the Board.
• Senior managers from the sales team
meet with the Board regularly to
discuss strategic customer issues,
such as the evolution of our customer
propositions. This provides the Board
with advance views of how Softcat’s
relationships with its customers are
expected to mature and improve.
Key topics of engagement
• Understanding actions necessary for
increasing customer satisfaction
• Softcat’s sales model
• Technology propositions for customers
• Understanding customers’ IT
priorities and main challenges
• Investment to ensure our employees
have strong capabilities to support
our customers
• Changes in the market which impact
our relationship with our customers
Outcomes
The Board reviewed, approved or
endorsed outcomes, including:
• A comprehensive action plan,
developed from the feedback
received through the annual customer
experience survey, to further improve
customer satisfaction.
• Holding a direct engagement
between the Board and one of our
customers. This helped the Board
tobetter understand the role Softcat
plays for the customer and the views
from the customer as to why they
chose Softcat as their partner.
• Approval of the annual budget which
includes investment to better support
ease of doing business with customers.
The Board has also approved an
upgrade to the existing sales IT system
and will oversee a post-investment
review once the upgrade is complete
to ensure it meets the objective to
better support our customers’ needs.
• Given the importance of customer
satisfaction to the success of
Softcat’s strategy, the Remuneration
Committee of the Board agreed to
include a performance metric in the
Executive Directors’ annual bonus
on maintaining good customer
satisfaction (see the Annual Report
onRemuneration on pages 125 to 146).
• The Board welcomed as a successful
metric 5,663 respondents to
the customer survey with 98%
customersatisfaction.
Section 172 – Stakeholder engagement continued
47Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Case study
Softcat ofﬁces
Stakeholders considered
orimpacted:
Employees
Communities and
theenvironment
Suppliers and vendors
During the year, management reviewed
our London and Birmingham ofﬁces. The
review considered, amongst other things,
the capacity of the ofﬁces to adequately
accommodate the needs of employees.
Following review, management proposed
that larger ofﬁces were required for each
ofﬁce and proposed to the Board moves
for both ofﬁces.
In addition to better accommodating
theneeds for employees, our ofﬁces
also provide facilities for our vendors to
visit and engage with employees, which
is important to promoting stronger
relationships and better understanding
of vendor products and services. The
new ofﬁces provide better facilities,
including a ‘vendor bar’.
Sustainability was a consideration in
theproposal to move ofﬁces. The Board
was informed that landlords for the new
ofﬁces would work with our sustainability
team to ensure the new ofﬁces will meet
our sustainability strategy, objectives
and targets.
Employee wellbeing was also a
consideration in the Board proposal.
Our facilities and workplace team
explained the work being done to focus
on optimising health within the building,
through bespoke ofﬁce design strategies.
The Board considered the proposal,
including the beneﬁcial impacts it will
have in respect of the relevant stakeholders
(employee, vendors and environment).
Following review, the Board approved
management’s proposals.
Section 172 factors were also part ofthe
approval. In particular:
• Likely long-term consequences: the
ofﬁce moves are strategically aligned
to our growth agenda, which includes
increased headcount.
• Employee interests: the move to the
London ofﬁce in particular received
input from the local teams who
expressed an interest of moving to
an ofﬁce where all of the staff could
be located on a single ﬂoor. This
was considered to be beneﬁcial to
upholding the excellent employee
culture in the ofﬁce.
• Impact on environment: a
high-quality sustainability ofﬁce
environment was included as part
ofthe Board proposal, allowing this
to be a relevant decision criterion as
part ofthe Board’s approval.
• Relationships with customers, suppliers
and others: customers and vendors
often visit our ofﬁces. By moving to
larger premises with more meeting
and collaboration spaces, we
enhance our everyday relationships
with our customers and vendors.
• Maintaining a reputation for high
standards of business conduct:
a post-investment review will be
conducted a year after the ofﬁce
moves are complete. This will provide
feedback to the Board on several
matters, including whether the
objectives of the ofﬁce moves and
beneﬁcial impacts on its stakeholders
have been achieved.
48 Softcat plc Annual Report and Accounts 2024
Section 172 – Stakeholder engagement continued
Suppliers and vendors
Softcat’s strong relationships
with its suppliers and vendors
help it provide the best
solutions and support for its
employees and customers.
How we engaged and monitored
• Direct engagements between the
Executive Directors and key vendors.
Regular updates at Board meetings
from the CEO reﬂect on recent
engagements and also include
matters such as major changes
intechnology offerings.
• Our dedicated internal ‘vendor
alliance teams’ manage and
maintain Softcat’s relationships
with key vendors. Any key market
developments are informed to the
CEO for further discussion with
the Board.
• During the year, the Board held a
direct engagement with one of its
major vendors (by revenue). This
provided good insight for the Board
to understand the relationship from
the vendor’s perspective and to
directly discuss the key strategic
priorities of the vendor and how
these might impact on Softcat.
• Our sustainability team continues
to enhance its engagement to
better understand the sustainability
commitments and net zero targets of
our major suppliers and vendors. This
is part of a Board-approved target
to achieve a carbon net zero supply
chain by 2040 (see page 77 for more
information). The sustainability team
has mapped the net zero plans of our
largest vendors to see the degree
of alignment to Softcat’s target
and it presented its ﬁndings to the
Sustainability Committee on behalf
of the Board. The Sustainability
Committee also received an update
on a very successful Partner Forum
meeting, which included a dedicated
sustainability breakout session
focusing on the opportunities and
challenges of greater sustainability
inthe supply chain.
• Softcat is required to publish its
performance in respect of the
timeliness in which it pays its
suppliers. The Board reviews the
latest performance, providing
oversight to ensure we maintain
a good track record of paying
our suppliers, thus protecting the
business from reputational damage.
Key topics of engagement
• Market developments in respect
ofkey suppliers and vendors
• Engagements between the Executive
Directors and key suppliers
and vendors
• Sustainability of products and services,
and future goals and commitments
• Maintaining performance of payment
practices for our suppliers
Outcomes
The Board reviewed, approved or
endorsed outcomes, including:
• The Board discussed potential market
changes which may impact the way
in which certain vendors trade and
the potential impact on parts of
Softcat’s operating model. The Board
requested further updates from
management on how the business
will respond and management
demonstrated the additional focus
and plans which are in place.
• The potential impacts of changes in
technology, particularly in respect
of AI, data and automation, were
discussed regularly. This provided
the Board with better insight on
vendor offerings and how Softcat
was engaging with the vendors on
changes in technology to remain
relevant to the products and services
sold to customers. This equips the
Board with the information it needs
for future decisions.
• Sustainability measures and activities
with vendors were endorsed. The
Sustainability Committee in particular
has asked management to provide
further updates on working with
vendors to achieve our 2040 net
zerosupply chain target.
• Through robust procedures and
systems, management demonstrated
to the Board that payment times
to suppliers continued to improve.
The Board noted improvements in
the performance to pay more of our
suppliers in a timely manner.
49Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Communities and the environment
We recognise we are part of
each community in which we
operate and it is vital to make
a meaningful commitment to
long-term sustainability.
How we engaged and monitored
• Softcat’s sustainability strategy,
progress and performance were
regularly monitored at Board level
through the Sustainability Committee.
• Our charity team, which reports to
members of the Senior Leadership
Team, has strong connections
with local and national charities
and volunteering networks and
also engages with our employees.
Material ESG issues are included in
each Board report from the CFO.
• Through our sustainability
governance framework, we have
initiatives and localised green teams
to support environmental activities.
• We maintain dialogues with local
institutions, such as schools and
colleges, to understand how we
can help them and how we can
encourage students to join our
apprenticeship scheme.
• Approval of new ofﬁces is a matter
reserved to the Board. Proposals for
new ofﬁces include sustainability
considerations which are factored
into the Board’s approval process
(see case study on page 47).
Key topics of engagement
• Softcat’s sustainability
strategy and goals
• Selection of charities and
volunteering initiatives our
employees wish to support
• How Softcat can best help local
communities and groups
Outcomes
The Board reviewed, approved or
endorsed outcomes, including:
• Operating a Sustainability
Committee, which has delegated
responsibility for setting Softcat’s
sustainability strategy, monitoring
Softcat’s performance against its
emissions targets and oversight of
sustainability initiatives and activities.
• The Board had previously approved,
through the annual operating
budget, installation of solar panels
at the head ofﬁce in Marlow.
Conﬁrmation was provided to the
Sustainability Committee on behalf of
the Board that the installation project
was now complete and operational.
Management is providing updates to
the Sustainability Committee on the
level of energy now self-generated
for the head ofﬁce’s use.
• Softcat works closely on a number
of initiatives which support
volunteering, charitable giving,
socialmobility, diversity and inclusion
(please see page 57). This further
demonstrates our commitment to
being a purpose and people-led
business by boosting opportunities in
the communities in which we operate.
• Given the importance of to the
success of Softcat’s strategy
of reducing our impact on
the environment and further
boosting employee inclusivity,
the Remuneration Committee
of the Board decided to include
performance metrics in the
Executive Directors’ annual bonus
plan in respect of environmental
sustainability and employee
inclusivity. Please see the Annual
Report on Remuneration on pages
125 to 146 for further details
and outcomes.
Investors
Investors are the owners of
the business and have made
a ﬁnancial commitment to the
success of Softcat.
How we engaged and monitored
• The CFO and CEO regularly engage
with major shareholders and analysts
in respect of Group performance.
Investor feedback is given after major
investment roadshows, the results of
which are discussed by the Board.
• The Chairman undertook his annual
engagement programme with major
shareholders, discussing governance
and sustainability matters and shared
feedback with the Board.
• Shareholder analysis is presented
at each Board on key shareholder
movements and trends.
• Market analysts cover Softcat,
providing their analysis of
performance and expectations
on future performance to current
and prospective investors.
Furtheranalysts have started their
coverage on Softcat in the last year.
Any key updates from the analysts are
summarised by the CFO to the Board.
• The Chair of the Audit Committee
reached out to major shareholders
onSoftcat’s annual audit plan.
Key topics of engagement
• Strategy
• Company performance
• Corporate governance
• Executive Director remuneration
• Sustainability
Outcomes
The Board reviewed, approved or
endorsed outcomes, including:
• An in house Head of Investor
Relations resource was appointed
to better support the Executive
Directors with their investor
engagements. This better supports
working with a greater number
ofanalysts who cover Softcat.
• Each year, the Board reviews its
capital allocation framework which
deﬁnes priority areas for investment.
The framework is closely associated
with the dividend policy approved
by the Board on the return of cash
to shareholders by way of dividend
payments. During the year, the
Board approved the operation of the
framework and the policy. The ﬁnal
and special dividend for the year
proposed by the Board is explained
on page 103.
• Feedback from investors/analysts
on Group performance and on
our strategy.
• A better understanding of
investor expectations in respect
ofcorporategovernance.
• Additional disclosures in the Annual
Report to support our investors’
understanding of the business.
• The Board welcomed as a metric the
high level of shareholder support
received on each resolution at
the 2023 AGM.
50 Softcat plc Annual Report and Accounts 2024
Employee engagement
Trusted, empowered
and engaged
Introduction
The Non-Executive Directors (‘NEDs’)
ofthe Board value the opportunity to
engage directly with Softcat’s employees,
as this adds a further opportunity to
bring the voice of the workforce directly
into the Boardroom. Our culture is at
theheart of our success and direct
engagement brings us additional insight
and perspective on our culture and on the
matters which our employees consider
tobe important. Our engagements
aretwo-way, and we provide plenty
ofopportunities for employees to seek
answers and views from our perspective.
Review of NED workforce
engagement process
For a number of years, the Board has
operated an engagement process which
involved the Board visiting one selected
Softcat ofﬁce each year outside of the
usual Board meeting venues of Marlow
or London. The process was reviewed
aspart of last year’s Board effectiveness
evaluation and it was agreed that
engagement could be improved by
visiting more of our ofﬁces. This is
particularly relevant given the ongoing
growth of the business. FY2024 saw the
introduction of a new method of NED
engagement with the workforce. Each
NED agreed to be allocated either one
or two Softcat ofﬁces to ‘sponsor’, with
the minimum engagement required
being one annual session with their
designated ofﬁce. This change of
approach means that every Softcat
ofﬁcehas at least one NED engagement
eachyear.
A consistent and overarching theme
was the overall positive feel for working
atSoftcat, afﬁnity to our culture and
lovingthe ‘buzz’ in our ofﬁces.
Vin Murria
Designated Non-Executive Director for Workforce Engagement
Leading the evolution
Read more onpages 12 to 15
Section 172 – stakeholder engagement
Read more onpages 42 to 49
People
Read more onpage 53
51Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
NED workforce engagements
A ﬂexible approach was taken for each
local ofﬁce engagement, to best suit
theneeds of the individual ofﬁce. The
general format involved a NED holding
an engagement session with local ofﬁce
management teams and, given the
importance of good culture to the
successof our business, there were often
engagements with local representatives of
our culture teams. Some ofﬁces have used
the engagement to hold further NED
sessions to deepen those relationships.
The key themes arising from the workforce
engagement sessions included:
• Our employees tell us that they
loveworking at Softcat, particularly
in relation to people and culture.
Aconsistent and overarching theme
was the overall positive feel for
working at Softcat, afﬁnity to our
culture and loving the ‘buzz’ in our
ofﬁces. Employees continue to feel
trusted, empowered and engaged.
• Challenges as the business continues
to grow were discussed, in particular
how this impacted on certain roles
and on the ability to effectively
collaborate across functions.
• Employees provided their views on
the best opportunities and resources
needed to further grow the business.
• The impact of macro-economic
uncertainties (as described elsewhere
in this Annual Report) persists for
some, for example through cost
ofliving pressures.
• We are investing in upgrades to
several core IT systems and more
internal communications on this
would be appreciated.
• There was very positive feedback
on our induction, training and
sales development programmes.
Suggestions were made that more
training for leadership development
would be helpful.
The NEDs were familiar with the vast
majority of the topics raised in the
engagements. This reﬂects the
high-quality and relevant regular
discussions at the Board on matters
suchas employee engagement, and
ongoing potential challenges to our
culture as the business scales and on
thegeneral performance of the business.
Outcomes and next steps
The NEDs discussed their engagement
feedback at a meeting of the Board and
a number of actions were agreed. Some
of the actions will be addressed during
our Board discussions whilst others have
been rolled into the annual employee
satisfaction survey action plan.
Feedback has been provided to local
ofﬁce management by the Chief People
Ofﬁcer, who helped to support the
overall engagement process.
The NEDs agreed that the process this
year had been highly effective and had
been successful in ensuring that NEDs
remain well informed about the employee
views across the business. The local
ofﬁces also appreciated the direct
engagement of a Board member. Both
the NEDs and local ofﬁces are keen to
continue working in this way for FY2025
and the next round of workforce
engagement sessions will be planned
indue course.
In addition to the ofﬁce sponsorship role,
NEDs also have opportunities throughout
the year at several Board meetings to
interact with high-potential employees
featured on Softcat’s succession plan.
Further meetings will be planned
forFY2025.
I would like to thank each NED for their
energy and commitment in making this
revised engagement process a great
success. As explained elsewhere in this
report, I will retire from the Board at the
conclusion of the Annual General Meeting
in December 2024. Lynne Weedall
willsucceed me as the Designated
Non-Executive Director for Workforce
Engagement and I have no doubt she
willcontinue to ensure we have an
effective engagement process.
Vin Murria
Designated Non-Executive Director
forWorkforce Engagement
52 Softcat plc Annual Report and Accounts 2024
Social value
Evolving our responsible business
This report covers our approach to sustainability and also howweactin
aresponsible manner.
Highlights
• Continued improvement in diversity
across the business
• Market-leading employee
engagement results
• Non-Executive Directors of the Board
engaged directly with each Softcat
ofﬁce during the year
• Highly rated as one of the very best
places to work
• Further employee training and
increased awareness of the
importance of climate-related issues
• Completed our solar panel project
atthe Marlow head ofﬁce
• We continue to progress work on our
Climate-related Financial Disclosures
• All of Softcat’s scope 1, scope 2 and
operational scope 3 emissions for
FY2024 will be offset
• Our climate emissions data has been
externally assured for the ﬁrst time,
improving trust in this increasingly
important business metric
• Softcat maintains its obligations
to pay the right amount of tax as
required by legislation and made
asigniﬁcant tax contribution to the
UK economy of £180m for the year
Our people
Diversity as at 31 July
Gender breakdown
Board of Directors
Female: 62.5%
Male: 37.5%
Female: 57%
Male: 43%
Female: 57%
Male: 43%
Female: 50%
Male: 50%
2024 2023 2022 2021
Senior Leadership Team
Female: 40%
Male: 60%
Female: 33%
Male: 67%
Female: 22%
Male: 78%
Female: 20%
Male: 80%
2024 2023 2022 2021
Total permanent employees
Female: 36%
Male: 64%
Female: 35%
Male: 65%
Female: 33%
Male: 67%
Female: 33%
Male: 67%
2024 2023 2022 2021
Ethnicity breakdown
Total permanent employees
Ethnic: 17%
White British and
white other: 83%
Ethnic: 17%
White British and
white other: 83%
Ethnic: 15%
White British and
white other: 85%
Ethnic: 13%
White British and
white other: 87%
2024 2023 2022 2021
53Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
People
Introduction
Softcat was founded over 30 years ago
to create a great place to work. Our
founder felt strongly that a company
where people enjoyed coming to work
would be more successful and for that
reason, he instilled values of having
fun,giving back to charity and being
passionate about what we do. All of
those values remain as strong as ever
today. We are continually striving to stay
true to the founder’s original vision of
Softcat’s culture, whilst also evolving
andenhancing it in line with modern
ways of working.
The last twelve months have seen great
progress in many of Softcat’s people
andculture initiatives. Our diversity and
inclusion agenda continues to go from
strength to strength, resulting in several
industry-wide awards. Employee
engagement has stayed at exceptionally
high levels and the external awards
wehave received this year reﬂect our
ongoing work in this space and tell us
that our employees really enjoy working
at Softcat, true to our founding values.
Recruiting for the future
Softcat continues to grow headcount at
pace, as seen by the addition of 458 new
starters this ﬁnancial year. Overall attrition
has been positive, losing approximately
the same number of employees as in the
previous ﬁnancial year despite having
much higher headcount. We are pleased
withwhere net headcount has ended for
theﬁnancial year and believe it sets us
up well for further growth in FY2025.
Looking at recruitment through a
diversity and inclusion lens, we have
seen improvements in attracting
womeninto apprenticeship and internship
programmes, demonstrating that the
work we do at grassroots level with local
schools makes a signiﬁcant impact on
our early careers diversity. This year,
wealso asked a third-party specialist
consultancy to undertake an audit on
our recruitment processes for disabled
candidates so we can comprehensively
assess what could be done to improve
theengagement and support at the
recruitment stage for people with
disabilities. That audit has resulted in
anaction plan that includes improvements
being made tomarketing materials,
ourcareers website and our selection
processes. Our recruitment team
ismaking good progress on the
actionplan.
Current female representation sits at 36%, so
wehave restated our 2030 ambition to be 40%,
well above the current UK technology industry
average of 27%.
Watch us grow – this
yearwe reached over
2,500 employees
Employees as at 31 July 2024
2,509
2,509
2,315
1,921
1,681
1,534
24
23
22
21
20
1,330
19
1,188
18
54 Softcat plc Annual Report and Accounts 2024
Social value continued
Evolving our inclusive workplace
We are very pleased to say that
our ambition of reaching 35%
female representation by 2030
has already been surpassed.
Current female representation
sits at 36% and so we have
restated our 2030 ambition to
be 40%, well above the current
UK technology industry average
of 27%. Improvements to
ﬂexible working, menopause,
fertility and maternity policies
and practices have all contributed
to our female employees’
experience ofworking
at Softcat.
Our ethnic representation has remained
constant at 17%, which is in line with
theUK and slightly ahead of the UK
technology industry average of 15%.
Weare still concerned that this is not
reﬂected in management and leadership
levels and more work needs to be done
in this area. A deep dive into the reasons
our ethnic minority employees are less
likely to be in management roles will be
undertaken in FY2025.
A survey conducted across the
workforce to identify key characteristics
such as sexuality, neurodiversity and
socio-economic background, has given
us more insight into the composition of
our workforce. We will be using this data
to consider further improvements to our
policies and initiatives.
Our seven employee diversity networks
have had a fantastic year hosting and
celebrating several signiﬁcant events
such as Pride Month and Armed Forces
Week. In collaboration with our major
partners, TD Synnex and Microsoft, we
held an event celebrating our community
leads at the Museum of London. The
event included discussions on ESG
strategy and concluded with a cooking
class at School of Work, where meals
were prepared and donated to local
homeless charities in London.
We are continuing to run our allyship
training programme. The programme
helps employees to further develop and
explore diversity, inclusion and belonging
at work and to be a greater allies through
committing to making a difference by
supporting fellow colleagues. All new
starters are encouraged to attend the
programme within six months of starting
at Softcat to ensure they have a full
understanding of our approach to allyship
across the business. We also run a
programme designed for managers,
Inclusive Cultures. This aims to help
managers build moreinclusive teams
andprovides anopportunity to further
focus on the managerial behaviours to
ensure everyone is valued and treated
with respect.
In addition to our internal or partner
initiatives, Softcat participates in and
contributes to several industry
programmes that aim to diversify the
technology sector as a whole. We are a
founding member of both Technology
Channel for Racial Equality (‘TC4RE’) and
Tech Channel Ambassadors (encouraging
young people to consider the IT channel
industry for their futurecareers).
Softcat’s work in the diversity and
inclusion space does not go unnoticed
at an industry level. This year, we won
several awards and accolades for our
policies and practices at the CRN
Women & Diversity in Channel awards
and ranked 1st in the Super Large
category for the UK’s Best Places to
Work for Women.
We are determined to ensure that we are
a fair and inclusive organisation that is
committed to being transparent about
our gender and ethnicity pay. Our gender
pay gap was once again published
alongside our voluntary ethnic pay gap.
We continue to monitor the latest
developments from the Government
sothat we can respond quickly to any
further pay gap reporting that may be
introduced. The data in our pay gaps
continues to be very consistent, with
both gaps driven inlarge part by the
small proportion of high-earning women
and ethnic minority employees in sales.
Although we are trying to address thisby
hiring more women and ethnic minority
employees into our early careers
schemes, the adoption of this strategy
will take some timeto show results.
Our latest pay gap report is available
onour website and can be viewed by
scanning the QR code with your tablet
orsmartphone.
ESG in our workforce
Our focus on the social aspects of ESG
has been a major area of improvement
this year. For example, we have taken
strides to improve employability and
awareness of careers in technology and
our industry within schools, especially
for pupils from low socio-economic
backgrounds. As early careers talent
hasproved so crucial to our success
asabusiness, we ﬁrmly believe in the
importance of giving back to these
communities by providing a range of
opportunities from work experience to
apprenticeships and career guidance.
Softcat continues to be a signatory
totheSocial Mobility Pledge, further
demonstrating its ongoing commitment to
social mobility. The pledge encompasses
three main areas: outreach, access
andrecruitment.
Health and wellbeing remains core to
our work this year. Our two Health and
Wellbeing weeks continue to feature
awide range of activities designed
toensure our employees are putting
themselves ﬁrst and prioritising
theirwellbeing. We have had talks
byOlympic athletes, ﬁtness classes,
seminars promoting ﬁnancial health
andmuch more.
From a mental health perspective, we
have been pleased to note the uptake
ofour employee assistance programme
(‘EAP’) is in line with other companies of
our size and can see from the anonymous
data that employees are contacting the
EAP for a wide range of issues both
inside and outside of work. We have
continued with our regular training
sessions for managers on how to manage
employees with different mental health
issues. We use both World Mental Health
Day and Mental Health Awareness Week
as the two main events in the calendar
toraise awareness and talk about the
importance of mental health.
More recently, we have been working
onthe introduction of a new social value
platform that will enable us to calculate
the social value of our work in terms of
environmental, social and economic
contributions. This will not only help us
assess our own impact but also provide
us with more comprehensive and
accurate information for customer
bidsand tender processes.
55Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Company culture at Softcat plc
The employee experience below at Softcat plc, compared to a typical company.
91% of employees at
Softcat plc say it is a great
place to work*, compared
to 54% of employees at a
typical UK-based company.
98%
agree that people
aretreated fairly
regardless of their
sexual orientation.
98%
agree that this is a
physically safe place
towork.
97%
agree that people
celebrate special events
around here.
96%
agree that people
hereare treatedfairly
regardless of their race.
96%
agree that when
youjoin the company,
you are made to
feelwelcome.
Source: Great Place to Work Survey 2024
https://www.greatplacetowork.co.uk/certiﬁed-company/1224092
The more I see of other
companies via friends,
colleagues/peers and
family, the more I am
grateful for how well
wedo culture and treat
people and it’s not an
empty statement... we
can back it up!
Although the culture
has evolved, in some
ways positive and
someways negative,
Ido feel that we are
still a people-ﬁrst
organisation andthat
the Senior Leadership
Team ‘getsit’. Everyone
wants everyone to
succeed – this is the
beauty ofSoftcat.
Responses from our latest annual
employee engagement survey
Maintaining high levels
ofemployee engagement
The annual employee satisfaction survey
was conducted in October 2023 and
resulted in an overall employee
engagement score of 90%, with an
employee net promoter score (‘eNPS’)
score of59. These world-class results
show theimportance we place on
keeping ouremployees engaged in their
roles and with Softcat as their employer.
Our employee satisfaction survey action
plan is a rolling plan and quarterly
updates are provided to the Senior
Leadership Team (‘SLT’). The actions
wehave taken are also disclosed to
employees on our regular all-hands calls.
Another regular survey we conduct is
thequarterly management survey,
whichis sent to all 400 members of the
management team. They are asked a
short series of questions designed to
give us a pulse on morale and sentiment
within the organisation. Additionally,
they are asked to rate every member
ofthe SLT. The feedback is discussed
atsubsequent management meetings
with clear actions outlined.
The Softcat Board discusses the
outputof the management survey on a
quarterly basis and the overall employee
engagement survey on an annual basis,
with regular updates provided on speciﬁc
items throughout the year. The importance
of employee engagement as a key metric
at Board level is demonstrated by the
useof the eNPS metric in the Executive
Directors’ annual bonus.
Externally, we had a successful year in
FY2024, winning several employer-related
awards as well as awards from our valued
partners. A snapshot of these awards can
be seen on page 56.
Softcat plc 91%
Typical company 54%
* Responses to the statement ‘Taking everything into
account, I would say this is a great place to work.’
vs.atypical UK company.
56 Softcat plc Annual Report and Accounts 2024
Social value continued
Softcat – a great place to work
In addition to celebrating our
externally recognised success,
wealsolove to celebrate success
internally. Our Employee of the Month
awards are eagerly anticipated, with
our Lunch of the Quarter awards
beinga popular event in the Softcat
calendar. Our Kick Off event every
September is the highlight of the
annual calendar, with the whole Group
coming together to reﬂect on the
highlights of the previous yearand
look forward to the future. The annual
awards ceremony held atKick Off
celebrates our superstar employees
intrue style.
#5
Best Workplaces™
2024 (Super Large)
#5
Best Workplaces™
for Wellbeing 2024
(Super Large)
#1
Best Workplaces™
for Development
2024 (Super Large)
#1
Best Workplaces™
for Women 2024
(Super Large)
57Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Learning and development
Softcat has a dedicated learning and
development team, providing a
comprehensive range of career and
personal development support, giving
our employees the best opportunities to
learn, grow and successfully adapt to any
changes in their role. Our commitment
to developing and nurturing our
employees in their careers continues
tobe of utmost importance. A large
proportion of our new starters every
year are school and university leavers,
which means that our early careers
training programmes are vital in
inducting them into the Group in a way
that sets them up for future success.
In addition to our regular apprenticeship
programme, we have started to increase
the number of employees undertaking
upskill apprenticeships. This is in an
embryonic stage at the moment, but
ourﬁrst employees have now graduated
with a range of qualiﬁcations from
management capabilities to data analytics
skills. We will look to further increase
ouruse of the Apprenticeship Levy by
encouraging more employees to take
advantage of upskill apprenticeships.
This year, we have introduced an
operations development programme
into the business operations function,
which has provided clearer development
and progression paths and resulted in
better employee retention.
Our sales training is always undergoing
evaluation and improvements. The
feedback on our sales development
programme and Elevate, for more
experienced salespeople, continues to
be incredibly positive. Statistically, we
know that employees who complete
these programmes outperform those
who do not.
Our leadership foundations programme
(for mid-level managers) and our
leadership development programme
(for senior-level managers) saw new
cohorts successfully complete this year.
These programmes have gone from
strength to strength over the years and
are now ﬁrmly cemented as our ﬂagship
leadership programmes. Uniquely, the
leadership development programme is
delivered by our own Senior Leadership
Team, providing real-world insight and
added value to the participants.
Charitable causes
andvolunteering
Softcat strives to be an ethical and
responsible place to work supporting
allour stakeholders, including our
communities. We have a dedicated
charity team which is responsible for
managing fundraising at Softcat, with
representatives from across the business
providing input and representation.
FY2024 was a fantastic year for Softcat’s
charitable endeavours. We raised over
£540k (2023: £470k) for charitable
causes, including an impressive £405k
atour most successful ever Love2Give
charity ball (2023: £389k).
Our Love2Give programme continues to
promote the importance of giving back
through two Company-given employee
volunteer or fundraising days each year.
Softcat’s charity team has redesigned
the Love2Give programme to make
iteasier and more practical for our
employees to support various charities
and fundraising.
Charitable donations to date since
Softcat was formed as a business now
stands at a remarkable £3.1m.
£3.1m
in charitable donations to date
58 Softcat plc Annual Report and Accounts 2024
Ethical behaviour
As the UK’s largest value-added
reseller, it is important that we
meet and exceed the expectations
of our customers, vendors and
shareholders to uphold high
standards of corporate and
personal behaviour. We recognise
the importance of good ethics to
maintain a positive environment
for both our employees and the
business and we aim to meet all
our legal obligations. Weuphold
our values (see page 23), which
are fully aligned to good ethical
behaviour, and our culture
empowers our employees
to promote and support the
business in a customer-focused
and ethical manner.
In addition to a number of formal
policies which operate within our
business, our Employee Handbook
(which is our Code of Conduct) also
summarises some of the key expectations
and behaviours we expect from all Softcat
employees and those who work on
behalf of Softcat. Our policies and our
Employee Handbook help to provide a
framework for all employees to comply
with relevant laws, to behave in an ethical
manner and to respect the rights of our
employees and other stakeholders of
the business. Senior management
regularly reviews our key policies and
updates them to make sure they remain
relevant and up to date and that they
continue to provide the right guidance
for employees. ‘Responsibility’ is one
ofSoftcat’s core values and this helps
tounderpin our approach to good
ethics. Employees recognise that their
actions, attitude and choices matter
forour key stakeholders.
We are conscious that potential human
rights risks exist within any business
andsupply chain, including labour risks,
unsafe workplace conditions and bribery
and corruption. We therefore continue
to be compliant with the annual reporting
requirements contained within Section
54 of the Modern Slavery Act 2015,
being a relevant commercial organisation
as deﬁned by Section 54. Our approach
to preventing modern slavery forms part
of our wider corporate responsibilities
and we expect organisations with whom
we do business to adopt and enforce
policies to comply with relevant legislation.
We review the public disclosures of
ourlargest vendors in respect of their
practices to mitigate the risk of modern
slavery to ensure they align to our values.
We produced an updated Modern Slavery
Statement this year, which is available on
our website. We also provide additional
disclosures if requested in respect of
modern slavery and other matters in
respect of corporate responsibility when
bidding for large public sector contracts.
We do not currently operate a speciﬁc
human rights policy as most of our
business is focused in the UK and in
jurisdictions where human rights are
wellobserved and already protected.
Management will, however, keep under
review whether operating such a policy
would be beneﬁcial.
Softcat is aware that fraud is a constant
threat which can have a considerable
impact both for our business and for
ourstakeholders. We realise a key part
of good anti-fraud management comes
from good awareness of the types of
fraud which might be perpetrated.
Employees have received training on
fraud awareness in order to continue
protecting our business and important
stakeholders such as our customers.
TheAudit Committee also receives
regular reports from management on
steps taken to detect and prevent any
fraudulent attempts and exercises
oversight to ensure that robust anti-fraud
controls are in place. Management is
also well prepared for the business to
comply with the new corporate offence
of a failure to prevent fraud, which was
introduced in the recent Economic
Crime and Corporate Transparency Act.
We operate a Speak Up hotline for
allemployees to widen employees’
channels for raising any issues they may
encounter. This provides our employees
with an externally provided, secure and
conﬁdential channel to voice issues, in
addition to internal channels already
available. Employees may use this
channel to raise issues anonymously
should they choose.
Social value continued
59Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
£180.4m
£176.4m
2024
2023
We have a detailed anti-bribery, corruption
and tax evasion policy, which is regularly
reviewed by management to ensure it is
comprehensive, relevant and practical.
Employee training is provided where
appropriate, including at induction for
new starters. The anti-bribery, corruption
and tax evasion policy provides that we
take a zero-tolerance approach to bribery,
corruption and tax evasion and that we
are committed to acting professionally,
fairly and with integrity in all our dealings.
The policy also sets out the types of
behaviour which are unacceptable in the
conduct of business and the procedures
we have to prevent bribery, corruption
and tax evasion. We also operate a
register which requires all employees
toseek approval from their line manager
and to disclose any gifts or hospitality
received or given which are valued over
the applicable disclosure threshold.
Guidance on accepting or giving gifts
and hospitality is contained in the
anti-bribery, corruption and tax evasion
policy and the gifts and hospitality register
is reviewed regularly by management.
Ifemployees have any questions about
the operation of the policy or the gifts and
hospitality register, they are encouraged
to discuss this with either the Legal
Director & General Counsel or the
Company Secretary.
Softcat publishes twice-yearly details
ofits payment practices to its trade
suppliers. This is reviewed by the Board
during the year as part of the Directors’
wider responsibilities to consider how
Softcat impacts its key stakeholders.
Wetake these responsibilities seriously
and the Board noted during the year that
management continued to maintain a
good performance in respect of invoices
paid within agreed terms.
Tax contributions
Corporation tax: £40.2m
Employment taxes: £68.9m
VAT: £67.1m
Other rates/taxes: £4.2m
Corporation tax: £29.8m
Employment taxes: £63.9m
VAT: £80.1m
Other rates/taxes: £2.6m
The Group adopts an open and honest
relationship when dealing with
Government agencies. For example,
during the year the Board approved an
update to Softcat’s tax strategy, which is
published on our website (www.softcat.
com/corporate-responsibility). The tax
strategy includes an outline of our
approach to dealing with HMRC and
conﬁrms that Softcat’s primary tax
objective is to ensure that it pays
theright amount of tax, in the right
jurisdiction, at the right time, as
dictatedby legislation.
Softcat’s ongoing strong ﬁnancial
performance also contributes to the
UKeconomy. In the 2024 ﬁnancial year,
our total tax contribution to the UK
economy was £180.4m (FY2023: £176.4m).
This includes corporation tax, payroll
taxes, VAT and other business rates and
taxes. In the last four years, Softcat’s total
tax contributions to the UK economy
have exceeded £0.5bn.
60 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability
Environment, climate change
andClimate-related Financial
Disclosures (‘CFD’)
We remain committed to take action on greenhouse gas (‘GHG’) emissions,
as explained below.
Introduction
This section explains our
approach to sustainability
and includes the disclosures
required by the UK’s Companies
(StrategicReport) (Climate-related
Financial Disclosure) Regulations
2022 (‘UK CFD’).
Last year’s Annual Report
primarily focused on our
progress against the disclosures
required under the Task Force
on Climate-related Financial
Disclosures (‘TCFD’) framework.
InDecember 2023, the TCFD
was disbanded following the
publication of its ﬁnal status
report, and the Financial Stability
Board (‘FSB’) requested that
the International Sustainability
Standards Board (‘ISSB’) assume
responsibility for monitoring
progress of climate-related
ﬁnancial disclosures by
companies. Whilst we wait for
the UK Government totake its
next steps on adopting new
Sustainable Disclosure Standards
(‘UKSDS’) based on the ISSB,
which are anticipated in 2025,
we have focused ourprogress
this year on aligning to the
mandatory requirements
fromthe UK CFD.
Our disclosures are also in
line with the requirements
ofthe Listing Rules published
by theUK’s Financial
ConductAuthority.
We remain dedicated to ensuring
that our success is strongly aligned
withour corporate responsibility
values. We continue to make
changes within thebusiness to
support our approach toclimate
change and have increased
collaboration with our partners
and supply chain, all of which
will aid ourcustomers on
theirpath to make sustainable
purchasing decisions. TheBoard
has ultimate responsibility
formaintaining relationships
with Softcat’s stakeholders and
we have formally delegated
authority to our Sustainability
Committee to provide the
required focus on this aspect
ofourbusiness.
Softcat is a constituent ofthe FTSE4Good
IndexSeries – an index ofcompanies that
demonstrate strong environmental, social
and governance practices, measured
against globally recognised standards.
To ﬁnd out more about what we are doing
onsustainability, please see our website at
www.softcat.com/about-us/sustainability.
This can also be viewed by scanning the
QRcode with your tablet orsmartphone.
61Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Key sustainability highlights and progress
Whilst we wait for the UK Government to take
itsnext steps on adopting new Sustainable
Disclosure Standards (‘UK SDS’) based on the ISSB,
which are anticipated in 2025, we have focused our
progress this year on aligning to themandatory
requirements from the UK CFD.
Softcat’s net zero targets have been approved by the Science Based
Targets initiative (‘SBTi’). Softcat was the ﬁrst IT reseller in Europe to
receive this.
We are making steady progress towards full compliance with
the UK’s mandatory Climate-related Financial Disclosures
(‘CFD’)requirements.
We remain committed to take action on greenhouse gas (‘GHG’)
emissions. Our sustainability efforts have been recognised
throughout our industry. We have, for the ﬁrst time, obtained
independent external assurance on our emissions data. During the
year, Softcat hosted its ﬁrst in-person sustainability session at the
Softcat Partner Forum. The event brought together industry experts
to discuss a collective vision and expectations and to emphasise
the need for stronger partnerships on our sustainability journeys
within the IT resale channel.
The head ofﬁce solar panels project completed during the year
and is now providing asubstantial contribution towards the ofﬁce’s
energy requirements.
62 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Action on climate change
Climate change is having an impact on
our planet and we have a role to play to
mitigate our contribution to that impact.
The Board recognises that climate
change has potential business and
ﬁnancial impacts; these include both
risks and opportunities for Softcat and
itis our responsibility to lessen and
takeadvantage of these, respectively.
We have taken steps to make our business
more resilient to climate change and
wecontinue to focus on the ambitious
environmental targets that the Board
approved in 2020.
The Board fully supports the adoption
ofthe UK Climate-related Financial
Disclosures (‘CFD’) as it considers that
they will help organisations and Softcat’s
stakeholders to focus their efforts and
ambitions towards achieving net zero.
Enhancing our understanding of the
climate-related risks facing us and the
opportunities that may be available to
Softcat continues to be a focus.
The following disclosures are aligned
tothe four thematic areas of the CFD:
governance, strategy, risk management,
and metrics and targets. We have
provided a summary of our compliance
against the recommended disclosures
with a reference table detailing where
disclosures are located throughout
thereport.
As we learn more about climate science
and projections become clearer, we
willcontinue to reﬁne our approach to
identifying, assessing and managing
ourclimate-related ﬁnancial risks and
opportunities. We will do this each year to
ensure we are resilient and prepared for
reporting, in addition to renewing any
detailed climate scenario analysis at least
every three years to ensure the information
is both up to date and relevant.
In 2022, we also undertook an ESG materiality assessment, which included both
surveys and interviews, to better understand which ESG issues matter most.
Employees, customers, suppliers and vendors participated in the materiality
assessment, making sure theviews of key stakeholders had been considered.
Theoutputs from the materiality assessment helped to conﬁrm our areas of focus.
Achieve gender equality and empower
allwomen to achieve their goals.
Promote sustained, inclusive and sustainable
economic growth, full and productive
employment and decent work for all.
Reduce inequality within and among countries.
Ensure sustainable consumption and
productionpatterns.
Take urgent action to combat climate change
andimpact.
Strengthen the means ofimplementation
andrevitalise the global partnership for
sustainable development.
Approach to sustainability
In order to make sure we considered the right aspects, we started our journey by
identifying the most relevant areas of the United Nations Sustainable Development
Goals (‘SDGs’) for our business. These areas have not changed since last year and
remain an important foundation for our approach on climate change and wider
corporate responsibility:
63Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Key activities in FY2024
Governance/
strategy
The Board held a direct stakeholder engagement with one of its largest vendors (by revenue).
Thediscussion focused on a wide variety of issues and the Board also took the opportunity to
understand the impact of key technology trends on the vendor’s journey to net zero.
Strategy
The Sustainability Committee conducted a review of the ESG governance framework within the
business, which concluded that the framework was working well. Changes were made in respect
ofaninternal working group to more closely bring together the senior managers involved with all
keyelements of ESG.
The Board once again considered sustainability and climate-related matters as part of its annual review
of Softcat’s business strategy. Thisresults in a more joined-up approach to the resilience of Softcat’s
strategy to climate change and further opportunities for sustainable growth. Particular points of focus
this year were on the importance ofsustainability to customers and further evaluating the
opportunities of the IT circular market.
We undertook a second ﬁnancial impact assessment of our climate-related risks and opportunities,
building on our previous work and improving our understanding of risks and opportunities facing
Softcat over the short, medium and long term. We made improvements to thegeographical scope
ofour climate scenario analysis in relation tophysical risks by conducting a more accurate assessment
of the potential impacts to our key sites based on climate hazard data extracted using geographical
co-ordinates. This improves the accuracy of the results and has thereby allowed us to reﬁne some
ofour previous ﬁndings. A summary of the process and results is provided on pages 71 to 73.
Softcat hosted its ﬁrst in-person sustainability session at the Softcat Partner Forum. The event brought
together industry experts to discuss a collective vision and expectations and to emphasise the need
forstronger partnerships on our sustainability journeys within the IT resale channel. Given the success
of the session, we intend to repeat this at future Partner Forums.
Softcat also earned external recognition for its environmental initiatives and sustainability efforts, as
summarised on page 79.
Risk management
We further reﬁned our methodology for prioritising climate-related risks and opportunities, allowing
usto focus on those risks and opportunities that present the highest potential to impact Softcat.
Pleasesee pages 71 to 75 for more information.
We continued to mature our risk management framework and approach. Our Group risk and
compliance team has been working on formalising our second and third lines of defence, including
support on our risk register for climate change. The process will also lead to strengthening our internal
processes and clariﬁcation of responsibilities and accountabilities.
Metrics and targets
The annual bonus plan for Executive Directors includes a non-ﬁnancial element which included the
achievement of key next steps onclimate change. This is further explained in the Annual Report on
Directors’ Remuneration on pages 125 to 146. The Remuneration Committee has decided to include
sustainability as part of the non-ﬁnancial metrics in the annual bonus plan for FY2025.
We continue to develop our opportunity metrics to take advantage of the move to a lower-carbon
world.Key to this is ensuring our workforce understands key climate change issues. The vast majority
ofemployees have completed training on climate change. We are developing more bespoke training on
sustainability for our sales teams, to better enable them to help customers in making sustainable choices.
Our sustainability team continues to review and better understand the opportunities relating to the
IT‘circular economy’ and other opportunities to increase the focus on more sustainable products and
services to sell to our customers. Actions required to realise the opportunities are being developed.
Inorder to fully realise the potential, we will need the support of other stakeholders, including
vendors.During the year, an updated assessment of the current state of the IT circular market and
potential opportunities was discussed by the Sustainability Committee. Opportunity metrics will
befurther developed.
Our overall reported greenhouse gas emissions and energy consumed for FY2024 are shown on
page82). These includes explanations for year-on-year changes in reported emissions.
64 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
TCFD cross-reference and compliance table
Our disclosures are as required by the Companies (Strategic Report) (Climate-related Financial
Disclosure) Regulations 2022 (‘UK CFD’). They also meet therequirements of the Financial Conduct
Authority’s (‘FCA’) Listing Rule 6.6.6R (formerly 9.8.6R) in respect of the original 2017 recommended
disclosures from the Task Force on Climate-related Financial Disclosures (‘TCFD’). We have concluded
that we fully comply with nine of the eleven recommended disclosures, as set out below, and are
making progress on the remaining two disclosures.
In the table below we cross-refer to where the disclosures, in relation to the UK CFD and Listing Rule 6.6.6R, are in this
AnnualReport, or provide reason for non-compliance. We plan to continue improving our compliance with these disclosures.
Thematic area
UK CFD
requireddisclosures
FCA Listing Rule 6.6.6R –
TCFD recommended disclosures
Cross-reference
(withinthis Annual
Report) orreason
fornon-compliance Comments and next steps
Governance
A description of
thegovernance
arrangements of the
Company in relation to
assessing and managing
climate-related risks
andopportunities.
1) Board oversight of
climate-related risks
andopportunities.
(Pages 66 and 67)
Compliant
The Sustainability Committee monitors
climate-related risks, opportunities and
disclosures andreports to the Board.
2) Management’s role in
assessing and managing
climate-related risks
andopportunities.
(Pages 66 and 67)
Compliant
The CFO is the executive lead
forsustainability, supported by the
Business Transformation Director and
our sustainability team. As explained
inthis report, they form part of a
comprehensive governance framework
tomanage climate change risks and
opportunities. Wewill continue to
develop the roles and responsibilities
onthe management of climate-related
issues across Softcat.
Strategy
A description of (i) the
principal climate-related
risks and opportunities
arising in connection
withthe operations of
theCompany and (ii) the
time periods by reference
to which those risks
andopportunities
areassessed.
3) Climate-related risks
andopportunities the
organisation has identiﬁed
over the short, medium
andlong term.
(Page 69)
Compliant
This year, we have refreshed our original
scenario analysis in respect of the climate
change risks and opportunities identiﬁed.
We have also undertaken a ﬁnancial
impact assessment of our climate-related
risks and opportunities, which was
furtherreﬁned this year, to improve
ourunderstanding and management
oftherisks and opportunities.
A description of the
actual and potential
impacts of the principal
climate-related risks and
opportunities on the
business model and
strategy of the Company.
4) Impact of climate-related
risks and opportunities
onthe business, strategy
and ﬁnancial planning.
(Pages 69 and 70)
Compliant
Through our climate scenario analysis,
no material or catastrophic net risk
exposures have been identiﬁed in the
time horizons assessed. We have
integrated climate-related planning into
our key strategic planning. In particular,
during the year we considered
sustainability and opportunities totake
advantage of the IT circular economy as
part of our annual Board strategy review.
An analysis of the
resilienceof the business
model and strategy of
theCompany, taking into
consideration different
climate-related scenarios.
5) Resilience of strategy, taking
into consideration different
future climatescenarios.
(Pages 69 and 70)
Compliant
Through our climate scenario analysis
ofrisks, mitigating actions and potential
opportunities, we believe our business
isresilient to climate change in the time
horizons assessed. We continue to
review how climate change may impact
ourstrategy.
65Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Thematic area
UK CFD
requireddisclosures
FCA Listing Rule 6.6.6R –
TCFD recommended disclosures
Cross-reference
(withinthis Annual
Report) orreason
fornon-compliance Comments and next steps
Risk
management
A description of how
theCompany identiﬁes,
assesses and manages
climate-related risks
andopportunities.
6) Processes for identifying
andassessing
climate-related risks.
(Page 76)
Compliant
We undertook ﬁnancial impact
assessments of our climate-related risks
and opportunities in both FY2023 and
FY2024, improving our understanding
and management of them. As we look
tocontinue our growth, evolve our
offerings and work further with our
supply chain, we will increase our level
ofknowledge on climate-related risks.
7) Processes for managing
climate-related risks.
(Page 76)
Compliant
We explain in our assessment of
climate-related risks the mitigating
actions which we can take or have
taken.Through the ﬁnancial impact
assessments, we have improved our
understanding and management of our
climate-related risks and opportunities.
A description of how
processes for identifying,
assessing, and managing
climate-related risks
areintegrated into the
overall risk management
process in the Company.
8) Processes for identifying,
assessing and managing
climate-related risks
integrated into the
organisation’s overall
riskmanagement.
(Page 76)
Compliant
We have conducted climate risk
workshops to identify risks. Our process
for assessing the materiality of our
climate-related risks is consistent with
the process for other corporate risks,
which supports with incorporating these
issues into our day-to-day risk management
processes. We will continue to monitor
and manage our climate-related risks
and ensure that each risk is monitored
and managed appropriately.
Metrics
andtargets
The key performance
indicators used to assess
progress against targets
used to manage
climate-related risks and
realise climate-related
opportunities and
adescription of the
calculations on which
thosekey performance
indicators are based.
9) Metrics used to assess
climate-related risks
andopportunities.
(Pages 77 to 79 and
pages 125 to 146
(Annual Report
onDirectors’
Remuneration))
Partially compliant
– we have not yet fully
set opportunity
metrics related to
low-carbon products
and services.
Similarly to last year, for FY2024,
theannual bonus plan for Executive
Directors includes a non-ﬁnancial
element in respect of the achievement
ofkey steps towards our climate
changestrategy.
Our sustainability team continues toreview
further opportunities of the IT‘circular
economy’ and the actions required to
realise the opportunities. Management
has more clearly deﬁned the next steps
and dependencies to realise the
opportunities. Realisation ofsome of the
actions will require the support of some of
our vendor partners.
Metrics to support with monitoring and
realising our opportunities continue to
be developed.
10) Scope 1, scope 2 and,
ifappropriate, scope 3
greenhouse gas emissions,
andthe related risks.
(Pages 77 to 79)
Compliant
We disclose in this Annual Report our
emissions, which cover scopes 1,2 and 3.
Available prior year data is included to
support trend analysis.
Softcat’s net zero targets have
beenapproved by the SBTi, using our
FY2021 emissions as our baseline year.
A description of the
targets used by the
Company to manage
climate-related risks and
torealise climate-related
opportunities and of
performance against
thosetargets.
11) Targets used to manage
climate-related risks
andopportunities and
performance against targets.
(Pages 77 to 79)
Partially compliant
– our net zero targets
have been approved
by the SBTi. However,
we have not yet fully
set opportunity targets
related to low-carbon
products and services.
We have a deﬁned approach to risk
appetite on the level of risk that we
arewilling to accept in the pursuit
ofaspeciﬁc objective or strategy
(seepage84).
Our sustainability team continues to review
further opportunities, particularly the IT
‘circular economy’ and other opportunities
to increase the focus on more sustainable
products andservices to sell to our
customers. Management has more clearly
deﬁned the next steps and dependencies
to realise the opportunities.
Actions required to realise the
opportunities are being developed.
66 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Governance
The Board retains ultimate
responsibility and accountability
for the oversight of the Company’s
strategy. Sustainability is an
important issue at Softcat and is
discussed both by management
and the Board. The Board’s
approach includes seeking
compliance with respect to
sustainability and climate
changeand the approval of
material environmental targets.
In 2022, the Board established a
Sustainability Committee as a Committee
of the Board. The Sustainability Committee
meets twice per year and is chaired by
Vin Murria. The Sustainability Committee
is responsible for, on behalf of the Board,
setting the sustainability strategy of
Softcat, including goals, targets and
objectives, and it monitors management’s
performance against these. Monitoring
the effectiveness of management’s
processes for identifying, assessing, and
responding to climate-related risks and
opportunities has also been delegated
to the Sustainability Committee.
Areport from the Sustainability
Committee is provided onpages
123and 124.
To successfully manage sustainability
and implement associated initiatives
effectively, Softcat operates a tiered
governance approach. This ensures that
all areas of sustainability get the right
levels of focus throughout the business,
including both the effective monitoring
of climate-related risks and taking
advantage of climate-related
opportunities. The wider framework in
respect of how the Group manages its
environmental, social and governance
(‘ESG’) responsibilities was reviewed by
the Sustainability Committee during the
year. The review clariﬁed where ESG sits
within Softcat’s obligations and aligned
understandings and expectations
acrossbusiness functions. As a result
ofthe review, we have established a
Sustainability and ESG Leadership
Working Group, bringing together
senior managers working across these
topics to further enhance co-ordination
and delivery on key ESG issues.
The approach to climate change has
been designed to focus on what is
required to support Softcat, its supply
chain and its customers on our vision.
Katy Mecklenburgh is the executive lead
for sustainability, and she is supported
by various managers and employees.
Inparticular, the Business Transformation
Director (who is a member of the
SeniorLeadership Team) provides
executive-level support on strategy and
direction. Both Katy and the Business
Transformation Director are supported
by a sustainability team, which has
full-time responsibility for the day-to-day
implementation of sustainability initiatives.
The Business Transformation Director
and Sustainability Lead (who heads up
the day-to-day management of the
sustainability team) attend each meeting
of the Sustainability Committee to ensure
the Committee engages with those
whohave responsibility for operational
management of sustainability throughout
the Company. The Sustainability
Committee receives updates on the
resourcing of the sustainability team to
ensure it is sufﬁcient to support future
requirements for the business.
The sustainability team and the
Company Secretary take responsibility
for monitoring changes in regulation
and required disclosures in respect of
climate change and discussing this with
the Sustainability Committee together
with plans if required to adhere to
incoming regulations. Updates on
climate-related performance and
initiatives in the Group are provided by
the Sustainability Lead to each meeting
of the Sustainability Committee.
The sustainability team works in
collaboration with other teams as
necessary to ensure the effectiveness
ofthe climate-related risk assessment
process and to explore opportunities.
This includes organising initiatives
andactions to mitigate these risks and
tocapitalise on opportunities. The
sustainability team also works with
external stakeholders, in particular
thesupply chain on the planning and
co-ordination required to realise
opportunities. The sustainability team
isalso supported by external specialists
as needed on various issues, particularly
to ensure effective compliance with
disclosures and obligations.
The business also retains internationally
recognised ISO accreditations including
ISO 14001 (Environmental Management)
and ISO 50001 (Energy Management)
accreditations to support its approach
toenvironmental matters. The ISO
standards help Softcat to improve its
environmental performance through
more efﬁcient use of resources,
reduction of waste and an improved
energy management system.
We have now undertaken two ﬁnancial
impact assessments of our climate-related
risks and opportunities to improve our
understanding of potential implications
over the short, medium and long term.
Our process for assessing the materiality
of our climate-related risks (on a gross
and a mitigated net basis) is consistent
with the process for other corporate risks.
Any material risks (including any material
climate-related risks), together with plans
to mitigate or manage such risks, will be
presented and reviewed bythe Audit
Committee as part of itsresponsibility
forrisk managementoversight.
67Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Sustainability governance structure
Board
Overall strategic direction
Sustainability Committee (see pages 123 and 124)
Board-delegated responsibility for
oversight of sustainability strategy,
policy and actions
Board-delegated responsibility for
monitoring climate-related risks,
opportunities and targets
Oversight of key climate-related
compliance and disclosures
Audit Committee
Responsible for risk management oversight. It reviews all material risks, including any material climate-related risks
Remuneration Committee
Establishes and reviews the remuneration framework and remuneration metrics for the Executive Directors.
Tosupportgoodprogress on sustainability issues, part of the annual bonus plan for Executive Directors is
basedontheachievement of non-ﬁnancial objectives
Sustainability leadership team
Comprises the CFO, Business Transformation Director,
Sustainability Lead and Company Secretary
Responsible for providing executive-level direction and
support on climate-related actions, risks, opportunities,
targets and compliance
Sustainability and ESG Leadership Working Group
Comprises the sustainability leadership team plus
othersenior managers across the business responsible
forESG issues
Responsible for co-ordination and alignment on key ESG
issues across the business
Sustainability delivery team
Comprises the sustainability
leadership team plus selected
seniorrepresentatives responsible
forkey climate-related
stakeholdermanagement
Responsible for operational
management of key environmental
targets, actions and engagement
withstakeholders
Responsible for operational
requirements from a
sustainabilityperspective
Green team
Comprises a green team
ExecutiveCommittee and local
greenteam volunteers
Responsible for local delivery of
environmental initiatives around their
local ofﬁces and communities
Raises awareness and champion the
importance of environmental issues
68 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Strategy
Softcat’s strategy is to sell more
to existing customers and to
grow its customer base. Our
purpose is to help customers
use technology to succeed, by
putting our employees ﬁrst – this
starts with providing employees
with a great place to work.
Ourapproach to climate change
is well aligned to both our
strategy and purpose.
As an IT reseller, we do not manufacture
products. Our exposure to climate-related
risks and opportunities is largely indirect
and principally related to goods and
services procured from our vendors and
sold to our customers, often together
with value added services and support.
To enable Softcat to keep delivering
value for its stakeholders, we must
ensure that sustainability is embedded
in the way our business operates. Each
year, the Board conducts a formal strategy
review, which this year, for a second year in
a row, integrated areview of sustainability.
This helps to provide the Board with a
more holistic view of Softcat’s strategy,
including the resilience of the business to
climate change and other sustainability
challenges, as well as potential
opportunities for sustainable growth.
We operate a framework for sustainability
shown on this page which deﬁnes our
approach, guides our actions and supports
the steps we take to mitigate the impacts
of climate change. This framework also
supports our overarching strategy to
grow our customer base and sell more
toexisting customers, as we expect
theimportance of sustainability to
ourcustomers will continue to increase.
This methodology allows us to focus on
relevant internal and external factors,
better manage our scope 1, 2, and 3
emissionsand work closely with
identiﬁed stakeholders.
Softcat’s framework for sustainability
We have taken steps to put our strategy
and framework into effect, including:
• setting environmental targets
and developing action plans to
achieve them;
• working closely with our key
stakeholders, particularly:
− vendors and our supply chain: to
help us reduce our environmental
footprints and to explore
further opportunities in the
circular economy;
− customers: using our knowledge
and solutions to help customers
take a more environmentally
responsible approach to how they
use IT; and
− employees: to reduce the
environmental impact of our
operations. This includes Group-
wide sustainability training,
which nearly all employees
have completed. We will also
roll out more bespoke training
on sustainability for our sales
teams, enabling them to better
help customers in making
sustainable choices.
Given the nature of our business, we do
not envisage that material investments
or changes to our business model are
required to mitigate the risks of climate
change or to take advantage of
opportunities. For example:
• we do not expect to incur any material
research and development costs;
• our strategic focus is on organic
growth, rather than growth through
acquisition and divestments;
• we are debt free and prioritise our
capital for organic growth. We do
not envisage the need for additional
access to capital in respect of our
approach to managing climate
change (see our capital allocation
framework on page 102);
• our operations are ofﬁce-based, and
we work in modern, energy-efﬁcient
ofﬁces. All ofﬁces, apart from our
head ofﬁce in Marlow, are leased
properties for which we can change
location should it be necessary. We
have now completed installation of
solar panels in the Marlow ofﬁce, which
is making a material contribution to
the ofﬁce’s energy requirements.
Softcat
Making sustainability a
core element to its business
and embedding it in
Softcat’s future. Softcat
willsupport all of its
priority goals and continue
to drive and develop
amore efﬁcient and
lower-carbon industry.
Supply chain
Softcat is working with
itspartners, suppliers
andvendors to better
understand their net zero
plans. It is also working
with them to ensure they
are adhering to Softcat’s
values and doing what
they can to enable, deliver
and support a more
sustainable supply chain.
Solutions
Softcat is reviewing the
services and solutions
offered to its customers.
This will enable its
employees to create and
deliver more sustainable
products and services to
assist customers on their
own sustainability journey.
69Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Climate-based
scenarioanalysis
In line with the UK CFD requirements,
wehave conducted climate scenario
analyses for the last three years, with the
aim of reﬁning our approach to better
understand the potential impacts and
opportunities for Softcat against
possible climate futures. Our ﬁrst year
ofscenario analysis (2022) focused on
establishing a baseline approach to
assessing our key risks and opportunities,
whilst in 2023 and 2024, we worked
withour external advisers to refresh the
analysis to ensure it is up to date and
that potential business impacts more
accurately reﬂect our operations.
We consider three key variables in our
scenario analyses: the appropriate
physical and transition climate scenarios,
geographical scope of the analysis, and
time horizons. This year, we have made
improvements to the geographical
scope of the analysis in relation to
physical risks by conducting a more
accurate assessment of the potential
impacts to our key locations based on
climate hazard data extracted using
geographical coordinates. This improves
the accuracy of the results and has
thereby allowed us to validate and
reduce the associated initial risk ratings
from last year, which were instead based
on wider regional trends.
For the scenario analysis to remain
effective, we have followed the UK CFD
recommendations to use a divergent
range of scenarios. We have therefore
made our assessments based on the
climate scenarios on the right from the
Intergovernmental Panel on Climate
Change (‘IPCC’) Fifth Assessment Report
(‘AR5’), which are known as Representative
Concentration Pathways (‘RCPs’), as well
as transition scenarios from the Network
for Greening the Financial System
(‘NGFS’). These scenarios vary from the
scenarios used last year due to changes
in our approach, and the data available
to support the more detailed physical
risk analysis; however, they have been
closely aligned based on their temperature
outcomes and narratives, to ensure there
are no material changes which could
affect our assessment of the magnitude
of ﬁnancial impacts between years.
These changes do not materially affect
the assessment’s outcomes.
Physical scenarios
Low emissions
scenario (RCP2.6)
A predicted global temperature increase between 1.5°C
and 1.7°C by 2100, compared to pre-industrial levels. This
would bring the world in line with the Paris Agreement of
1.5°C. This is commonly referred to as the best-case and
most ambitious scenario.
Medium emissions
scenario (RCP4.5)
A predicted global temperature increase between 1.7°C
and 3.2°C, in line with current climate change policies,
pledges and commitments. If the world continues on its
current trajectory, this is seen as the most likely scenario.
High emissions
scenario (RCP8.5)
A predicted global temperature increase between 3.2°C
and 5.4°C, where carbon emissions continue growing
unmitigated. With no mitigation, this is deemed the
worst-case scenario.
Transition scenarios
Net zero 2050
scenario (‘NZ2050’)
This is an ambitious scenario that limits global warmingto
1.5°C through stringent climate policies andinnovation.
Nationally determined
contributions
scenario(‘NDCs’)
This scenario accounts for all Government-pledged
climate targets, even if not yet backed up by implemented
effective policies.
Current policies
scenario (‘CPs’)
This is a pragmatic exploratory scenario, which assumes
that only currently implemented policies are preserved
into the future.
The UK is the most signiﬁcant location for our operations and our revenue
(representing over 95% of both headcount and revenue). Most of our key vendors
alsohave operations in the UK. In 2024, our climate scenario analysis also included
impacts on operations in our ofﬁces in the USA and APAC, in addition to our Dublin
ofﬁce, which was already considered in the 2023 assessment. As part of our risk
management framework, we conducted our analysis across three time horizons:
Term Horizon Milestone year
Short term 2024 to 2030 2027
Medium term 2030 to 2040 2035
Long term 2040 to 2050 2045
Consistent with CFD, our assessment covered the following:
Physical risks:
resulting from climate change events and changes in weather. These can be
acute (event driven) or chronic (long-term shifts);
Transition risks:
associated with the implications from the measures taken to reach a low-carbon
economy. These risks can be categorised as policy and legal, technological,
market and reputational; and
Opportunities:
realised capitalisation of beneﬁts upon the low-carbon market and technological
drivers. These can be from resource efﬁciencies, energy sources, new products
or services, markets and resilience.
70 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Climate-related risks
andopportunities
Through the application of our risk
management approach, we summarise
below the most relevant climate-related
risks and opportunities. These are in
respect of the emissions scenarios and
the time horizons as set out above.
Through our initial analysis, no major
orcatastrophic net risk exposures were
identiﬁed in the short-term time horizon
assessed across our climate scenarios.
We believe there are opportunities,
which we continue to explore and
develop. We will continue to assess the
potential risks over the medium and
longterm, ensuring that mitigative
actions are developed.
Our process for assessing the materiality
of our climate-related risks is consistent
with the process for other corporate
risks. The assessment of our corporate
risks includes an assessment of the
potential ﬁnancial impact:
Risk Potential ﬁnancial impact
Insigniﬁcant Up to £100k
Minor £100k–£500k
Moderate £500k–£3m
Major £3m–£25m
Catastrophic Greater than £25m
In 2024, we undertook a ﬁnancial impact
assessment of our climate-related risks
and opportunities, to further improve
our understanding of the materiality of
these risks and opportunities and how to
manage them. This reﬁned the previous
ﬁnancial impact assessment conducted
in 2023, by reviewing the identiﬁed risks
and opportunities with key stakeholders,
capturing any other relevant issues
which were not considered previously,
and updating the ﬁnancial impact ratings
and associated mitigation measures
toreﬂect the progress we have made
between years. These assessments also
help to inform any inputs required into
the annual operating budget, or other
longer-term ﬁnancial plans, as approved
by the Board.
Following the review, we do not
envisage that adaptation and transition
to a lower-carbon world will require a
fundamental shift to the way we do
business or a major change to our
business model (which is shown on
pages 22 and 23). We also do not
envisage that we will need to make
major divestments, acquisitions or other
signiﬁcant capital allocation decisions
(including access to capital or ﬁnancing,
if required) to take climate change into
consideration. We have approved
relatively minor additional/changes
inexpenditure; in particular, during
FY2024 we:
• completed the installation of solar
panels on the roof of our head ofﬁce
in Marlow; and
• invested in growing our sustainability
team to deliver on our sustainability
strategy, including our approach to
climate change.
71Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Key to potential ﬁnancial impact: Low Medium High
Risks
Physical risk
category Identiﬁed risk and timeframe Current or future control measure
Relevant
emissions
scenario
Potential ﬁnancial impact
Short Medium Long
Acute
Increased frequency and intensity of
extreme weather events such as intense
rainfall and heatwaves which could
disruptSoftcat’s operations, supply
chainandservices.
Link to principal risk:
Business interruption (seepage 86).
Timeframe of potential materialisation:
Medium, Long
Softcat’s largest vendors (see page 29) are
major international businesses, which have the
resilience and investment to mitigate the future
risk of climate-related risks to their organisation.
We work with a wide breadth of technology
partners to reduce concentration risks.
We also hold ISO 22301 for Business
Continuity.This was stress-tested during the
COVID-19 pandemic.
As a reseller, any increases in supplier costs
aretypically passed through to the customer.
Remote/hybrid working is available to all
employees, providing ﬂexibility during
challenging conditions. Alternative workplaces
for employees are available if needed to avoid
low-lying areas.
Our ofﬁces are modern and energy efﬁcient.
Business interruption insurance coverage is
inplace.
Our supply chain has previously shown resilience
during periods of large-scale disruption, for
example during the COVID-19 pandemic.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue due to decrease in productivity
andavailability ofworkforce;
• increased costs associated with ofﬁce leases;
• increased costs for building repair, maintenance and insurance; and
• increased energy consumption costs.
Chronic
Long-term temperature increases in
theUK and Ireland, leading tobusiness
disruptions or damagedinfrastructure.
Link to principal risk:
Business interruption (see page 86).
Timeframe of potential materialisation:
Medium, Long
Softcat leases most of its premises, providing
opportunity to seek out modern spaces more
resilient to climate change.
Remote/hybrid working is available to all
employees, providing ﬂexibility during
challenging conditions.
Our ofﬁces are modern and energy efﬁcient.
Business interruption insurance coverage
isinplace.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue due to decrease in productivity
andavailability ofworkforce;
• increased costs associated with ofﬁce leases;
• increased costs for building repair, maintenance and insurance; and
• increased energy consumption costs.
Chronic
Rising sea levels resulting in disruption
to ofﬁces in the south-east, low lying
coastal areas of the UK and the
Dublinofﬁce.
Link to principal risk:
Business interruption (see page 86).
Timeframe of potential materialisation:
Medium, Long
We lease most of our premises, providing
opportunity to seek out modern spaces more
resilient to climate change.
Remote/hybrid working is available to all
employees, providing ﬂexibility during
challenging conditions. Alternative workplaces
for employees are available if needed to avoid
low-lying areas.
Our ofﬁces are assessed as necessary by
ourinsurers for ﬂood risk. We take action
asrecommended by our insurers to reduce
thepotential impact of ﬂooding.
Business interruption insurance coverage
isinplace.
This risk has reduced since last year following
amore detailed ﬂood risk assessment of the
geographical locations of our ofﬁces.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue due to decrease in productivity
andpotential closure of certain ofﬁces;
• increased costs associated with ofﬁce leases;
• increased costs for building repair, maintenance and insurance; and
• increased energy consumption costs.
72 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Risks continued
Physical risk
category Identiﬁed risk and timeframe Current or future control measure
Relevant
emissions
scenario
Potential ﬁnancial impact
Short Medium Long
Policy
andlegal
Increasing policies and regulations
thatcould place new requirements on
Softcat, such as enhanced emissions
reporting, regulation of critical
minerals, and carbon taxes.
Link to principal risk:
Regulatory and compliance
Timeframe of potential materialisation:
Short, Medium, Long
Softcat’s current decarbonisation targets,
submitted to SBTi, provide a trajectory which
would result in net zero by 2040.
As a reseller, increases in input costs are passed
on to the customer.
Management regularly reviews the impact of
changes in legislation, taxes, etc. and oversees
initiatives to ensure compliance. Through
regularly conducting horizon scanning,
supported by third-party advisers, we have
good foresight of our potential risks.
The Sustainability Committee has oversight in
respect of sustainability reporting and progress
towards our emissions targets.
We are increasing engagement and collaboration
with our suppliers and vendors on sustainability
tomitigate potential risks to our supply chain.
Forexample, we held a sustainability supplier
session at the Softcat Partner Forum during the
year to discuss supply chain issues.
Low
Medium
High
Potential ﬁnancial impacts include:
• increased input costs incurred through vendor and
partner products;
• increased property costs associated with enhanced
building standards;
• reduced revenue from potential termination of relationships with suppliers
unable to transition to net zero;
• costs from ﬁnes or increased carbon taxes; and
• reduced investment from non-compliance.
Technology
The cost of transitioning to using
low-carbon technology and energy
sources in Softcat’s operations, for
example green energy tariffs.
Link to principal risk:
N/A
Timeframe of potential materialisation:
Short, Medium
We have signed up to the SBTi and have a goal
toachieve 100% renewable energy by 2024.
Ourofﬁces use renewable energy where possible
and we purchase renewable energy credits where
we are unable to use renewable energy.
We are actively developing our net zero delivery
plan. Most of our ofﬁces are outﬁtted with
modern amenities which are energy efﬁcient.
We have replaced our internal combustion
carﬂeet with electric vehicles and installed
additional charging points.
We completed installation of solar panels at
ourhead ofﬁce in Marlow and the panels are
nowoperational.
Low
Medium
High
Potential ﬁnancial impacts include:
• increased capital allocation to low-carbon
technologies and to retroﬁt ofﬁce spaces for
low-carbon technology; and
• increased cost to accommodate changing energy tariffs.
Market
Suppliers being unable to transition
toalow-carbon economy at the same
pace as Softcat, making Softcat
unableto achieve its net zero goal
andcommitments.
Link to principal risks:
Business interruption; failure to
respond to market changes (see
page86).
Timeframe of potential materialisation:
Medium
We are working with our supply chain and with
the wider IT industry as part of our framework
for sustainability. We understand many of their
goals to achieve net zero and these will be
reﬂected in our target to achieve a carbon
netzero supply chain by 2040.
In respect of our largest vendors, we have mapped
their alignment to our net zero targets. This allows
us to identify parts of the supply chain more
robustly as to whether there is or is not alignment.
The mapping exercise showed that many of these
vendors have set net zero targets to be achieved
by 2040. We continue to monitor those vendors
who have set later target dates.
As already noted, we held a sustainability supplier
session at Softcat’s Partner Forum during the year.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue due to a shift in consumer
preference for low-carbon products; and
• reduced investment as a result of failure to achieve net zero target.
Key to potential ﬁnancial impact:
Low Medium High
73Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Physical risk
category Identiﬁed risk and timeframe Current or future control measure
Relevant
emissions
scenario
Potential ﬁnancial impact
Short Medium Long
Market
Risks associated with not having a
carbon-literate workforce able to
promote low-carbon technology to
ourcustomers could generate lower
customer satisfaction and engagement.
Link to principal risk:
Failure to respond to market changes
(seepage 86).
Timeframe of potential materialisation:
Medium, Long
In respect of sustainability, we have a Group-
wide structure with Board-level oversight for
sustainability, including climate-related issues,
operational responsibilities assigned to
appropriate senior management and local-level
activities and promotions undertaken by local
green teams.
We have rolled out Group-wide training on
climate change, which has been completed by
nearly all of the workforce. Weare looking to
develop further improvements toour sales
systems to highlight and promote the sale
oflower-carbon products across the
productlifecycle.
We are preparing to roll out more bespoke
training on sustainability for our sales teams,
enabling them to better help customers in
making sustainable choices.
We have increased resources in our
sustainability team, which allows it to provide
more support to our sales teams. Thisincludes
the creation of a new role of aSustainability
Customer Success Manager.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue from lower sales of
low-carbon products;
• reduced capital and investment due to lower performance; and
• increased expenditure on employee upskilling.
Reputation
Negative perceptions from
stakeholders, including customers,
potential investors and existing
shareholders, as a result of failure to
embed sustainability into the business
or take action on climate change.
Link to principal risk:
Failure to respond to market changes
(seepage 86).
Timeframe of potential materialisation:
Short, Medium
We have developed and are communicating
aclear climate change strategy and our targets
to reduce carbon emissions.
Softcat discloses performance data relating to
climate-related risks, its net zero trajectory and
other environmental performance information
through its SBTi and Carbon Disclosure Project
(‘CDP’) submissions.
We have, for the ﬁrst time, obtained external
assurance in respect of our carbon emissions data.
Assurance has been received in respect of the data
for FY2023 and we plan to obtain assurance on our
data for FY2024. Assurance statements are available
to view on the Trust section of the Softcat website.
Low
Medium
High
Potential ﬁnancial impacts include:
• reduced revenue from customers as a result
ofimpacted market positioning; and
• reduced investment leading to impacted growth strategy and share prices.
Reputation
Failure to attract or retain staff
duetobeing viewed as an
unsustainable business.
Link to principal risk:
Talent, capability and leadership (see
page 86).
Timeframe of potential materialisation:
Short, Medium, Long
This is a new risk item, which reﬂects the wider
heightened awareness of climate change
insociety.
A strong employee culture is at the heart of
ourbusiness. This will help to retain and attract
employees and to continue to drive our
exceptional performance.
We have embedded sustainability at different
levels of our business, from Board level through
to locally run initiatives by green teams.
Wehaveinvested in growing the capability
ofour sustainability team to work more
extensively with the rest of the business.
We widely communicate our goals and
progresson ESG and actively encourage
employees to take part in supporting
community actions. Forexample, we authorise
up to two paid dayseach year for employees
totake part in volunteering or charitable
fundraising activities.
We have rolled out Group-wide
sustainabilitytraining.
Low
Medium
High
Potential ﬁnancial impacts include:
• increased expenditure on recruitment; and • reduced revenue/slower business growth due to a less effective and less
engaged workforce.
Key to potential ﬁnancial impact: Low Medium High
74 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Opportunities
Category Identiﬁed opportunity and timeframe Current or future strategy
Relevant
emissions
scenario
Potential ﬁnancial impact
Short Medium Long
Markets
Engaging employees to understand
Softcat’s net zero ambitions, green
skills and training.
Timeframe of potential materialisation:
Short, Medium
Upskilling Softcat employees on the necessary
green skills required for a low-carbon economy
can help Softcat strengthen its relations with
stakeholders, building reputation and
competitive advantage.
This can also support Softcat in improving
itstalent retention and development for its
workforce, which is included as one of our key
risks above. The market for good talent remains
highly competitive. Ensuring we have a strong
and credible approach to sustainability
provides a competitive edge to attract and
retain talent. We are proactive in our support
for employees to beneﬁt from environmental
initiatives, such as: local green teams throughout
the business; the provision of a tax-efﬁcient
salary sacriﬁce scheme to enable employees
tolease electric vehicles for their use; a cycle-
to-work scheme; and ﬂexible hybrid working,
allowing employees to work some days at
home,thus reducing carbon emissions arising
from commuting.
Low
Medium
High
Potential ﬁnancial impacts include:
• increased revenue associated with improved
reputation and competitive advantage; and
• lower expenditure on recruitment due to improved talent retention.
Resource
efﬁciency
Investing in more sustainable
technology to improve Softcat’s
day-to-day operations, such as utilising
green energy tariffs and low-carbon
ofﬁce equipment.
Adapting working spaces to create
aproductive working environment in
awarmer climate.
Timeframe of potential materialisation:
Short, Medium, Long
Whilst most of our ofﬁces already use
energy-efﬁcient equipment, this will be
keptunder review for further opportunities.
Theuse of more sustainable technology in our
day-to-day operations provides opportunity
tolower our dependency on fossil fuels and
reduce our annual operational expenditure.
Inthe face of potentially rising fossil fuel prices,
utilising renewable energy tariffs will also
improve our resiliency.
All of Softcat’s ofﬁces are ISO 50001 certiﬁed,
with energy management systems in place.
Wehave also recently appointed a new Head
ofFacilities, who will support with advising on
long-term energy efﬁciency.
The installation of solar panels at the Marlow
ofﬁce was completed this year, and we are
continuing to invest in new ofﬁce infrastructure,
which will include sustainability considerations.
By ensuring our ofﬁces remain productive
working environments, we can maintain and
even enhance our productivity. Our employee
satisfaction surveys also provide our employees
with the opportunity to provide feedback on
our ofﬁces, allowing us to identify where further
improvements can be made.
Low
Medium
High
Potential ﬁnancial impacts include:
• lower expenditure on energy, and increased resilience against rising fossil fuel prices.
Key to potential ﬁnancial impact:
Low Medium High
75Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Category Identiﬁed opportunity and timeframe Current or future strategy
Relevant
emissions
scenario
Potential ﬁnancial impact
Short Medium Long
Products
and
services
Promoting and encouraging the
implementation of circular economy
practices throughout the value chain,
such as sustainable purchasing,
takeback schemes, reuse or recycling
ofequipment, and remanufacturing.
This can include leveraging Softcat’s
existing products and services,
including promoting the sale of
energy-efﬁcient and sustainable
ITsolutions.
Positioning Softcat as a thought leader
in the industry through engagement
with stakeholders to build customer
solutions and propositions.
Timeframe of potential materialisation:
Short, Medium
Encouraging circular economy practices and
behaviour change on the use of technology
andnatural resources is paramount to achieving
net zero. Doing so presents a strong case both
environmentally and commercially, as it can
result in greater operational savings, more
resilient hardware and a longer lifespan of
in-use products. Expanding services presents
commercial incremental opportunities through
existing and potential new services for customers.
Softcat already operates some of these services
and anticipates opportunities in the future,
particularly if we can gain a competitive
advantage over our peers. We can further
leverage our expertise through our existing
solutions service. This allows customers to
maximise the use and lifespan of an asset
andsupport the circular economy through
recycling, refurbishing and reusing.
Through our partners and vendors, we also
have an opportunity to build on our existing
relationships to promote low-carbon products
and services to our customers. We expect
growth in demand for more energy-efﬁcient
and sustainable IT solutions. Taking advantage
of this opportunity will also mitigate the risk of
failing to evolve our technology offering with
changing customer needs.
Low
Medium
High
Potential ﬁnancial impacts include:
• lower expenditure due to operational savings and
longer lifespan of in-use products; and
• increased revenue or proﬁt arising from expanding services or developing
new services.
Products
and
services
Developing new sustainability offerings
based on evolving needs in the market,
including new products, platforms and
services, to increase Softcat’s revenue
and competitiveness as society
transitions to net zero.
Timeframe of potential materialisation:
Short, Medium
We recognise that innovating and developing
new sustainable products and services can
improve our competitive position and capitalise
on shifting consumer and producer preferences
as our stakeholders increasingly pursue their
net zero goals.
We are working on our offerings in these areas,
and by 2026 we aim to have services certiﬁed
as‘Carbon Neutral’ (PAS 2060) as part of our
tenin ten plan (see page 78).
Low
Medium
High
Potential ﬁnancial impacts include:
• increased revenue associated with increased demand
for low-carbon products and services, and access to
new customers; and
• better competitive position to reﬂect shifting consumer preferences.
Our approach to risk management is set out on pages 83 to 88. Through our regular risk assessments, new risks, including
emerging climate-related issues, will be identiﬁed and assessed for materiality. There is a Board-approved deﬁnition for material
emerging risks and a process is in place which requires the CFO to escalate promptly any such risk to the attention of the Boar d.
Following our assessments of climate risk to Softcat, we are conﬁdent that our business strategies are resilient against the impacts
of climate change due to the nature of our business operations and the breadth of global technology vendors with which we work.
We will remain proactive by refreshing scenario analysis and testing scenarios on an as-needed basis, at minimum every three ye ars
or whenever there are signiﬁcant changes to the assumptions and climate scenarios used. We will re-evaluate our climate-related
risks and opportunities on an annual basis to ensure Softcat remains resilient.
Key to potential ﬁnancial impact: Low Medium High
76 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Risk management
Our risk management
framework helps us to identify,
assess, manage, monitor and act
on risks, including those related
to climate change. Managing
our risks effectively will enable
Softcat to deliver on its strategy.
We recognise that climate
change may have an impact on
our strategy and operations and
have considered these as part of
our risk management process.
Climate change is already a component
of the risk of failure to respond to market
changes when considering the needs of
our customers and how products,
services and solutions might be affected
by the drive towards carbon neutrality
(see our principal risks and uncertainties
on pages 86 to 88). We also have robust
plans to mitigate the impact of business
interruption (which may occur, for
example, due to extreme weather
events) and this is already included as
amitigating action in our principal risks.
Climate change also provides us with
opportunities to help our customers
toreduce their environmental impacts
and to differentiate our offerings
fromcompetitors.
We continue to mature our risk
management framework and approach,
including support from our Risk,
Assurance and Process Improvement
team (the ‘Risk and Assurance’ team).
Weoperate a risk register for climate
change. The risk register on climate
change captures our climate-related
risks and opportunities, and their
associated business and potential
ﬁnancial impacts, providing arobust
framework to identify, assess, manage
and monitor the impacts of climate
change on our business. Weidentify
current or future mitigation measures
and controls for the risks inorder to
reduce the impact and likelihood of
eacharising.
This year, we also updated our
assessment of climate change risks and
opportunities that could pose a ﬁnancial
impact to the business. The primary
purpose of the updated assessment
wasto determine whether the risks and
opportunities were still relevant since
the last assessment and reassess these
based on our progress over the last year,
as well as to consider physical risks
across our site locations more accurately.
We have also identiﬁed and added some
new risks and opportunities, but these are
not considered material. We incorporated
the identiﬁcation and assessment of
climate-related risks into our overarching
corporate risk management framework
using our current corporate risk framework.
Climate-related risks and their potential
ﬁnancial impacts were validated and
scored through a risk review workshop.
This year, the workshop was attended
byseveral senior managers in the
business, including the Business
Transformation Director, Sustainability
Lead, Head of Commercial Finance
andCompany Secretary.
A representative from our Risk and
Assurance team (which is responsible for
day-to-day management of the corporate
risk register) also attended the workshop
to ensure alignment of the approach
between climate change risks and
corporate risks. The inclusion of
representatives from our sustainability
team in the workshop helps us to deliver
on addressing our key climate-related
risks, by considering the views of the
other senior managers. A summary of
the key risks and opportunities was
reviewed by the Sustainability Committee,
which has oversight of the climate change
risk and will be incorporated into the
climate risk and opportunity register.
Our primary business is an IT reseller
and the majority of our business is
conducted in the UK and Ireland.
Wedonot manufacture goods and
wehave no production facilities (e.g.
factories). Given the nature, locations and
operation of our business and following
our assessment of risks, we believe that
thedirect impact of climate change on
Softcat will be low. Our current view is
that we are not materially exposed to
climate change as a business and that
climate-related risks do not present a
material threat to our strategy, long-term
viability, liquidity or ability to operate.
Furthermore, none of the actions taken
so far (or currently planned) to reduce
our environmental impact, mitigate
identiﬁed risks or take advantage of
identiﬁed opportunities have resulted
ina signiﬁcant ﬁnancial impact on our
business. Through our risk management
process, we will continue to assess likely
effects that climate change may have
onour business to ensure our current
assumptions remain valid. To the extent
that we do identify material risks, these
will be modelled into our scenario
analysis and for potential ﬁnancial
impact for longer-term viability
assessment and disclosure in future
Annual Reports.
The Board is comfortable that climate
change has not had a material effect
onour accounting judgements and
estimates this ﬁnancial year. It has also
determined that climate change has
hadno material impact on our asset and
liability valuations for the ﬁnancial year.
The impact of climate change risks is
notcurrently considered by the Board
asa key source of estimation uncertainty.
At Softcat, we are also conscious that
there are ‘emerging trends’ that we do
not currently expect to impact the business
within our associated time horizons.
Therefore, within the register, we have
identiﬁed emerging trends that may
impact the business in the future, and
wewill maintain a watching brief to track
risks which may become of signiﬁcance.
77Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Metrics and targets
As we evolve our sustainability
strategy, we continue to review
our metrics and targets, to
ensure the data we measure is
relevant and meaningful to the
business and aligns with our
overarching strategy, culture
andvalues. The data we measure
and disclose also allows our
stakeholders to effectively
monitor Softcat’s environmental
performance over time.
The Board of Softcat has approved
threekey target commitments and the
Sustainability Committee regularly
monitors progress. Our metrics focus
onour GHG emissions and these are
assessed through the intensity
measurements set out on page 81.
TheSustainability Committee has also
endorsed the GHG emissions reduction
targets approved by the SBTi. Achieving
these key targets forms the focus of our
sustainability initiatives:
• our aim is to implement initiatives
throughout the business to reduce
emissions where possible. We then
use carbon offsetting to offset the
residual impact to operate as a
carbon neutral business;
• to use, where possible, renewable
energy across all ofﬁce locations
(by 2024);
• to work with our supply chain to help
it become net zero (by 2040); and
• the SBTi has approved Softcat’s
targets to reduce GHG emissions
by 45% by 2030 for scopes 1, 2 and
3 and to reduce GHG emissions by
90% by 2040 (relative to a FY2021
base year).
We are committed to improving the
measurement of our carbon footprint
and engaged an external ﬁrm specialising
in sustainability for our FY2024 carbon
footprint calculation. Wehave also,
forthe ﬁrst time, obtained external
assurance in respect of our carbon
emissions data. Assurance has been
received in respect of the data for
FY2023 (scopes 1, 2 and 3) and we plan
to obtain assurance in respect of the
data for FY2024. Assurance statements
are available toview on the Trust section
of the Softcat website.
Like the majority of businesses, scope 3
emissions comprise most of our carbon
footprint. We therefore understand that
to transition to a low-carbon future, it is
imperative that we work with our supply
chain and customers. Our emissions are
disclosed on page 82.
Given the activities of our business, the use
of nature-related resources such as water
and land use are not material metrics. The
Sustainability Committee has been kept
updated on developments in respect of
the recommendations of the Taskforce
onNature-related Financial Disclosures
(‘TNFD’). It is monitoring developments,
particularly in respect of the International
Sustainability Standards Board’s (‘ISSB’)
proposal to further research potential
corporate disclosures and metrics on
nature-related risks and opportunities.
Energy consumed primarily relates to our
ofﬁces and initiatives to reduce energy
consumption are shown on page 82.
Progress on our targets on CO
2
Softcat has made commitments and goals on the environmental impact of the business and its supply chain. As mentioned above,
the Board approved a long-term target to become a net zero business, and this will be achieved primarily by completing three
keystages. Below is a summary of the targets and the progress being made:
Timing Goal Summary and progress update
2022 Carbon
neutral
Softcat has been operationally carbon neutral (self-certiﬁed) since 2022 and continues to be in 2024. Softcat
has moved from conventional offsets to carbon removals, continuing to mature its journey.
Complete
2024
100%
renewable
electricity
Softcat will use, where possible, renewable electricity across all ofﬁce locations. Using renewable electricity
will reduce scope 2 emissions and reduce the environmental impact of energy used in the business.
We purchase renewable energy credits for the remaining ofﬁces where we are unable to use renewable energy.
In FY2022, this target was expanded to include changing Softcat’s pool car ﬂeet from internal combustion to EVs.
This changeover has now been completed.
During FY2024, we completed installation of solar panels at our head ofﬁce in Marlow. The panels are now
operational and making a major contribution to the ofﬁce’s energy requirements.
Complete
2040
Net zero
supply chain
Softcat is working with its supply chain to help it become net zero.
Good progress continues with our vendors, many of which have set net zero targets which align to our 2040
goal. Softcat has also received recognition from some leading market vendors and sustainability organisations.
The UK Government has set a net zero target for the UK by 2050. Our goal is therefore ten years ahead of the
UK target.
Work in progress
As a pivotal part of our journey to net zero, Softcat has committed to the SBTi and had its net zero targets validated. This co mmits the
business to reduce its GHG emissions in line with the Paris Agreement, limiting global warming to 1.5°C. Softcat’s science-based targets
have been approved as in line with the emissions reductions required to achieve net zero emissions across its value chain by 2050.
In FY2022, Softcat became the ﬁrst IT company in Europe to have its targets on climate action approved by the SBTi; the targets
approved cover emissions for scopes 1, 2 and 3. As noted above, our target to become net zero by 2040 is ambitious and is ten
years ahead of the targets set by the UK Government. Softcat has therefore developed a carbon reduction plan to support the
achievement of the targets approved by the SBTi. This includes ten high-level steps over the next ten years (our ‘ten in ten’ plan,
pleasesee page 78), which will help us reduce emissions across all scopes. We will communicate our key steps to our customers,
suppliers and employees to improve their awareness of actions and targets to reduce emissions.
78 Softcat plc Annual Report and Accounts 2024
Our ten in ten plan
Climate-related Financial Disclosures and sustainability continued
Remuneration
Since FY2023, the Remuneration
Committee has determined that
remuneration practices for the Executive
Directors should include an assessment
of performance against some of our
keyenvironmental targets and actions.
Thisis included in the annual bonus plan
for Executive Directors. Achievement
inrespect of the actions is disclosed
inthe Annual Report on Remuneration.
Please see pages 125 to 146 for further
information about executive
remuneration practices.
Internal carbon prices
Beyond offsetting our scope 1, 2 and
operational scope 3 emissions, we have
not yet introduced internal carbon
prices. In FY2024, we commenced a
review into internal carbon pricing and
the role it may play within the business.
Further work will continue onthis,
particularly as to whether it may drive
additional positive behaviours and
decisions to further reduce our impact
on climate change.
Working with
ourstakeholders
Partnerships
To help us achieve our net zero targets,
we work closely with our supply chain,
vendors and other industry and business
forums. Many of our vendors are
dedicated to operating more sustainably
and are making major commitments
towards tackling climate change.
Wecollaborate with our vendors
toensure they understand Softcat’s
commitments and that we understand
their sustainability journeys. For example,
we have improved our understanding
ofmany of our vendors’:
• expectations as to when they will
reach their net zero targets and the
challenges in achieving them;
• progress to reduce energy usage
during manufacturing;
• use of renewable energy;
• use of sustainable packaging
materials; and
• approach to extend the life
expectancy of devices.
Ultimately, we will require sustained
action from our vendors and suppliers
toenable us to achieve our target of a
net zero supply chain by 2040. We will
continue to support and work closely
with our partners to realise this
ambitious target.
Targets Progress Status Year
Full migration to
EVpool cars
We have successfully migrated
allpool cars to EV.
2023
Renewable energy
across all Softcat
locations and
renewable energy
generation projects
100% of the energy we use is now
renewable. We have successfully
completed this a full year ahead
ofthe deadline. Where ofﬁces
areunable to procure renewable
energy, we purchase Energy
Attribution Certiﬁcates (‘EACs’).
2024
Major suppliers/
partners to have net
zero plans and SBTi
where applicable
We have reviewed all tier one
suppliers and are now working to
review our partner network and
remaining suppliers in the coming FY.
2025
Softcat services to
be certiﬁed ‘carbon
neutral’ (PAS 2060)
We have four pilot services currently
in progress to help us reach carbon
neutral status, so we’re making
good strides towards achieving this.
2026
100% of deliveries
to be completed
using low-emissions
delivery service
We are in the process of collecting
comprehensive data for this target.
2027
>80% of customers
will be purchasing
sustainable
products or services
from Softcat
We are in the process of collecting
comprehensive data for this target.
2028
Suppliers to
beusing 100%
renewable
energyacross
theiroperations
We are in the process of collecting
comprehensive data for this target.
2029
45% reduction
ingross emissions
inline with net
zerotargets
(FY2021baseline)
Softcat continues to work towards
it’s science-based net zero targets.
Although we have made good
progress in many areas, absolute
emissions have increased in FY2024
which reﬂects the challenge in
decoupling emissions from growth
and customer demand. We are
following our ten in ten plan and
working closely with vendors
topromote more sustainable
solutions to customers and to
identify opportunities to reduce
emissions whilst we grow.
2030
Zero to landﬁll
(operational waste)
We are in the process of collecting
comprehensive data for this target.
2031
>80% of
customersusing
renewable energy
We are in the process of collecting
comprehensive data for this target.
2032
Key: Completed On track Ongoing
79Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Our work with industry and business forums raises the proﬁle and importance of reducing carbon emissions. It also supports
better collaboration and improved disclosures to allow stakeholders to better understand how they can play their part in the
journey to net zero. Below are some of our important partnerships:
Softcat is a participant of
theUN SDGs. The SDGs are
acollection of 17interlinked
global goals that are designed
to be a ‘blueprint to achieve a
better and more sustainable
future for all’.
Softcat is accredited with the
keyinternationally recognised
environmental standards below.
ISO 14001 sets out the requirements
for anenvironmental management
system. Ithelps organisations
improve their environmental
performance through moreefﬁcient
use of resourcesand reduction
ofwaste.
ISO 50001 speciﬁes the
requirements forestablishing,
implementing, maintaining
andimproving an energy
managementsystem.
Softcat has started its journey
on a selection of its services
becoming PAS 2060 certiﬁed.
PAS 2060 is a standard for
achieving and demonstrating
carbon neutrality through
accurate measurement,
reduction and offsetting
ofemissions.
Techies Go Green is a forum driving
and supporting sustainability across
the technology industry. Softcat is a
member and we participate in the
steering committee to support its
development and direction.
Softcat has approved
nearandlong-term
science-based emissions
reductions targets with
theSBTi.
In 2024, Softcat earned notable recognition for its environmental initiatives and sustainability efforts. At the prestigious CR N
Sustainability in Tech awards, Softcat was awarded Sustainability Champion of the Year (Reseller) and received the Best
Sustainable Customer Project of the Year award for its hardware recycling collaboration with Kent County Council. In addition,
Alastair Wynn, Softcat’s Business Transformation Director, was honoured with the Sustainability Evangelism award for his
leadership in advancing Softcat’s sustainability goals.
Further accolades include Lenovo naming Softcat as its Lenovo 360 Outstanding Partner and ESG Partner of the Year (2024),
highlighting a joint commitment to sustainable business practices. For the second consecutive year, Softcat also achieved
ﬁve-star HP Amplify Impact Partner status. Softcat was also awarded the HP Amplify Sustainable Partner of the Year award 2024.
On a global scale, Softcat was listed by TIME magazine as one of the Top 500 Sustainable Companies globally. The Financial
Times also acknowledged Softcat as a Europe Climate Leader, reinforcing its position as a leading advocate for sustainability.
InIreland, Softcat secured the Sustainability award at the Tech Excellence awards, marking a year of exceptional recognition
foritsenvironmental efforts.
These awards and recognition underscore Softcat’s ongoing dedication to integrating sustainability into its operations and
achieving long-term environmental goals.
80 Softcat plc Annual Report and Accounts 2024
Climate-related Financial Disclosures and sustainability continued
Employees
Our employees have a major role to
playin the success of our response to
climate-related risks and opportunities.
The Group-wide training has improved
our employees’ awareness ofclimate-
related issues. It has also improved their
understanding of some of the climate-
related terminology used by Softcat’s
stakeholders, such as our customers and
suppliers. This will make it easier for
employees to engage with our key
stakeholders when selling or procuring
products and services.
Softcat has ‘green teams’ in place in its
ofﬁces, which help to drive awareness,
formulate innovative ideas and
co-ordinate events associated with
climate change. The employees who
form the green teams volunteer their
time to support Softcat and communities
in tackling climate change. The green
teams meet regularly to discuss the latest
sustainability news and developments
and to arrange Softcat initiatives.
To ﬁnd out more about what we are
doing onsustainability, please see our
website at www.softcat.com/about-us
sustainability. Thiscan also be viewed
byscanning the QRcode with your tablet
orsmartphone.
Customers
Softcat does not manufacture products
and most of Softcat’s reportable emissions
are in respect of scope 3, which includes
the supply of goods resold and services
in our supply chain and on to customers.
We therefore make an active contribution
to help many of our customers better
understand their environmental impacts
and explore with them potential ways
they can reduce this impact. Results from
our most recent customer experience
survey conﬁrmed that sustainability
remains one of the top ten ITpriorities
for many of our customers.
Softcat leverages its expertise in IT
through its solutions services to offer
help to customers be more sustainable.
Our comprehensive approach to
customer offering support underpins
key drivers of future sustainability:
maintain, refurbish and reuse. Softcat’s
sustainable solutions allow customers
toenhance the use ofan asset and to
support the circular economy through
recycling, as well as ensuring the
customers’ supply chains are as efﬁcient
as possible.
Making IT sustainable forour customers
Pre-supply
Commitment:
Ensure our customers understand
their IT estate’s carbon footprint
during the procurement phase.
Opportunity and deliverables:
• IT sustainability assessment
• Sustainable product/
solutions/services
• Emissions and supply
chainmanagement
In use
Commitment:
Proactively work with our customers
to help deliver sustainability across
existing estates as well as during the
delivery of services.
Opportunity and deliverables:
• Sustainability success management
• Green ops/efﬁciency services
• Sustainable services
Post-supply
Commitment:
Offer sustainable maintenance,
management and retirement services
toour customers.
Opportunity and deliverables:
• Environmental ‘end of life’ services
• Hardware refurbishing/
remanufacturing services
• Hardware buy-back/trade-ins
• Social value/digital
poverty donations
Softcat continues to develop solutions
inline with vendor offerings and new
sustainable developments. This includes:
• Group-wide training on sustainability.
The vast majority of employees
have completed their training. We
are also preparing to roll out more
bespoke training on sustainability
for our sales teams, enabling them
to better help customers in making
sustainable choices;
• promoting increased use of sustainable
products and services to our customers;
• helping our customers to understand
the beneﬁt of more sustainable
solutions, such as greater adoption
ofcloud services if appropriate; and
• further promotion of
refurbisheditems if that meets
thecustomer’s requirements.
• The sustainability team now has
adedicated Sustainability Customer
Success Manager who works with the
Sales function to make it easier for
our customers to make sustainable
purchasing decisions.
81Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Environmental initiatives
There will always be ways for us to play our part in fostering a more sustainable world. Softcat is running several activities to
improve its environmental footprint, as highlighted below. We are pleased that some of these are complete, whilst others are
stillin progress.
Activity Progress
Reduction in printing across all ofﬁces using printing software solutions
Certiﬁed renewable energy to be used across all Softcat ofﬁce locations where possible
Reduction in energy consumption through new, efﬁcient lighting and technology throughout all ofﬁces
24 new EV chargers at Marlow HQ for use by staff and visitors and for pool cars
Rollout of employee EV car scheme
Secure WEEE/recycling of internal IT when no longer required
Investment in the latest workspace technology for Softcat staff
Carbon Disclosure Project disclosure for FY2021 (including all scopes)
Introduction of a hybrid working policy that allows employees to work remotely
Continued compliance with 14001 and ISO 50001 across all UK locations
Science-based targets (near and long-term targets approved)
Direct delivery to customers from Softcat’s suppliers with no middle management, which results in minimal
logistics emissions
Corporate clothing recycling bins across all ofﬁces
Replacement of existing pool car ﬂeet with EVs
Solar panel installation at Marlow head ofﬁce
Supply chain review, including all vendors, suppliers and partners
External emission assurance across scope 1, 2 and 3 emissions reported
Employee e-waste solution across all ofﬁces
Key: To be progressed Goal complete
Regulatory and other disclosures
GHG emissions
Our emissions have been calculated using the GHG Protocol Corporate Accounting and Reporting Standard (revised edition),
together with the latest emissions factors from the Department for Environment, Food & Rural Affairs (‘DEFRA’) and the
Department of Energy & Climate Change (‘DECC’).
• Scope 1: comprises emissions from our pool cars and natural gas burnt in boilers we control.
• Scope 2: comprises our electricity consumption in leased and owned buildings.
• Scope 3: comprises all indirect emissions (not included in scope 2) that occur across our value and supply chain.
Softcat intensity measurements
We have chosen to present our total emissions relative to the average number of employees in order to represent how our
emissions are impacted by the growth of our business. We also present, for additional information, our emissions relative to
ourturnover. Commentary on the steps we take to reduce energy consumption and reduce our carbon footprint is provided
elsewhere in this report.
FY2024 FY2023 FY2022 FY2021 FY2020 FY2019
tCO
2
e/£m 0.14 0.22 0.21 0.20 0.30 0.51
tCO
2
e/employee 0.19 0.26 0.28 0.23 0.22 0.39
82 Softcat plc Annual Report and Accounts 2024
Energy efﬁciency
This Annual Report describes elsewhere
measures taken to increase energy
efﬁciency. The following explains in part
the actions taken to reduce emissions
and to improve the measurement of
emissions so that further actions can
beconsidered:
• Our UK-based ofﬁces are in modern
buildings and use renewable energy
where possible. Some of our ofﬁces
have recently switched to 100%
electricity usage so there is no reliance
on gas consumption in those locations.
• We have installed solar panels
atourMarlow ofﬁce. The on-site
generation from these provides a
material contribution to the ofﬁce’s
energy consumption.
• We are committed to 100%
renewable electricity across all of
our locations. The reduction in scope
1 and scope 2 emissions reﬂects
emissions savings achieved by
switching to renewable electricity
tariffs. Where Softcat can not use
renewable tariffs at its locations,
it will purchase Energy Attribution
Certiﬁcates (‘EACs’).
• We continue to utilise, where
appropriate, technology such as
video conferencing, which reduces
business travel.
• Our ﬂexible working policies, which
include hybrid working, reduce
employee commuting.
• Our internal combustion car pool
ﬂeet has been replaced with EVs.
Waste management and water are
included within our emissions calculations.
Given the nature and operation of our
business, we do not consider impacts
relating to biodiversity and use of land
to be material.
Use of carbon offsetting
Whilst on our journey to net zero and our
commitment to science-based targets,
we are working with accredited partners
to offset our scope 1 and scope 2
emissions and operational scope 3
emissions (including waste, business
travel and employee commuting). We
use carbon credit approved offsetting
schemes, making ﬁnancial contributions
to the equivalent of the emissions to be
offset. All of the above emissions for
FY2023 have been offset and will be
offset for FY2024.
Softcat will invest in a Veriﬁed Carbon
Standard carbon removal project
tooffset emissions from employee
commuting, business travel, fuel and
energy-related activities, and waste.
Theproject’s main objectives are wood
production, land restoration, and carbon
sequestration through afforestation.
Ouraim is to invest in nature as well as
toreduce greenhouse gas emissions,
inline with the ‘beyond value chain
mitigation‘ approach from the
Science-Based Targets initiative.
Climate-related Financial Disclosures and sustainability continued
Energy consumption
This disclosure is made in accordance with
The Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018, which
requires certain companies to report on
energy consumption andefﬁciency.
Energy consumed
Million kilowatt hours
1.95
1.95
2.59
2.75
1.79
24
23
22
21
The above ﬁgure relates to Softcat plc.
Itconsists of the aggregate of the annual
quantity of energy: (i) consumed from
activities; and (ii) consumed resulting
from the purchase of electricity or
certain other energy products.
Theﬁgure was calculated following UK
Government Environmental Reporting
Guidelines including Streamlined
Energyand Carbon Reporting guidance
(March2019). The aggregate quantity
ofenergy consumed in FY2024 includes
energy consumed in our ofﬁce in Ireland
and inthe USA.
GHG emissions
GHG emissions are calculated in line with the GHG Protocol Corporate Accounting
and Reporting Standard, using UK Government GHG conversion factors 2023.
Assurance in respect of emissions data for FY2023
In respect of scope 1 and scope 2 emissions, Softcat engaged the independent ﬁrm
Bureau Veritas to provide assurance over selected sustainability indicators, including
those contained in the 2023 Annual Report. In respect of scope 3 emissions,
Softcatengaged the independent ﬁrm NQA to provide assurance over selected
sustainability indicators, including those contained in the 2023 Annual Report.
Thescope of work undertaken by Bureau Veritas and NQA was limited assurance
regarding the respective emissions scope data.
Assurance statements in respect of FY2023 are available in the Trust section of
theSoftcat website. Softcat intends to obtain assurance in respect of its FY2024
emissions data and assurance statements will also be available on the website.
Scope 1 and scope 2 emissions
tCO
2
e
96
96 0 96
342
563
386
184 158
229 334
82 304
24
23
22
21
Key: Scope 1 Scope 2
Scope 3 emissions
tCO
2
e ’000
366
366
357
383
249
24
23
22
21
FY2024 scope 2 emissions are market-based. The zero ﬁgure shown above for scope
2 in FY2024 follows the purchase of Energy Attribution Certiﬁcates (‘EACs’) in respect
ofour ofﬁce locations where using renewable energy directly has not been possible.
Scope 2 emissions shown above for the prior FY2023 are materially different to
FY2024 as these relates to emissions before to the purchase of EACs. FY2024 scope 3
emissions increased mainly due to ongoing business growth, customer demand and
also as a result ofimproved primary data collection.
Regulatory and other disclosures continued
83Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Direction
and
oversight
Risk management
Effectively managed risk
Overview
Last year, we adopted a more strategic and structured approach to
riskmanagement, enabling us to proactively identify and address risks.
Ourapproach to risk and internal controls is based on elements of the
widelyrecognised ‘Internal Control – Integrated Framework’ published
bytheCommittee of Sponsoring Organizations of the Treadway
Commission(‘COSO’).
This year, we have continued to mature and evolve our risk management approach, building on the three-tier architecture we
adopted last year. We have embedded this framework further acro ss the organisation, strengthening our second-line functions,
engaging staff to promote a culture of risk awareness, and developing and deploying risk registers for key areas.
Risk governance
Board
The Board provides overall
governance on risk management.
Itapproves strategy and sets the
riskappetite.
Audit Committee
The Audit Committee, on behalf
ofBoard, monitors the effectiveness
of risk management, internal
control and the internal audit
function. It reviews estimates and
judgements made by management
in ﬁnancial statements.
Executive Directors and
Seniorand Extended
Leadership Teams
Senior executives are responsible
for setting and implementing
strategy and discuss this with the
Board. Theyare also responsible
forpolicy management and for
ensuring that risks are proactively
identiﬁed and effectively
managedin achieving the
organisational objectives.
Third line
• The internal audit function
provides independent assurance.
• Reports to the Audit Committee.
• Adopts risk-based approach
and tests design and operating
effectiveness of policies,
procedures and controls.
• Other assurance providers
conduct reviews and
provide reports.
First line
• Front line business operations.
• Responsible for correct
and consistent application
of organisational policies
andprocedures.
• Responsible for day-to-day
riskmanagement.
Second line
• Comprised of governance,
risk and control management,
legal, company secretarial
andinformation security.
• Oversees compliance and
riskmanagement matters.
• Supports ﬁrst line in risk
identiﬁcation and management.
Reporting
and
escalation
84 Softcat plc Annual Report and Accounts 2024
Risk appetite
We recognise the need for informed risk
taking in order to deliver sustainable
andproﬁtable business growth in line
with our values and strategy. Our ‘risk
appetite’ is reviewed and approved
bythe Board each year. The Senior
Leadership Team is responsible for
operating the business within the
riskappetite approved by the Board.
Our risk appetite ratings are deﬁned
asfollows:
Low: We aim to mitigate these
risks to the fullest extent possible
Balanced: We accept broadly
predictable risks where there
arebusiness beneﬁts of carrying
thatrisk
High: We seek out opportunities
with attractive potential upsides,
take considered risks and manage
the consequences
Assessing key risks against our risk
appetite enables us to understand
areaswhere we are operating within
oroutside the target risk appetite. This
allows management to consider the
actions required to achieve the target
appetite. Our risk appetite varies across
different principal risks, which are set
out on pages 86 and 88.
Risk management methodology
Our framework
Integrated three lines model and COSO internal control framework: As outlined in the risk governance section, the ‘three lines’
model helps organisations identify structures and processes that best assist in the achievement of objectives and facilitate st rong
governance and risk management. COSO’s ‘Internal Control – Integrated framework’ outlines how internal controls can be
operationalised to achieve an effective system of internal controls.
This year, we have further strengthened and embedded our three lines approach, enhancing our integration of COSO’s internal
control framework. We have made signiﬁcant progress in the key elements of risk management – effective identiﬁcation,
management, monitoring, and reporting of risks and controls – underpinned by clearly deﬁned responsibilities and structures.
These efforts have not only solidiﬁed our governance framework but also improved our overall risk management effectiveness
throughout the year.
Tier 1
Tier 2
Tier 3
• Strategic threats to our business.
• Owned by Directors and senior leaders.
• Published externally providing insight for our investors.
• Underlying signiﬁcant risks across the business.
• Risks managed by Directors and the Senior and
ExtendedLeadership Teams across the business.
• Maintained in ‘key risk’ register.
• First line and second line operational risk registers.
• Risks are closely aligned with core business processes.
• Used for identifying and managing day-to-day risks.
During the year, we further strengthened the three-tier risk management architecture to improve clarity and understanding
around principal risks and their management across the business. Principal risks are often made up of one or more key risks.
Keyrisks are linked to process level risks.
Risk categories
Risk categories play a key role in
effective risk management. They help
identify, group and assign risks to
theright leaders and mangers within
thebusiness. This also enables a
comprehensive assessment of the
overall risk landscape. We identify our
current key risks under these categories,
which have not changed over the year.
A
Business strategy
Risks which have the potential to impede
the achievement of our strategic goals
orimpact our business model.
B
Operational
Risks (both external and internal) that
could impact day-to-day operations and
prevent business-as-usual activities.
C
Financial
Risks that could impact the proﬁtability
or ﬁnancial viability of the Group
orincrease economic exposure.
D
People
Risks that could impact our ability
toattract, retain and motivate the
verybest employees.
E
Regulatory and compliance
Risks in respect of complying with
ongoing and increasing regulatory and
compliance requirements for Softcat.
Read more onpages 86 to 88
Three-tier risk management architecture
Principal risk
Key risk
Process
level risk
Key risk
Process
level risk
Process
level risk
Risk management continued
85Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Process
Risk management is aligned to our
strategy, and each principal risk and
uncertainty is considered in the context
of how it relates to the achievement
ofour strategic objectives and risk
appetite. Ownership for each principal
risk is assigned to a Director or senior
leader based upon alignment with
operational duties.
First line teams and leaders identify,
evaluate, escalate and record risks. They
also identify appropriate risk management
activities and action them. Information
on identiﬁcation, assessments and
actions are captured in operational
riskregisters.
The second line function oversees the
overall risk management and internal
control process. It reviews the operational
risk registers, updates thekeyrisk register
based on insights and interviews with
risk owners and managers from across
the business, updates principal and
emerging risks, perform sample checks,
provides feedback to ﬁrst line teams,
and undertake a formal risk management
and internal control effectiveness
reviewat least twice a year.
The Audit Committee, on behalf of the
Board, reviews the effectiveness of the
risk management functions and receives
assurances on the effectiveness of key
controls in the business. This process
provides an effective combined
‘bottom-up’ and ‘top-down’ approach
toensure risks have been considered from
different perspectives. The key risk
register is reviewed at least twice a year
bymanagement to ensure that it remains
current, as the business and its markets
evolve. Management is responsible for
ensuring that risks remain within the target
risk appetite and where gaps are
identiﬁed, that plans have been put in
place to address them. Management also
add new risks and remove existing risks to
risk registers as appropriate, following
review. The Risk, Assurance and Process
Improvement team maintain oversight to
ensure that identiﬁed remedial actions
onrisks are progressed. The Audit
Committee reviews key risks, including
emerging risks and the overarching
principal risks, bi-annually at the half year
and full year. The Audit Committee also
reviews the Viability Statement, which
considers the potential impact over
thelonger term of some of the key risk
factors. The Audit Committee receives
reports from management and from
internal audit onkey areas of risk and
control and challenges management
onthe timelines and effectiveness of
corrective action. TheAudit Committee
also considers the ﬁndings and
recommendations of the external
auditorwith regard to ﬁnancial controls.
The Audit Committee then makes
arecommendation to the Board for
ﬁnalapproval.
Climate change
During the year, in line with the
approach recommended by the
published Climate-related Financial
Disclosures (‘CFD’), we conducted a
formal assessment of the potential
impact ofclimate change to our business
and supply chain. Please see our report
on CFD and sustainability on pages
60to82. Climate change is already
acomponent of the risk of failure to
respond to market changes when
considering the needs ofour customers
and how products, services and
solutions might be affected by the drive
towards carbon neutrality. Our current
analysis concluded that noother climate
change-related riskisaprincipal risk
which needs to beincorporated into
thelist of principal risks shown.
Principal risks
The Board has identiﬁed the principal
risks facing the Group and considered the
likely impact that each could have on the
business. There is also a Board-approved
deﬁnition for material emerging risks
and a process is in place which requires
the CFO to escalate promptly any such
risk to the attention ofthe Board.
Set out on pages 86 to 88 is the Board’s
view of the principal risks currently
facing the Group, along with commentary
on how this might impact progress against
our strategic goals. We provide a view
on the change in risk compared to the
prior year’s assessment. Following
review the Board concluded that the
only change in risk proﬁle from the
prioryear related to our principal risk
‘Failure to respond to market changes
including technology offering, channel
disintermediation, competitor landscape
and customer needs’. The risk proﬁle
rose primarily due to the ongoing
rapidevolution of technology, including
AIand potential changes in customer
purchasing behaviours. To address
thisrisk, we are further developing
ourcapabilities to help our customers
through these changes and we are
reﬁning our customer technology
propositions. These mitigating actions
are designed to maintain our relevance
to our customers and to expand our
addressable market.
Issues associated with each of the
principal risks below have been
discussed and reviewed by the Board
orrelevant Committee on a regular
basis, for example the Board/relevant
Committee has discussed updates
oncyber security, the macro-economic
environment, forthcoming changes
inregulation/legislation, customer
satisfaction and changes in Softcat’s
leadership team. During the year, the
Board also considered other emerging
external matters, for example our
expanding multi-national business,
changes in technology (such as AI)
andmarket changes which might
impacton our operating model.
Some of the key risks are also reﬂected
in scenario planning as part of the
Group’s assessment of viability over
thelonger term. Please see the Viability
Statement on page 89 for further details.
An explanation of how the Group
manages ﬁnancial risks is provided
innote 21 to the ﬁnancial statements.
Anexplanation of the Company’s approach
to critical accounting judgements and
key sources of estimation uncertainty
isalso provided in note 1 to the
ﬁnancialstatements.
86 Softcat plc Annual Report and Accounts 2024
Principal risks and uncertainties
Business strategy
Failure to respond tomarket
changes including technology
offering, channel disintermediation,
competitor landscape and
customer needs
Change from 2023
Slight increase
Target risk appetite:
Low
Potential impacts
• Loss of competitive advantage
• Reduced number of customers
andproﬁt per customer
Management and mitigation
• Insight from ongoing industry
analysis and subscriptions input
intoannual strategy process
• Regular insights into customer
priorities including climate related
through the annual customer
experience survey results and
‘voice of the customer’ surveys.
Multi-layered relationship with
strategic vendors and executive
sponsor alignment
• Regular quarterly business reviews
with vendors
• Regular meetings between
senior representatives from
sales,technology and vendor
management teams to review
technology and market trends
andcustomer propositions.
Link to strategy
Operational
Customer dissatisfaction
Change from 2023
No change
Target risk appetite:
Low
Potential impacts
• Reputational damage
• Loss of customers
• Financial penalties
Management and mitigation
• Dedicated customer experience
team, which manages and escalates
customer dissatisfaction cases
• ISO 20000-1 IT Service
Management and ISO 9001
QualityManagement certiﬁed
• Ongoing customer service
excellence training
• ‘Big-deal review’ process
Link to strategy
Cyber security risk and business
interruption risk
Change from 2023
No change
Target risk appetite:
Balanced
Potential impacts
• Inability to deliver customer services
• Reputational damage
• Financial loss
• Customer dissatisfaction
Management and mitigation
• ISO 27001 accredited processes.
Group-wide information
securitypolicy and mandatory
security-related training
• Regular testing of disaster recovery
plans and business continuity plans
• Established and documented
processes for incident management,
change control, etc.
• Ongoing upgrades to network
• All employees issued with corporate
devices with standardised access
monitoring and control
• Key software used is from large
multi-national companies who have
a 99.9% SLA and who also provide
us with SOC 2 reports that provide
assurance on their processes
and controls
• Annual penetration test by
athird party
Link to strategy
A B
Risk management continued
Acquire more
customers
See page 30
Sell more to
existing customers
See page 30
Maintain relevance and expand
our addressable market
See page 30
Ease of
doingbusiness
See page 30
People and culture
See page 30
87Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Financial
Macro-economic factors, including
geo-political conditions, impact on
customer sentiment, inﬂationary
pressures, interest and foreign
currency volatility
Change from 2023
No change
Target risk appetite:
Balanced
Potential impacts
• Short-term supply chain disruption
• Reduced margins
• Reduced customer demand
• Reduced proﬁt per customer
• Higher operating costs
• Customer insolvencies and
cashcollection challenges
Management and mitigation
• Customer base is well diversiﬁed in
terms of both revenue concentration
but also public and commercial
sector exposure
• Close dialogue with supply
chain partners
• Market conditions are factored
inourannual budgeting process
• Operating costs are budgeted
andreviewed regularly
• Going concern and viability
statements are underpinned
byrobust analysis of scenarios
Link to strategy
Ineffective working
capitalmanagement
Change from 2023
No change
Target risk appetite:
Balanced
Potential impacts
• Increased bad debts
• Increased cost of operations
Management and mitigation
• Robust credit assessment
process including use of trade
credit insurance
• Regular review of the aged debt
position by management
• Deﬁned treasury policy covering
liquidity management processes
andthresholds
• Regular cash forecasting, actual
reporting and variance analysis to
highlight any adverse trends and
allow sufﬁcient time to respond
Link to strategy
Failure to retain competitive terms
with our suppliers and/or to
right-size our cost base compared
to gross proﬁt generated
Change from 2023
No change
Target risk appetite:
Balanced
Potential impacts
• Uncompetitive pricing leading
tolossof business
• Reduced proﬁtability/margins
Management and mitigation
• Budgeting process and regular
reviews ensure costs are
managed appropriately and in
consideration of gross proﬁt growth.
Anyout ofbudget spend needs
management-level approval
• Rebates form an important, but
only minority element of total
operating proﬁt. In addition, rebate
programmes tend to be industry
standard and not speciﬁc to the
Group, while vendor-alliance teams
ensure we optimise available
rebatestructures
• Ongoing training to sales and
operations teams to keep pace
withnew vendor programmes
Link to strategy
C
Acquire more
customers
See page 30
Sell more to
existing customers
See page 30
Maintain relevance and expand
our addressable market
See page 30
Ease of
doingbusiness
See page 30
People and culture
See page 30
88 Softcat plc Annual Report and Accounts 2024
People
Loss of culture
Change from 2023
No change
Target risk appetite:
Low
Potential impacts
• Reduced staff engagement
• Negative impact on customer service
• Loss of talent
Management and mitigation
• Culture sits at the heart of all changes
that are made in Softcat. There is
regular communication from Senior
Leadership Team members to
employees at ‘Kick Off’ and ‘all hands’
calls about the importance of culture
• Regional ofﬁces with empowered
local management
• Quarterly management satisfaction
survey and annual all-employee
survey with feedback acted upon
• Regular staff events and incentives
• Enhanced internal communication
processes and events
Link to strategy
Talent, capability and
leadershiprisk
Change from 2023
No change
Target risk appetite:
Low
Potential impacts
• Lack of strategic direction
• Reduced staff engagement
• Loss of talent
• Loss of competitive advantage
Management and mitigation
• Succession planning process in place
• Experienced and broad senior
management team
• Investment in robust recruitment and
selection processes
• Attrition tracked and action taken
as necessary
Link to strategy
Regulatory and compliance
Compliance with existing regulation/
legislation and being prepared for
emerging regulation/legislation
Change from 2023
No change
Target risk appetite:
Low
Potential impacts
• Financial penalties
• Reputational damage
• Loss of customers
Management and mitigation
• Signiﬁcant investment in a second
line of defence function (Risk
Assurance and Process Improvement,
Information Security, Legal and
Company Secretarial teams)
• Management committee in place
to review second line progress and
report to the Audit Committee
• Ongoing engagement with specialist
third parties where required
Link to strategy
D E
Risk management continued
Principal risks and uncertainties continued
Acquire more
customers
See page 30
Sell more to
existing customers
See page 30
Maintain relevance and expand
our addressable market
See page 30
Ease of
doingbusiness
See page 30
People and culture
See page 30
89Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Viability statement
In accordance with the UK Corporate Governance Code, the Directors
haveassessed the viability of the Group and Company over a three-year
period to 31 July 2027, which is a longer period than the twelve-month
outlook required in adopting the going concern basis of accounting.
Thisassessment period remains appropriate given the timescale of
theGroup’s planning and investment cycle.
The Directors conﬁrm that they have
performed a robust assessment of the
principal risks facing the Group as
detailed on pages 86 to 88, including
those that will threaten its business
model, future performance and solvency
or liquidity.
The Group’s gross invoiced income has
grown on average 17% in the last three
years. This has been achieved by gaining
market share through increasing the
number of customers as well as increasing
spend per customer year on year. Against
a backdrop of high inﬂation and increasing
interest rates which have put pressure
onour customer base, the Group has
displayed a large degree of resilience to
challenging conditions, evidenced by an
increase in gross proﬁt of 12% in FY2024.
The year-to-date trading to the end of
September 2024 shows growth in line
with the base case forecast.
As of September 2024, the principal
challenges to short-term business
performance are a downturn in the
UKeconomy, resulting from higher
broad-based inﬂation and increasing
interest rates which affect both our direct
customers and limit the discretionary
spend of the end users of their products
and services. This may result in delayed
decisions on non-critical projects as well
as enhanced procurement processes
which ultimately could push spend into
future periods. Higher than normal risk
of credit losses remains. These factors
have been assessed within the Group
risk review and discussed within the
Strategic Report.
The assessment of the Group’s viability
considers severe but plausible scenarios
aligned to the principal risks and
uncertainties set out on pages 86 to 88,
and the assessment was based on the
severe but plausible scenario set out in
our going concern assessment. The
realisation of these risks, to the extent
modelled, is considered highly unlikely.
The degree of severity applied in
theviability scenarios was based on
management’s experience and knowledge
of the industry to determine plausible
changes in assumptions. The most
relevant potential impact of the key
riskson viability are:
• a substantial and sustained shortfall
in revenue and gross invoiced
income compared to the budget and
strategic three-year plan resulting
from a signiﬁcant and extended
downturn in the UK economy and
resulting fall in spend;
• a fall in achievable gross margins
resulting from margin pressure
associated with lower demand
and increased competition for the
remaining business;
• signiﬁcantly increased levels of bad
debt losses in the ﬁrst year of the
modelled period, to coincide with the
challenges of higher inﬂation, interest
rates and less discretionary spend
forconsumers; and
• an ongoing increase in the working
capital cycle, speciﬁcally driven by a
delay in customer payments versus
historical levels.
The following stress testing over a
three-year period has been performed
(i) against the budget approved by the
Board for the 2025 ﬁnancial year; and
(ii)against the remaining two ﬁnancial
years (i.e. 2026 and 2027) of the
three-year plan:
• an average 5% year-on-year reduction,
compared to the original budget and
three-year strategic plan, in revenue
and gross invoiced income;
• reduced gross proﬁt margins of 0.5%
compared to the original budget and
three-year strategic plan;
• savings in discretionary
areas of spend;
• bad debt write offs of £4.2m above
budgeted levels in FY2025, FY2026
and FY2027; and
• extending the length of debtor
days by three days across the three
years (thus negatively impacting
working capital).
The Group beneﬁts from a ﬂexible
business model with a high proportion
of costs linked to performance, such as
commission, no warehousing of unsold
products and a low operating cost base,
consisting of mostly staff costs. On top
of the natural reduction in some of
theseoutﬂows as proﬁtability reduces,
management could, if necessary, take
mitigating actions (for example, the ability
to adjust the level of discretionary special
dividend) providing opportunities for the
business to make further decisions on the
cost base of the business.
Despite the minimum desired cash
position being achieved in the severe but
plausible scenario through a reduction
inplanned special dividends and delay
payments to suppliers foregoing early
settlement payments, the following
options also exist for management:
• reduced salary costs, through
recruitment restrictions on new heads
and not replacing leavers;
• no interim dividend in H2 of FY2025
or thereafter;
• savings in discretionary
areas of spend;
• short-term supplier
paymentmanagement.
The Group operates a ﬂexible model
inaresilient industry that incorporates
an increasing level of non-discretionary
spend from UK corporates as IT has
become vital to establish competitive
advantage in an increasingly digital age.
In public sector, a fast-growing area
ofthe business, spending has also
continued to be strong as investment in
IT continues at pace in order to provide
the best level of service to the public.
Financially, signiﬁcant free cash ﬂow
generation and the strength of the
Group’s balance sheet provide comfort
around the ability to absorb the impact
of the stress tests outlined above.
Conﬁrmation of viability
Based on the analysis, the Directors have
a reasonable expectation that the Group
and Company will be able to continue
inoperation and meet their liabilities as
they fall due over the three-year period
of their assessment.
90 Softcat plc Annual Report and Accounts 2024
Compliance with the UK
CorporateGovernance Code
Introduction to corporate governance
Inside this section:
147
Directors’ report
125
Remuneration Committee report
123
Sustainability Committee report
117
Nomination Committee report
107
Audit Committee report
92
Introduction to corporategovernance
96
Governance report
93
Board leadership and Companyfocus
91Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Board leadership and
Company purpose
The Board is responsible for
establishing Softcat’s purpose,
engaging and building
strong relationships with our
shareholders and stakeholders,
and promoting the long-term
success of Softcat.
Read more on pages 93 to 95
Division of responsibilities
The Board has clear divisions of
responsibilities and promotes a
culture of openness and debate.
Read more on pages 96 and 97
Composition, succession
and evaluation
We regularly evaluate the
composition and the succession
of the Board to ensure we
are effective, considering
diversity and the balance of
experience, skills, knowledge
and independence.
Read more on pages 100 and 101
Audit, risk and
internalcontrol
We present a fair, balanced and
understandable assessment
of Softcat’s position and
prospects. Our decisions are
discussed within the context
oftherisks involved.
Read more on pages 107 to 116
Remuneration
Director remuneration is
designed to support Softcat’s
strategy, purpose and values,
and promote the long-term
success of the Company.
Read more on pages 125 to 146
Sustainability
We operate a Sustainability
Committee to provide
Board-level oversight onour
sustainability strategy, targets
and progress towards a lower-
carbonbusiness.
Read more on pages 123 and 124
92 Softcat plc Annual Report and Accounts 2024
Introduction togovernance
This report highlights
ourgood governance
which is vital for
effectiveaccountability.
Graeme Watt
Non-Executive Chairman
The Board has beneﬁted from an
infusion of new thinking following the
appointments of Katy, Jacqui Ferguson
and Mayank Prakash. Jacqui and
Mayankare independent Non-Executive
Directors and their appointments also
increase the independence composition
of the Board. Your Board ﬁrmly believes
that these appointments and the overall
composition of the Board are in the best
interests of the Company’s stakeholders.
We continue to operate a strong and
effective system of governance which
demonstrates good leadership and
oversight of our responsibilities.
We have conducted our annual Board
effectiveness evaluation. Jacqui is also
our Senior Independent Director and
she has conducted a formal review of
myperformance, which she led in a
discussion with the Board at which I was
not present. The reviews concluded that
your Board continues to work well.
I would like to thank my fellow Directors for
their ongoing support after completing my
ﬁrst full year as Non-Executive Chairman.
If you have any questions or comments
on the reports, I will be pleased to hear
from you and I can be contacted via the
Company Secretary at cosec@softcat.com.
Graeme Watt
Non-Executive Chairman
23 October 2024
Dear shareholder
I am pleased to present this year’s
reporton governance. The reports in
this section explain the role of the Board
and the various standing Committees
which support the Board and the work
they have undertaken this year. This
report highlights our good governance
which is vital for effective accountability,
stakeholder engagement and oversight
of Softcat’s strategic direction.
The 2018 UK Corporate Governance Code
(the ‘Code’) (a copy of which isavailable at
www.frc.org.uk) is applicable to Softcat for
the ﬁnancial year ended 31July 2024. I am
pleased to conﬁrm that your Company
hascomplied with the principles and
provisions of the Code during the year
with one exception. In respect of Provision
9 of the Code, I was not independent on
appointment as Non-Executive Chairman
on 1 August 2023. This is because I was
Softcat’s previous Chief Executive Ofﬁcer
until 31July 2023.
When deciding on my appointment
asChairman, the Board recognised that
the Code states that the chair should on
appointment meet the independence
criteria and that ordinarily the chief
executive should not go on to be the
chair of the same company.
Prior to me becoming Chairman,
detailed conversations were held with
the Board and plans agreed to ensure
that my role as Chairman was very clear
to the Board, our shareholders, our
employees, other stakeholders of the
business and to me. We remain conscious
that it is not seen as best practice for
aformer CEO to be chair ofthe same
company. However, all oftheBoard and
the Nomination Committee conﬁrmed
they believe we have a clear framework
for the roles of the Chairman and of the
CEO and there is a clear separation
between those roles. TheBoard was
unanimous that my knowledge of the
business and Softcat’s culture and its
markets were essential in the role of
Chairman tocontinue to best support
theinterests of all our stakeholders.
Graham Charlton fully assumed all
oftheCEO’s executive responsibilities
from 1 August 2023, supported by
KatyMecklenburgh as CFO, who joined
in June 2023. I have not been involved
inany operational matters, other than
acting as an occasional sounding board
for Graham in much the same way that
any good Chair should. We have a clear
and successful operating model and an
understanding that the CEO runs the
Company, not the Chairman.
Introduction to corporate governance continued
93Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Board leadership and Company focus
Your Board of Directors
7
6
1
2
4
8
5
3
Tenure of Directors
9yrs 7mths
2. G Charlton
6. R Perriss
5yrs 3mths
5. V Murria
8yrs 11mths
6yrs 6mths
1. G Watt
7. L Weedall
2yrs 5mths
3. K Mecklenburgh
1yr 4mths
8. M Prakash
1yr 1mth
4. J Ferguson
9mths
Directors’ experience
Skills Number of Directors
Finance 4
Marketing 5
Operations 8
Management 8
Technology 5
VAR sector 2
Board composition (%) Allocation of timeBoard gender diversity (%)
Chair: 12.5%
Independent Non-Executive
Directors: 62.5%
Executive Directors: 25%
Corporate governance and
investor relations: 15%
Financial performance: 25%
Risk: 15%
Strategy and operations: 45%
Male: 37.5%
Female: 62.5%
Board overview
Read biographies on pages 94 and 95
94 Softcat plc Annual Report and Accounts 2024
Board leadership and Company focus continued
Our business is led by our Board of Directors. Biographical and other
details of the Directors as at 23 October 2024 are as follows:
1
Graeme Watt
Non-Executive Chairman
Appointed to the Board:
1 April 2018 (and became
Chairon 1 August 2023)
Committee membership:
N
D
S
Key strengths
• Extensive knowledge of the
sector, distribution and the
reseller channel
• Strong commercial skills
• Business and
systemtransformations
• Mergers and
acquisitionexperience
• Strong leadership skills and
delivery of growth in very
sizeable business units
• Deep understanding of the
Softcat business and culture
• Wealth of ﬁnancial and
riskknowledge
Current external
commitments
Chairman, Inﬁnigate Holding AG.
Previous roles
Graeme joined Softcat in April 2018
as CEO, a role which he held until
31 July 2023. On 1 August 2023
hewas appointed Non-Executive
Chairman. Graeme is also the
non-executive chairman of
Inﬁnigate Holding AG. He has
builtover 35 years of channel
experience in the IT distribution
industry. Before he joined Softcat,
Graeme was senior vice president
EMEA, advanced and specialist
solutions, Tech Data Corporation
(‘Tech Data’), a position he held
from March 2017. He was promoted
to that role when Avnet’s
technology solutions business
wasacquired by Tech Data in early
2017. Prior to that, he was president
for Avnet Technology Solutions,
EMEAfor almost seven years and a
member of Avnet’s global executive
committee. He previously spent six
years at Bell Micro (as president of
global distribution) and his earlier
career included roles at Tech Data
(president EMEA) and Computer
2000 (managing director UK &
Ireland). Graeme is a chartered
accountant and graduated from
Edinburgh University having
readPhysiology.
2
Graham Charlton
Chief Executive Ofﬁcer
Appointed to the Board:
19 March 2015 (and became
CEOon 1 August 2023)
Committee membership:
D
S
Key strengths
• Strong leadership skills
• Strong ﬁnancial and
commercial skills
• Extensive experience
inboth ﬁnancial and
generalmanagement
• Deep understanding of the
Softcat business and culture
• Signiﬁcant experience of
ﬁnancing and capital raising
Current external
commitments
None.
Previous roles
Graham was CFO of Softcat
between March 2015 and July
2023 and was appointed CEO
inAugust 2023. Before Softcat,
Graham spent four years
asﬁnance director at
comparethemarket.com. Prior
tothat, Graham spent one year
asﬁnance director at See Tickets
(the trading name of See Group
Limited) and over ﬁve years in
various roles, including group
ﬁnancial accountant, ﬁnance
manager and ﬁnance director,
decision analytics, at Experian
Ltd. Graham is a chartered
accountant and began his
careerwith Andersen.
3
Katy Mecklenburgh
Chief Financial Ofﬁcer
Appointed to the Board:
19 June 2023
Committee membership:
D
S
Key strengths
• Strong leadership skills
• Strong ﬁnancial and
commercial skills
• Extensive experience in
commercial ﬁnance and
audit matters
• Previous signiﬁcant senior
ﬁnance roles across a range
ofindustries
Current external
commitments
None.
Previous roles
Katy joined Softcat in June 2023.
Previously, she was interim chief
ﬁnance ofﬁcer at ASOS plc. Prior
to that, she spent three years as
group controller at Inchcape plc.
She has held various other
positions across a range of
industries and blue-chip ﬁrms.
Katy was head of ﬁnance at
Amazon and ﬁnance director
atSerco and she spent over a
decade at Procter and Gamble
where she held a series of senior
ﬁnance roles. Katy is a chartered
management accountant. She
earned a BSc in Pharmacology
and a PhD in Respiratory
Medicine, both from
EdinburghUniversity.
4
Jacqui Ferguson
Senior Independent
Non-Executive Director
Appointed to the Board:
1 January 2024
Committee membership:
A
N
R
S
Key strengths
• Extensive experience as a
non-executive director of
listed companies
• Signiﬁcant sector knowledge
• Extensive knowledge in the
large scale, growth-oriented
business-to-business
technology environment
Current external
commitments
Chair of Tesco Bank, senior
independent director andchair
ofthe remuneration committee
ofCroda International plc,
non-executive director of
National Grid plc and deputy
chair of Engineering UK.
Previous roles
Jacqui was a non-executive
director at John Wood Group
PLC. She also held several
signiﬁcant executive roles at
Hewlett Packard, including senior
vice president and managing
director, and she held executive
roles at Electronic Data Systems,
including director of EMEA
strategic business planning.
Committee key
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
D
Disclosure Committee
S
Sustainability Committee
Chair
95Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
5
Vin Murria OBE
Independent Non-Executive
Director and Designated NED
for Workforce Engagement
Appointed to the Board:
3 November 2015
Committee membership:
A
N
R
S
Key strengths
• A seasoned and successful
entrepreneur with extensive
board experience
• A strong background in
technology-based businesses
coupled with a strong network
• Well-developed strategic and
commercial skills
Current external
commitments
Chair of AdvancedAdvT Limited
and non-executive director at
Bunzl plc.
Previous roles
Prior to joining Softcat, Vin spent
seven years as the founder and
chief executive at Advanced
Computer Software plc, before
its acquisition by Vista Equity
Partners in 2015, and ﬁve years
aschief executive of Computer
Software Group plc, before its
acquisition by HG Capital and
then Hellman & Friedman in 2007.
Previously, Vin was a non-executive
director at Sophos Group plc,
Zoopla Plc, Chime Communications
plc, MC Saatchi plc, Silicon Valley
Bank UK and DWF Group plc, and
chief operating ofﬁcer at Kewill
Systems plc.
6
Robyn Perriss
Independent
Non-Executive Director
Appointed to the Board:
1 July 2019
Committee membership:
A
N
R
S
Key strengths
• Wealth of ﬁnancial, risk and
governance knowledge
• Signiﬁcant investor relations
and capital markets experience
• Extensive experience
ofstrategic roles,
particularlywithin a
dynamicand fast-paced
progressive environment
Current external
commitments
Non-executive director at Next 15
Communications Group PLC and
Dr. Martens plc.
Previous roles
Robyn was ﬁnance director at
Rightmove plc, the UK’s largest
property portal, until 30 June
2019. Prior to being ﬁnance
director at Rightmove, Robyn
alsoheld senior roles as ﬁnancial
controller and company secretary.
Before joining Rightmove, Robyn
was group ﬁnancial controller
atthe online media business
AutoTrader.
She qualiﬁed as a chartered
accountant in South Africa with
KPMG and worked in both audit
and transaction services.
7
Lynne Weedall
Independent
Non-Executive Director
Appointed to the Board:
3 May 2022
Committee membership:
A
N
R
S
Key strengths
• Signiﬁcant experience
of senior positions in
human resources
• Extensive experience as
anon-executive director
oflisted companies
Current external
commitments
Non-executive director at
Dr.Martens plc, Greggs plc
andStagecoach Group Limited.
Previous roles
Previous senior executive
positions include group people
&culture director of Selfridges
Group, and group human
resources & strategy director of
Carphone Warehouse. Previous
non-executive roles include
Treatt plc, William Hill plc and
Greene King plc.
8
Mayank Prakash
Independent
Non-Executive Director
Appointed to the Board:
1 September 2023
Committee membership:
A
N
R
S
Key strengths
• Signiﬁcant experience
of senior positions in
various sectors
• A strong background across
operations, technology
and digital information and
transformations
Current external
commitments
Group chief operations ofﬁcer
ofEvelyn Partners Group Limited
and non-executive director
atUber in the UK.
Previous roles
Mayank held senior executive
positions including being chief
consumer digital and information
ofﬁcer of Centrica plc, managing
director, global wealth &
investment management
technology of Morgan Stanley,
chief digital & information ofﬁcer
of DWP and UK chief information
ofﬁcer of Sage Group plc.
Committee key
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
D
Disclosure Committee
S
Sustainability Committee
Chair
96 Softcat plc Annual Report and Accounts 2024
Governance report
Our governance framework
Attendance at Board and Committee meetings
Details of Board and Committee attendance during the 2024 ﬁnancial year are set out in the table below. All Directors are
expected to attend all Board and relevant Committee meetings.
Scheduled
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Sustainability
Committee
M e e t i n g s h e l d 75332
Meetings attended
Graeme Watt
1
7—3—2
Graham Charlton
1
7———2
Katy Mecklenburgh
1
7———2
V i n M u r r i a 75332
R o b y n P e r r i s s 75332
L y n n e W e e d a l l 75332
Mayank Prakash 75332
Jacqui Ferguson
2
43121
Notes:
1. Graeme, Graham and Katy are not members of the Audit or Remuneration Committees. Graham and Katy are not members of the Nomination Committee.
Each is, however, usually invited to the meetings as an attendee.
2. Jacqui joined Softcat in January 2024 and attended all meetings following appointment.
In addition to attending Board and Committee meetings, each Director devotes sufﬁcient time to the Company to ensure that
their responsibilities are met effectively. This includes preparation ahead of each meeting and, for the Chairman and Committee
Chairs, holding planning meetings and discussions with the relevant Executives or senior management ahead of a meeting
toensure that each meeting has been well prepared. The Chairman maintains frequent contact with all members of the Board
between meetings and has regular meetings with the CEO to keep apprised of material developments in the business and
withthe Company Secretary on Board planning and governance.
During the year, there were four meetings of the sub-Committee established by the Board to give ﬁnal approval to the release
ofthe Company’s trading results.
97Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Our Board
Matters reserved for the Board
The Board has a formal schedule of matters
reserved for its approval which is regularly
reviewed and updated. Matters include:
• our strategy, business objectives and
annual budgets to ensure we can deliver
long-term value to our shareholders;
• annual and half-year results and our
dividend policy;
• material acquisitions, disposals
andcontracts;
• major changes to internal controls, risk
management or ﬁnancial reporting policies
and procedures;
• determining our risk appetite;
• oversight of strategic sustainability objectives;
• major changes to our capital, corporate
ormanagement structure; and
• succession planning for the Board and
senior management.
Matters reserved can be found at www.softcat.
com/about-us/investor-centre/governance.
The Code expects certain roles of the Board
to be clearly set out. The Board has a formal
document outlining the key aspects of the
role of the Chairman, Chief Executive, Senior
Independent Director (‘SID’), Non-Executive
Directors (‘NEDs’) and Designated Director
for Workforce Engagement. This is regularly
reviewed, and the current version can be
found at https://www.softcat.com/about-us/
investor-centre/governance.
Board Committees
The Committees are required to support the work of the Board and they also provide the additional governance which is appropriate for a
company listed on the London Stock Exchange. The Committees have remained unchanged since last year and there has been no mater ial
change in their duties and responsibilities over the last year.
Audit
Committee
• Governance over
the appropriateness
of the Company’s
ﬁnancial reporting.
• Review and
recommendations
on the performance
and appointment
of both the internal
audit function and
theexternal auditor.
• Reviews of the
Company’s system of
internal control, risk
management and
compliance activities.
Read more on pages 107
to116
Nomination
Committee
• Evaluates Board
composition and
ensures Board diversity
and a balance of skills.
• Reviews executive
succession plans,
performance on diversity
and plans to improve
diversity and inclusion
inthe business.
• Oversees the
performance evaluation
of the Board, its
Committees and
individual Directors.
• Reviews employee
engagement and
the culture within
the business.
Read more on pages 117
to122
Remuneration
Committee
• Sets, reviews and
recommends the policy
on remuneration of the
Chairman, Executive
Directors and Senior
Leadership Team.
• Sets the pay of the
Executive Directors
andagrees their
participation in
bonusplans and certain
share-based incentives.
• Reviews the use of
share-based schemes
inthe Company.
• Sets a Remuneration
Policy for approval
by shareholders
and then manages
the implementation
ofthe Policy.
Read more on pages 125
to146
Sustainability
Committee
• Sets and approves the
sustainability strategy
of the Company.
• Reviews performance
against climate-related
targets, goals and
initiatives, and oversees
compliance with climate-
related regulations
anddisclosures.
• Reviews the
effectiveness of
management’s
practices for identifying
and monitoring
climate-related risks
andopportunities.
• Reviews, on behalf
of the Remuneration
Committee, the
achievement of
anysustainability
objectives set for the
Executive Directors.
• Reviews other corporate
responsibility issues
asrequested.
Read more on pages 123
and 124
Disclosure
Committee
• Supports the Board
in overseeing
the accuracy and
timeliness of Softcat’s
formal business
disclosures, including
disclosures made
in Softcat’s half and
full-year results.
Executive leadership
Senior Leadership Team (‘SLT’)
The SLT consists of the ten most senior Executives in the business, including the CEO and the CFO. The SLT is led by the CEO and is
responsible for leading the day-to-day operation of Softcat. The SLT focuses on:
• strategy
implementation;
• operational,
ﬁnancial and
competitive
performance;
• commercial
developments;
• succession
planning below
Board level;
• organisational
development; and
• maintaining
Softcat’s culture.
98 Softcat plc Annual Report and Accounts 2024
Governance report continued
Each year the Board reviews, discusses and approves a variety of matters. Some of the matters
are cyclical, for example the Board’s review of our half-year and full-year results. Some items are
discussed at each meeting, for example updates from the CEO and the CFO on business and ﬁnancial
performance. The below summarises some of the key matters considered by the Board during the year.
What the Board did this year
Strategy
The development and implementation
of Softcat’s strategy remained a key
focus for the Board. This has been
covered in a number of ways including:
• speciﬁc strategy review discussions
with the Board and key senior
Executives in February 2024;
• further updates from the CEO on
strategic priorities;
• updates on employee capability
anddevelopment;
• a discussion with external advisers in
respect of Softcat’s strategic position
in the market; and
• regular updates on key industry
trends and activities.
Performance monitoring
The Board has a robust process in place
for setting expectations and for regular
monitoring of business performance.
During the year, this included:
• review and approval of a three-year
plan at the same time as the strategy
review in order to provide a
comprehensive longer-term outlook.
Forecasts in the three-year plan are
subsequently refreshed as needed
during the year;
• approval of an annual budget,
followed by regular updates to the
Board comparing performance
against budget;
• a standing report at each Board
meeting from the CFO analysing
recent performance and other
ﬁnancial metrics;
• consideration of year-end and
half-year performance and
subsequent review, approval and
publication of the year-end and
half-year results;
• setting of a dividend policy. Dividend
payments are determined after
taking into account the Company’s
capital allocation framework (which
is also approved by the Board), the
Company’s ﬁnancial situation, the
needs of the business and any other
relevant circumstances; and
• an update from the Company’s
brokers on investor themes and
equity market matters.
Stakeholder engagement
The Board knows the importance of
being aware of the views of its key
stakeholders. These include our
shareholders, employees, customers,
vendors and communities. During the
year, we maintained our engagement
with stakeholders, which included
thefollowing:
• the Board met with a customer.
The meeting was very helpful to
gain perspectives direct from the
customer as to how Softcat provided
support to their business;
• the Board met with a key vendor. This
provided an opportunity to discuss
issues from the vendor’s viewpoint
and also to better understand key
interactions between the vendor
and Softcat;
• discussions with investors and
analysts, including their feedback
following meetings and after the
release of our annual and half-year
results announcements. We maintain
an investor relations programme
ofmeetings with existing and
potentialshareholders;
• Vin Murria is Softcat’s Designated
Non-Executive Director for Workforce
Engagement. During the year, the
Board agreed a revised way to
engage with employees, with each
Non-Executive Director engaging
with a selected Softcat ofﬁce;
• reviewing the feedback from
employee surveys. This includes
regular surveys of the managers in the
business and our annual all-employee
survey to gauge the wellbeing and
satisfaction of employees;
• the Chairman undertook an investor
engagement programme, inviting
engagement with our top 50
shareholders, to further strengthen our
mutual understanding of governance
matters. The Chairman provided
the Board with a comprehensive
brieﬁng of the key themes arising
from the engagements and on agreed
actions; and
• the Board reviewed the outcomes of
Softcat’s annual customer satisfaction
survey and the actions to further
improve engagement with customers.
99Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Governance and risk
During the year, the Board:
• continued its focus on environmental
strategy, targets and performance
through the Sustainability Committee
of the Board (see pages 123 and 124);
• monitored the impact of the macro-
economic and political environment,
considering issues such as potential
new legislation following the change
of Government at the 2024 General
Election. The Board regularly
discussed the potential impact of
the economic environment on its
customers and suppliers;
• reviewed reports on governance and
legal issues, including changes in
legislation, developments in corporate
governance and sustainability;
• received feedback and comments on
governance from major shareholders;
• performed a review of Board
effectiveness, which was conducted
internally. An effectiveness review
of the Chairman was also led by the
Senior Independent Director;
• reviewed the Company’s risk appetite,
principal risks and uncertainties;
• considered and approved changes
to the delegation of authorities
to management. The Board also
reviewed whether changes were
required to the terms of reference for
each Committee and to the schedule
of matters reserved for Board
approval; and
• received regular governance and
regulatory updates.
People, vision and values
During the year the Board:
• had oversight of the changes to the
Board with the addition of two new
Non-Executive Directors;
• met with many of the members of
the Senior Leadership Team (‘SLT’)
and other senior managers in the
business. The CEO provided regular
updates to the Board on the SLT
and any changes in key roles in
the business;
• received regular updates on people
and HR matters, including capabilities
and development, culture and
diversity and inclusion;
• considered the results of the annual
employee survey and the quarterly
management team surveys; and
• through the Non-Executive Directors,
engaged with employees of Softcat’s
ofﬁces and reported back to the
Board to discuss their observations.
Other
The Board has also:
• approved the 2024 Annual Report
and Accounts;
• approved the 2024 Notice
of AGM; and
• reviewed regular reports which
analysed major changes in our
shareholder base.
100 Softcat plc Annual Report and Accounts 2024
Governance report continued
Composition, succession
andevaluation
Composition andsuccession
This is discussed in the Report from the Nomination Committee on pages 117 to122.
Board evaluation process
Each year the performance of the Board is assessed through an evaluation exercise. In accordance with the UK Corporate
Governance Code, the process this year was conducted internally (the Board having conducted an internal evaluation in 2023
andan external evaluation in 2022). The key stages of the process this year were:
Stage 6: Action planning
Following the Board review and discussion, it was agreed that the Company Secretary would prepare an action plan to address
points of recommended improvements. Progress will be tracked during theyear.
Stage 1: Approval of process
The Board agreed that the process for the year would be conducted internally. The Company Secretary discussed a process with the
Chairman and it was agreed to circulate a questionnaire forcompletion by each member of theBoard.
Stage 2: Approval of aquestionnaire
The Board and the Company Secretary
reviewed a draft questionnaire and
agreed to make changes to some of the
questions which had been asked in the
previous year’s survey. The purpose of
the revisions were to reduce the
number of questions asked, focusing on
the most important areas. There were
additional open questions which
helped to expand on the key issues and
points of feedback.
The areas in the survey included:
• Board processes;
• strategy oversight;
• contribution; and
• Committees.
The questionnaire asked each Director
to rate various topics using a four-point
rating system (poor, adequate, good
and excellent). Directors were also
asked to provide additional comments
to each question to give a more
qualitative view.
Stage 3: Collation of results
The surveys were conducted online and managed by an independent third party to ensure anonymity of responses, should a
Director not wish to attribute a comment. Individual responses were collated to provide a collective overview of the responses
and comments on each question.
Stage 4: Review of results
The Chairman and Company Secretary reviewed and discussed the collated survey results, highlighting key themes and areas
from the responses. These were summarised in a covering note and executive summary which was sent to the Board along with
the full survey results so the Board could consider the results ahead of a Board meeting.
Stage 5: Board review and discussion
The Board discussed the key points and conclusions from the review during a Board meeting. The Board conﬁrmed that the
revised questionnaire had worked well, providing good coverage of the key areas of the Board’s responsibilities.
101Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Outcome
The outcome of the review was positive
and concluded that the Board and its
Committees continue to function well,
consider the right issues and work in
atransparent and constructive way.
There continues to be strong alignment
between the Company’s and the Board’s
values and culture. Some of the points
made in the survey included:
• The recent changes to the composition
of the Board had worked well and
had further enhanced the Board.
The new Board members had
quickly settledinto their roles
afteracomprehensive induction.
• Good progress had been made on
further clarifying strategic priorities.
• There was positive sentiment from
the Non-Executive Directors on their
ability to input into Board agendas.
• The Board had taken an extensive
and successful approach in
respect of the engagement with
itskeystakeholders.
• Risks and opportunities continue
to be well understood and were
addressed, including on potential
market changes which mayimpact
the business.
• Each of the Board’s Committees
continues to function well and each
has an effective Committee Chair.
• Two changes made by the Chairman
on Board meeting days were working
well. These were:
− a start of day discussion amongst
the Non-Executive Directors to
consider in advance key areas on
the agenda on which they wished
to focus; and
− an end of day Board ‘wrap-up’
session to reﬂect on the highlights
of the day, possible areas to
explore in more detail at a future
meeting and any points to further
improve future Board meetings.
• Each Board member continues to
provide high-quality contribution
to Board discussions. An open
environment operates where
questions can be raised and
constructive challenges made in the
spirit of continuous improvement.
• Interactions at Board meetings with
senior managers across the business
continue to be very helpful.
• All Board members are well prepared
for Board and Committee meetings,
with high-quality and timely pre-
read papers providing the necessary
information and time to prepare
in advance.
There were no areas rated as ‘poor’
inthe review.
In addition to the Board evaluation
exercise, the Senior Independent
Director (‘SID’) led a review of the
Chairman. This was conducted over
aseries of interviews with each Board
member and the Company Secretary.
Asummary paper was prepared
bytheSID and the outcomes of the
review werediscussed at a meeting
ofthe Non-Executive Directors led by
the SIDwithout the Chairman present.
Thereview conﬁrmed that the
Chairmanremains very effective
andhighly engaged.
Outputs and
recommendations
The Board was pleased with the outcome
of the Board evaluation, which reﬂects
the Directors’ commitment to the
business, strong processes, careful
succession and composition planning,
apositive culture and attitude for the
successful operation of the Board. The
output of the evaluation also conﬁrmed
the Board’s top strategic issues and
these will be incorporated into the
planning schedule for future Board
meetings, which is maintained by
theCompany Secretary.
Some areas for further reﬁnement or
implementation were identiﬁed by the
Board, which include:
• Further articulation on certain
aspects of the Company’s strategy.
The most common themes for our
highest strategic issues were agreed
as part of the evaluation.
• Consideration of whether additional
time is needed for Board discussions
and interaction.
• Some suggestions were made to
further improve the clarity of pre-read
meeting papers.
• An additional review of Committee
terms of reference to review whether
responsibilities can be further clariﬁed.
The Board has asked the Company
Secretary to maintain an action plan
based on the recommendations and
theBoard’s discussions, which will be
progressed and monitored. An update
will be provided in next year’s
AnnualReport.
Good progress was made on the actions
arising from the internal Board
evaluation conducted in the previous
year. This included:
• Additional time has been dedicated
to discussing strategy, particularly
ahead of the annual Board strategy
review meeting which is usually
held each February. More frequent
follow-up discussions had been held
during the year.
• The Board strategy review meeting
included an item speciﬁcally focused
on Softcat’s role in the market and
potential market changes which may
impact Softcat.
• The Board calendar was changed to
move a small number of Committee
meetings to a different day to a Board
meeting, to free up further time for
the Board.
102 Softcat plc Annual Report and Accounts 2024
Governance report continued
Operation of the Board
Softcat capital allocation
framework (‘CAF’)
Introduction and purpose
Softcat has a disciplined approach to the
allocation of capital, which is primarily
aligned to our purpose, vision, strategy
and investment case (see pages 6, 7
and30). Our CAF is used to prioritise
theuse of cash generated by Softcat
while maintaining an appropriate capital
structure for the business. The framework
balances Softcat’s investment requirements
and commitments to regular dividend
payments against the need to maintain
appropriate levels of cash reserves
andthe maintenance of astrong
balancesheet.
The Board believes that adopting this
framework aligns to the Board’s key
objective of enhancing shareholder
value over the long term. The CAF
isreviewed by the Board annually to
ensure it is relevant and aligned to the
business’ size, needs and strategy.
Following review, the Board agreed that
no changes were needed to the CAF.
Summary – investment and
allocation priorities
Softcat’s capital allocation framework
isoutlined below.
Invest for
organic growth
Strategic
investments
Progressive
ordinary dividend
policy
Return excess
cash to
shareholders
Our key priority is to invest for organic
growth, as we believe this is the main
driver of long-term shareholder value,
and our second priority is to maintain
our progressive ordinary dividend
policy. Additional excess capital is then
either allocated to strategic investments
or returned to shareholders.
Invest for organic growth
Our imperative is to prioritise long-term investment for organic growth.
Investing in our people is at the core of our business model. This is our largest
single and most important investment and is the key driver for ongoing growth.
Expanding our headcount and capabilities enables us to fulﬁl our strategy of
acquiring more customers and selling more to existing customers.
We also prioritise investments in systems and processes which support our
existing operations, mitigate risks and underpin business growth.
Progressive ordinary dividend policy
Softcat’s ordinary dividend policy is to distribute between 40% and 50% of
reported proﬁts after tax each ﬁnancial year.
Our dividend and distributions policy is on page 103.
Strategic investments
Inorganic growth, and/or expanding into new areas or markets, is an option.
However, given the size of the organic opportunity available to Softcat, any
acquisition or entry into new areas or markets would need to provide a truly
compelling opportunity to drive long-term shareholder value.
Return excess cash to shareholders
We will return excess cash to shareholders, after taking into account cash reserves
required to operate and grow the business. This has historically been achieved via
a special dividend.
The Board regularly reviews the level of cash reserves which should be retained in
the business to preserve day-to-day operational ﬂexibility. The Board also regularly
reviews the most appropriate method to return excess cash to shareholders.
Softcat has a highly liquid and cash-
generative business model. To date, all
of our growth has been organic, driven
by increasing headcount, growing sales
capabilities and opening new ofﬁces,
and investing in IT systems, enabling us
to successfully grow our customer base
and spend per customer. Given our
relatively modest UK market share and
the size of the future organic opportunity
available to Softcat, the Board will
continue to prioritise investment to
deliver growth within the UK market.
Given the nature of Softcat’s business,
spend on plant, machinery and other
non-systems infrastructure is relatively
low and this is expected to continue
moving forward. The Company’s
working capital is dominated by
short-term trade debtors and creditors,
with very low levels of inventory held.
Timings of trade outﬂows and inﬂows are
typically closely aligned and therefore
there is only a modest need to fund
working capital as the business grows.
The cash ﬂoor of the minimum cash
holding in the business is reviewed
annually to ensure it is appropriate
relative to the size of these balances.
Softcat is debt free with all of our growth
funded from reinvesting the cash we
generate. Whilst our current plans are to
remain debt free, the Board will consider
all options to continue investing in its
strategic priorities, including the most
appropriate source of ﬁnancing.
103Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
We do not envisage that transition to
alower-carbon world will require us to
make major capital allocation changes
(including access to capital or ﬁnancing,
if required). For further information,
please see our Report on Climate
Change and the Climate-related
Financial Disclosures on pages 60 to 82.
Capital allocation governance
The Board is responsible for reviewing
and approving all key decisions in
respect of capital allocation, including
oversight of the CAF. In particular,
theBoard:
• sets Softcat’s dividend and
distributions policy;
• decides on the Company’s capital
and ﬁnancing structure;
• approves a treasury policy for
operation in the business;
• approves all other decisions in
respect of capital allocation;
• will review the capital allocation
priorities and reﬁne them as required
to achieve the Company’s strategy;
• regularly reviews key performance
metrics in the business given
operational and capital
allocations; and
• conducts post-investment reviews
on major project investments so
that future major projects can
beoptimised.
The Board considers capital allocation
inthe context of Company performance,
risks and other relevant business
information. In particular, each year the
Board approves a budget for the coming
ﬁnancial year, which includes capital
allocation and expenditures to drive our
strategic investment priorities. The
Board also annually approves a three-
year plan, which is prepared when the
Board reviews its strategy. The three-
year plan gives a longer-term view of
capital requirements and expenditures
and supports the Board’s decision
making against relevant factors such as
anticipated wider market trends. Capital
allocation decisions and dividend
distributions are also considered against
the Company’s going concern position
and the Company’s longer-term viability.
Dividend and
distributionspolicy
The Board is responsible for:
• setting Softcat’s dividend policy;
• deciding on the Company’s capital
structure; and
• approving any key decisions in
respect of capital allocation.
In respect of dividends, the Board
approves the interim dividend and
recommends the ﬁnal and any special
dividend for shareholders’ approval.
Softcat’s ordinary dividend policy
remains a progressive one which targets
an annual dividend of between 40% and
50% of the Company’s reported proﬁts
after tax in each ﬁnancial year. Subject to
any cash requirements for ongoing
investment, the Board will consider
returning excess cash to shareholders
over time. In determining the level of
dividend in any year in accordance with
the policy, the Board also considers a
number of other factors that inﬂuence
the proposed dividend, which include
but are not limited to:
• the level of available distributable
reserves in the Company;
• future cash commitments and
investment needed to sustain the
long-term growth prospects of the
business; and
• potential strategic opportunities.
Softcat’s constitution does not limit or
oblige the Company to any minimum or
maximum dividend payments. However,
no dividend may exceed the amount
recommended by the Directors and all
dividends shall be paid in accordance
with any relevant legislation.
The Audit Committee on behalf of the
Board reviews management’s conﬁrmation
that the Company has sufﬁcient
distributable reserves before a dividend
payment is made or proposed to
shareholders. The Board then considers
the Audit Committee’s review as part of
its process to approve or recommend
dividends. Consideration is also made
ofthe balance on the Company’s
retained earnings reserve, which as
at31July 2024 amounted to £290.5m
(asdisclosed inthe Company statement
of ﬁnancial position).
In addition to the reviews of distributable
reserves prior to a dividend being paid
or proposed, the Board regularly reviews
the performance of the business,
particularly in respect of cash ﬂow
andreceivables. Each year, the Board
reviews and approves a target minimum
of cash to be held in the business and in
2023 the Board agreed atarget minimum
cash holding of £75m. The minimum
cash holding represents a desired
forecast minimum cash balance held in
Company funds across all accounts. The
Board has reviewed the matter this year
and has agreed to maintain the target
minimum cash holding at £75m.
The Directors have proposed a ﬁnal
dividend and a special dividend for the
ﬁnancial year ended 31 July 2024. The
special dividend takes into account the
minimum cash holding in the business.
Further information in respect of the
proposed dividends can be found on
page 151.
Softcat is well positioned to continue to
fund its dividend which is well covered
by the cash generated by the business.
Details of the Company’s viability and
going concern can be found on page
89and page 166 respectively. Details
oftotal dividend distributions for the
ﬁnancial year can be found in note 6
tothe ﬁnancial statements.
The Company intends to seek
shareholders’ approval at the 2024
AGMto permit the Directors, should
they consider exercising the authority,
torepurchase up to 10% of the ordinary
issued share capital. The Directors have
no current intention of exercising this
authority, which is sought in the best
interest of shareholders to allow the
ﬂexibility to react promptly where such
market purchases may be desirable.
104 Softcat plc Annual Report and Accounts 2024
Governance report continued
Board development
andsupport
The Chairman is responsible, with the
assistance of the Company Secretary, for
ensuring that all Non-Executive Directors
receive ongoing training and development.
All Directors are provided with frequent
brieﬁngs of current and relevant issues
and a twelve-month forward plan is
maintained by the Company Secretary
toensure that emerging topics or repeat
topics which require further debate by
the Board can be effectively scheduled.
Topics discussed during the year included
updates on industry trends and competitor
performance, corporate governance
andaudit reforms, and developments in
sustainability and environmental reporting.
The Board also receives updates on our
public reporting commitments, such as
gender pay gap reporting (and ethnic pay
gap reporting, on which Softcat reports
voluntarily), tax strategy, creditor payment
practices and risks of modern slavery.
When a new Director has been appointed,
it is important to accelerate their
understanding of the business so the
Director can maximise their contribution
tothe Board and fulﬁl their responsibilities
and duties successfully and effectively.
An extensive and tailored induction
programme was completed for
MayankPrakash and Jacqui Ferguson
who joined the Board in September
2023 and January 2024 respectively.
Theprogramme included meetings with
the Chairman, the CEO, the CFO, members
of the Senior Leadership Team, other
keymanagement and the Company’s
brokers. A brieﬁng was also provided by
the Remuneration Committee’s external
adviser, who provided a historical
overview and context in respect of
executive remuneration in the Company.
The Company Secretary also highlighted
keyBoard documents for Mayank and
Jacqui to review, such as the Board’s
annual budget, Board strategy review
and three-year plan. This helped to
accelerate their understanding of key
recent decisions and approvals.
All Directors have the opportunity
toobtain advice from the Company
Secretary (who acts as Secretary to
theBoard and all its Committees).
TheCompany Secretary is appropriately
qualiﬁed and highly experienced and
isresponsible for advising the Board
oncertain regulatory, legislative and
governance matters and other ad hoc
issues when required. Each Board
meeting includes an update from the
Company Secretary on any major
developments of which the Board
should be aware. The role of the
Company Secretary also includes:
• advising the Board of its key
obligations as Directors of a public
listed company;
• assisting the Chairman by organising
induction and training programmes
and ensuring that all Directors
havefull and timely access to all
relevant information;
• developing the agenda for each
meeting of the Board and its
Committees. The Company Secretary
shares draft Board agendas with
the Directors for further comments
and input. Final versions of the
agenda are then approved by the
respective Chair;
• working with the Directors to
developthe long-term agenda
for the Board and its Committees
to enable them to discharge their
responsibilities effectively;
• supporting and brieﬁng the Chairman
on his governance engagement
programme with the Company’s
largest shareholders;
• advising the Board on the resolutions
to propose to shareholders at each
Annual General Meeting; and
• ensuring that the correct Board
procedures are followed, in
accordance with the Company’s
constitution, applicable legislation
and good governance practice.
The removal of the Company Secretary
is a matter for the Board as a whole.
Role of the
Non-ExecutiveDirectors
All of Softcat’s Non-Executive Directors,
including the Chairman and SID, are
required by their role to perform certain
functions to improve the effectiveness of
the Board. The roles of the Non-Executive
Directors are reviewed regularly and
summarised in a written document
which is approved by the Board and
available for inspection on the Group’s
website at www.softcat.com/about-us/
investor-centre/governance. The document
is reviewed by the Board with the support
of the Company Secretary to ensure it
remains relevant and reﬂects any changes
in governance or good practice. The role
of the Non-Executive Directors includes:
• constructively challenging and
contributing to the development
of strategy;
• offering additional perspectives,
advice and strategic guidance;
• scrutinising the performance of
management in meeting agreed
goals and objectives;
• exercising oversight to ensure
compliance with key listed
companyrequirements;
• through the Audit Committee,
satisfying themselves that ﬁnancial
information is accurate and that
internal controls and systems of
riskmanagement are robust;
• through the Remuneration
Committee, taking responsibility for
determining appropriate levels of
remuneration for senior Executives;
• through the Nomination Committee,
undertaking the role of recommending
the appointment and, where necessary,
the removal of positions on the
Board. Consideration is also given
to diversity, succession planning,
employee engagement (led by the
Designated Director) and culture
within the business; and
• through the Sustainability Committee,
scrutinising management’s activities
and policies for pursuing Softcat’s
sustainability strategy and achieving
its climate-related targets.
105Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Organisation of
Boardmeetings
The following are key features of how
our Board and Committee meetings
areorganised to support the good
governance of the business:
• Draft agendas for Board meetings are
circulated to the Directors in advance.
This provides an opportunity to
comment on the proposed agenda
items or to propose further new items.
• Board meetings are scheduled to
consider issues requiring Board
oversight and adequate time for
discussion of each agenda item is
provided. Agendas are set to provide
the Directors with opportunities to
discuss the longer-term outlook of
the business. Additional meetings
arearranged when the need arises;
• each Board meeting includes a report
from the CEO and the CFO. The
reports provide a comprehensive
overview of key matters on which the
Board needs to be informed and they
provide a good foundation for many
of the other topics discussed at Board
and Committees meetings. Topics
included in the CEO and CFO reports
include operational and ﬁnancial
performance, industry developments,
employee matters and current
priorities for the CEO and CFO;
• an annual calendar of scheduled
Board and Committee meetings
is structured to allow the Board/
Committees to review cyclical and
adhoc items, such as key projects;
• the Directors have access to key
governance documents, such as the
matters reserved to the Board, terms
of reference for each Committee, and
the delegated authorities matrix;
• Non-Executive Board members
make themselves available outside of
scheduled meetings should the need
occur. In particular, the Chairs of the
standing Committees often hold
preliminary planning discussions with
the Company Secretary, management
or external advisers to a Committee
prior to a meeting;
• reporting packs are provided for each
Board/Committee meeting, which
are designed to be clear, analytical
and concise. Papers are distributed
and retained in an electronic system
which is managed by the Company
Secretary and this provides Directors
with instant access to current and
previous papers at any time;
• reporting packs are normally prepared
and presented by the Executive
Directors and other senior managers.
Packs are distributed by the Company
Secretary to the Board typically ﬁve
to seven days in advance of Board or
Committee meetings. This enables
the reporting packs to be as up to
date as possible whilst allowing
sufﬁcient time for their review in
advance of the meeting. Verbal
updates cover any subsequent
material developments;
• a summary of the actions arising
atBoard and Committee meetings
is circulated by the Company
Secretary following each meeting.
The Company Secretary then ensures
progress is made in respect of each
action and updates the Board on the
outcomes of each action;
• ﬁnancial updates with commentary are
distributed to the Board regularly. This
gives the Directors the opportunity to
review performance and any emerging
issues in ‘real time’. The ﬁnancial
updates include an assessment of
performance against the annual
budget as approved by the Board,
giving the Board additional analysis
on developing Group trends;
• the development of strategy is led by
the Executives with input, challenge,
examination and ongoing testing
from the Non-Executive Directors.
A dedicated Board strategy review
session is held annually for which the
Non-Executive Directors discuss with
the Executive Directors the expected
major discussion topics. After the
annual dedicated session, the CEO
provides regular follow-on updates
throughout the year;
• additional time is allocated on
occasion to facilitate more in depth
discussion when appropriate. For
example, Board dinners have been
held to provide a more informal
setting for the Board to meet and
todiscuss business;
• a session is held with the
Non-Executive Directors ahead
ofthestart of each Board meeting
toallow them additional time to
discuss their key areas of interest
forthe Board meeting;
• a ‘wrap-up’ session is held at the
conclusion of the day to reﬂect on
themeeting’s highlights and issues
which may need to be discussed
at future meetings and to provide
instant feedback on the day; and
• Board discussions are held in an
open and collaborative atmosphere
of mutual respect allowing for
questions, scrutiny and constructive
challenge. This supports decisions on
which the Board seeks a consensus.
Independence and conﬂicts
The Board, excluding the Chairman, is
currently comprised of ﬁve independent
Non-Executive Directors and two
Executive Directors and therefore complies
with the independence requirements of
the Code. Graeme Watt was formerly the
Chief Executive Ofﬁcer before being
appointed as Chairman on1 August 2023.
The Board considers for the purposes of
the Code that he wasnot independent
when he was appointed Chairman and
that he remainsnot independent.
The independence of the Non-Executive
Directors is reviewed annually by the
Nomination Committee (described in
the Nomination Committee Report on
pages 117 to 122). Their independence
could be impinged where a Director
hasa conﬂict of interest and the Board
therefore operates procedures to identify
and manage situations where such a
conﬂict could arise. Board procedures
operate to restrict a Director from voting
on any matter in which they have a
material personal interest, unless the
Board unanimously decides otherwise.
Ifnecessary, Directors are required
toabsent themselves from a meeting
oftheBoard while such matters are
being discussed.
During the year, all Directors conﬁrmed
that they are able to allocate sufﬁcient
time to discharge their responsibilities
effectively and all Directors continue to
devote adequate time to their duties at
Softcat. Directors are also required to
notify the Board of any major changes
totheir external commitments that arise
during the year with an indication of the
time commitment involved.
106 Softcat plc Annual Report and Accounts 2024
Relations with shareholders
Governance report continued
Governance engagements
The Board maintains a proactive and
constructive programme of engagement
with its stakeholders and recognises
within this the important and valuable
role that shareholders play, as owners of
the Company. Further information on the
Board’s engagement with its stakeholders
is provided on pages 42 to 49.
An important part of the Chairman’s role
is to maintain regular engagement with
our major shareholders, in order to
understand their views on governance
and on our Executive Directors. During
the year, the Chairman undertook an
extensive engagement programme with
the Company’s largest shareholders on
governance matters. This was particularly
valuable during the ﬁrst year in role for
the Chairman. Feedback from these
sessions was reported back to the Board
to make sure the Board fully understood
the views of those shareholders and the
Board discussed whether any actions
should be taken as a result.
As part of an ongoing investor relations
programme, there was extensive
interaction with institutional shareholders
and market analysts across the year. The
Chief Financial Ofﬁcer provides the Board
with brieﬁngs and reports on these
interactions and on any material changes
in the shareholder base of the Company.
The Chairs of each of the Committees
welcome the views and questions of
shareholders at any time. Each of the
Committee Chairs can be contacted
viathe Company Secretary at
cosec@softcat.com.
In the event that shareholders have any
concerns, which the normal channels of
communication to the Chairman or Chief
Executive have failed to resolve or for
which such contact is inappropriate,
ourSenior Independent Director or any
independent Non-Executive Director
isavailable (via cosec@softcat.com) to
address such issues. The Board continues
to make itself available, when requested,
for meetings with shareholders on issues
relating to the Company’s governance
and strategy.
Annual General Meeting
The 2024 AGM will be held on
9December 2024 at Softcat plc,
Fieldhouse Lane, Marlow SL7 1LW.
Details of the meeting and the resolutions
to be proposed are set out in the
Noticeof AGM which is available
todownload on our website
(www.softcat.com/about-us/investor-
centre/shareholder-information).
The AGM gives shareholders an
opportunity to vote on key aspects of
Softcat’s business and to ask questions
to the Directors. The opportunity to
submit questions for the Directors via
email will be given again for the 2024
AGM. Details of how to do this can be
found in the Notice of AGM.
Shareholder meetings
Throughout the year, numerous
meetings were held with existing and
potential shareholders. These meetings
were attended by either the Chief
Executive or the Chief Financial Ofﬁcer
or sometimes both. The meetings
focused primarily on trading performance
and the implementation of our business
strategy. Any signiﬁcant views expressed
by shareholders are recorded and
reported to the Board to keep them up
to date with investor sentiment. In line
with the Market Abuse Regulation, strict
protocols are observed to make sure that
no unpublished price sensitive information
is discussed during these meetings.
A dedicated Head of Investor Relations
has recently joined the business to
further improve interactions with
shareholders, market analysts and
corporate communications.
Results presentation
andinvestor roadshows
The Chief Executive and the Chief
Financial Ofﬁcer provide a brieﬁng later
in the day after the release of the full-year
preliminary results and also of the
half-year results. The brieﬁng is primarily
aimed at institutional shareholders and
market analysts but all stakeholders,
including employees, and all shareholders
are welcome to access the brieﬁng.
Anysupporting material for the brieﬁng
is published on Softcat’s website and
isaccessible to all stakeholders and
thepublic.
Following the release of our full-year
preliminary results announcement and
our half-year results, the Chief Executive
and Chief Financial Ofﬁcer undertake
extensive investor engagement roadshows
(which may be held in person or held
virtually). Feedback from the roadshows
and from reports by analysts, by industry
experts and in the media are collated
and shared with the Board to improve
the Board’s understanding of their views.
This process will be supported by the
Head of Investor Relations.
107Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Accountability
Audit Committee report
Allocation of time
Internal audit: 20%
External audit: 30%
Financial reporting: 25%
Risk and internal controls: 25%
We plan to make
signiﬁcant progress
onProvision 29
compliance in the
yearahead.
Robyn Perriss
Chair of the Audit Committee
Introduction
As Chair of the Audit Committee (the
‘Committee’), I am pleased to present
the Committee’s report for the year
ended 31 July 2024. Members of the
Committee are shown in the Board
biographies on pages 94 and 95.
Attendance at Committee meetings
during the year is shown on page 96.
In this report we explain how the
Committee has discharged its
responsibilities during the year,
considering important matters in
respect of external ﬁnancial reporting,
the Group’s control environment and
therelationship with Softcat’s external
auditor. Key areas of focus for the next
ﬁnancial year are also explained. The
Committee has further responsibilities,
on behalf of the Board, for oversight
oftheeffectiveness of the risk
management framework, which is
explained in the risk management
section on pages 83 to 88.
The Committee’s agenda remains
substantial, reinforcing the validity of a
decision made last year to increase the
number of scheduled annual meetings
to ﬁve. This cadence of meetings
remains important as the Committee
continues to fulﬁl a vital role in the
Group’s governance framework,
providing valuable independent
challenge and oversight.
As explained elsewhere in this Annual
Report, Softcat continues its focus on
growth and on utilising modern data and
digital technologies and the Committee
will continue to play an important role
monitoring the effectiveness of the control
environment as Softcat makes progress
on its objectives.
I have maintained a regular dialogue
with Katy Mecklenburgh in her ﬁrst year
as CFO, together with other members
ofher team responsible for ﬁnancial
reporting, risks and controls. This
hashelped to ensure I have a good
understanding of issues and plans
fromthe perspective of management.
Ithas also helped to ensure that the
Committee continues to receive
high-quality and relevant information to
enable it to oversee, challenge and
makeinformed decisions.
During the year, the Financial Reporting
Council (‘FRC’) published the 2024 UK
Corporate Governance Code, which
included recommendations under
Provision 29 inrespect of effectiveness
of internal controls. Ahead of
announcement of therevised Code, the
business had already been focused on
building a more formal ‘second line of
defence’ function and a detailed
programme to mature itscontrol
environment. This process isnow well
established and is led by an experienced
Head of Risk, Assurance & Process
Improvement, with executive sponsorship.
Whilst we still have work to do in this
important area, I am conﬁdent that we
have the right experience, attitude and
resources and we plan to make
signiﬁcant progress on Provision 29
compliance in the year ahead.
The Committee received comprehensive
updates from management on ﬁnancial
reporting and controls and areas of
judgement well ahead of the publication
date of the year-end results. Our external
auditor also provided informal views on
these areas to ensure the business was
well prepared ahead of ﬁnalising the
results. This was particularly important
this year given that we are reporting for
the ﬁrst time as a Group. The Committee
considered a detailed paper from
management and was satisﬁed with
therecommended approach to Group
reporting. Further information on this
isprovided on pages 111 and 112.
108 Softcat plc Annual Report and Accounts 2024
Audit Committee report continued
Introduction continued
The Committee has carried out a review
of the independence and effectiveness of
EY as external auditor. It also considered
the role of our outsourced internal audit
provider, Grant Thornton, in light of the
growth in our own in-house team and
capabilities over the last year. Both
continue to be effective and further
information on the reviews conducted
and future plans for our internal audit
function are provided in this report on
pages 114 to 116.
With the assistance of management,
theCommittee has reviewed the content
in the Annual Report and Accounts and
believes that this explains our strategic
objectives and is fair, balanced
andunderstandable.
Whilst this report of the Committee
contains some of the matters addressed
during the year, it should be read in
conjunction with the Independent
Auditor’s Report starting on page 154 and
indeed the Softcat plc ﬁnancial statements
in general. Each year the Committee’s
programme of work covers a range of
items that are of particular signiﬁcance to
the Group’s ﬁnancial statements or where
it is necessary to exercise a high degree
of judgement. Supported by management,
the Committee reviewed the signiﬁcant
accounting issues, judgements and areas
of estimation uncertainty relating to
FY2024. Details of these and why they
were considered important are set out
onpage 112, while further information on
items that were identiﬁed as key audit
matters is located in the Independent
Auditor’s Report from page 154.
We welcomed two new members to
theCommittee during the ﬁnancial year,
Mayank Prakash and Jacqui Ferguson.
Both Mayank and Jacqui received
comprehensive updates on the work
andresponsibilities of the Committee
aspart of their overall induction and the
Committee is already beneﬁting from
their substantial contributions.
Areas of focus in FY2024 included:
• reviewing the appropriateness of our published half-year and full-year results,
including preparations for Group reporting for the ﬁrst time;
• assessing the Group’s going concern and viability statements;
• conﬁrming that the Annual Report and Accounts is fair, balanced and understandable;
• commissioning, receiving and discussing internal audit reports on:
− the design adequacy and operating effectiveness of the Group’s process
foremployee joiners, movers and leavers;
− reviewing the key control framework over the order to cash process; and
− the design and operating effectiveness of controls in respect of certain sales
processes and associated international sales compliance processes, given
ourgrowing multi-national business;
• through regular Board updates, reviewing our cyber security arrangements;
• reviewing the effectiveness of internal audit and internal controls, discussing
theGroup’s risk appetite, principal risks and risk management and reviewing
theGroup’s risk register;
• reviewing management’s progress on further formalising and embedding certain
ITgeneral controls and ﬁnancial controls and the extent to which the external auditor
may place reliance on those controls; and
• assessing developments in market reforms and practice, including the revisions
inthe 2024 UK Corporate Governance Code, which also now effectively
incorporate theFRC’s minimum audit standard for FTSE 350 companies.
Focus areas for FY2025:
• management continues to focus efforts on formalising the overall control
environment in the business. The Committee will retain its oversight in respect
ofthe effectiveness ofthese efforts;
• we shall further consider the revised Provision 29 on internal controls in the 2024 UK
Corporate Governance Code. Although this will not apply until FY2027, advance
preparatory arrangements will be progressed and assessed over the coming year.
The Committee will retain its oversight in respect of the effectiveness of these efforts;
• given ongoing investment in IT systems and our data capability as set out in
theCEO’s Review on pages 16 to 19, the governance and oversight in respect of
theseprogrammes;
• we are awaiting published guidance in respect of the new corporate offence of a
failure to prevent fraud. Management already operates a mature anti-fraud process;
however, it has commenced work on considering additional steps, controls and
potential risk areas which may need to be addressed. The Committee will regularly
review with management progress made in this regard; and
• consider emerging risks as appropriate in respect of potential market disruptors
and in respect of the ongoing expansion of certain technologies (forexample AI).
109Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
I would also like to thank the management
team for its substantial achievements
during the year in maturing the overall
control environment and for its ongoing
focus on risk management. Finally, as noted
elsewhere in this Annual Report, Vin Murria
retires as a Non-Executive Director in
December 2024. Vin is the longest
standing member of the Committee,
providing an invaluable mixture of fresh
perspectives and extensive experience
going back to Softcat’s initial listing on
theLondon StockExchange in 2015. On
behalf of theCommittee, I thank Vin for
allher help and support. Following these
changes in composition, the Committee
retains all the required range of skills and
experience (including ﬁnancial expertise
and relevant sector knowledge) to operate
fully and effectively and its composition
remains infull compliance with the UK
Corporate Governance Code.
As previously, I shall engage with our
largest shareholders, asking if they would
like to raise any matters with me in respect
of the work of the Committee and our key
focus areas for the coming ﬁnancial year.
If any shareholder would like to contact
me in respect of these matters, I can be
contacted via the Company Secretary at
cosec@softcat.com. I will also be happy
toanswer any questions about the work
of the Committee at the forthcoming AGM.
Robyn Perriss
Chair of the Audit Committee
23 October 2024
Responsibilities
The Committee’s terms of reference are
available at www.softcat.com/about-us/
investor-centre/governance and in hard
copy from the Company Secretary.
These provide the framework for the
Committee’s work and can be
summarised as providing oversight of:
• the appropriateness of the Group’s
external ﬁnancial reporting;
• the relationship with, and
performance of, the external auditor;
• the Group’s system of internal control,
including the risk management
framework, key and emerging risks and
the work of the internal audit function;
• appropriate controls to detect and
prevent fraud; and
• the Group’s system of
complianceactivities.
The terms of reference are reviewed
atleast annually and are updated as
appropriate to ensure there is clarity on
the expected duties of the Committee.
Following a review during FY2024, the
Committee concluded that no material
changes to the terms of reference were
required. Minor amendments were
approved to:
• fully align the terms of reference with
Provision 29 (in respect of internal
controls) of the 2024 UK Corporate
Governance Code;
• reﬂect the introduction of the new
corporate offence of a failure to
prevent fraud; and
• formally consider compliance with
the FRC’s minimum standard for
auditcommittees.
During the year the Committee was
updated in respect of all relevant statutory
and non-statutory reform proposals so it
can assess these in respect of its current
and future responsibilities.
A whistleblowing policy and procedure
for colleagues to raise issues regarding
possible improprieties in matters of
ﬁnancial reporting or other matters is in
place and operated throughout the year.
The Group operates anti-bribery and
corruption procedures and a formal
policy which supports compliance with
the Bribery Act 2010, the Criminal
Finances Act 2017 and certain equivalent
legislation outside of the UK. Employees
undertake regular training to ensure
compliance and a copy of the policy is
made available to all employees. Our
anti-bribery and corruption procedures
and policy also includes a gifts and
hospitality register. All gifts and
hospitality (either given or received)
above applicable thresholds must be
approved by the employee’s line manager
in line with the policy and entered on the
register. Management (through its Risk
Oversight and Compliance Committee)
monitors use of the gifts and hospitality
register. The Committee provides
oversight to ensure that management
conﬁrms appropriate policies and
procedures are in place.
During the year the Committee reviewed
the Company’s published tax strategy
and also discussed with management
tax compliance and relationships with
relevant tax authorities. These form part
of a broader annual update to the
Committee from the Tax Manager. An
updated tax strategy was approved by
the Committee and this is available on
the Group’s website at www.softcat.com/
corporate-responsibility. The Committee
also noted the Company’s reporting in
respect of payment practices to suppliers.
The Committee received updates from
management on fraud resilience in the
business, reviewed actions taken during
FY2024 on the fraud control framework
and discussed details of attempted
frauds together with route cause analysis
and steps to strengthen anti-fraud
measures. Fraud awareness remains
heightened across the business with
regular employee training ongoing.
110 Softcat plc Annual Report and Accounts 2024
Audit Committee report continued
Responsibilities continued
In respect of the new corporate offence of
a failure to prevent fraud, a comprehensive
brieﬁng was received by the Committee
and a discovery phase workshop was held
by management to assess the maturity of
our current anti-fraud posture. This will
help to shape the next actions to comply
with the new statutory requirements.
Detailed guidance from the Government
on good practice to comply with the new
law is awaited and management will
thendiscuss with the Committee its
proposed approach to observe and
communicate these.
The Committee recognises effective
fraud controls is an important area,
especially given the evolving nature and
increasing sophistication of fraud and
the expanded responsibilities of the new
corporate offence of a failure to prevent
fraud. This will continue to be a key
responsibility of the Committee as part
of the safeguarding of the Group’s assets
and reputation.
Membership
All Committee members are independent
Non-Executive Directors of the Company.
The Company Secretary acts as Secretary
to the Committee, supported by the
Company Secretarial Assistant.
The membership of the Committee has
been selected with the aim of providing
the range of ﬁnancial and commercial
expertise necessary to meet its
responsibilities and the requirements
ofthe UK Corporate Governance Code
(the ‘Code’). The Committee’s composition
remains effective. Given my experience
as a qualiﬁed Chartered Accountant and
as a recent ﬁnance director of a listed UK
company, I have been designated as the
ﬁnancial expert on the Committee for
the purposes of the Code. In order to
ensure that the Committee continues
tohave experience and knowledge
relevant to the sector in which Softcat
operates, all of the Non-Executive
Directors receive regular updates on
business, regulatory, ﬁnancial reporting,
governance and accounting matters.
Jacqui Ferguson and Vin Murria both
have considerable sector experience,
inaccordance with the provisions of the
Code. Mayank Prakash has signiﬁcant
experience in technology and digital
information, which is important given a
growing importance of the Committee’s
oversight of IT general controls and our
ongoing investment in IT systems.
How the Committee operates
TheCommittee met formally ﬁve times
during FY2024 and each meeting had full
attendance. Meetings of the Committee
generally take place on the same day
asthe Board meeting to maximise the
efﬁciency of interaction with the Board.
The Company Secretary maintains a
twelve-month rolling plan to support
aneffective process which ensures the
Committee reviews all required matters
toeffectively discharge its duties. Draft
agendas are discussed with both the Chair
of the Committee and the Chief Financial
Ofﬁcer (‘CFO’) well in advance of the
meeting to ensure they are comprehensive
and that sufﬁcient time is allocated. Further
input on agenda items is also obtained
from the external auditor and internal
auditfunction.
The external auditor, EY, is invited
toeach meeting together with the
Company Chairman, the Chief Executive
(‘CEO’) and the CFO. This means that
each member of the Board is present at
Committee meetings. However, I shall,
as needed, report to the Board as a
separate agenda item on the activity of
the Committee and matters of particular
relevance to the Board regarding the
conduct of the Committee’s work.
The Board as a whole regularly reviews the
performance of the business via monthly
reporting packs and a CFO’s report at each
Board meeting. The CEO provides at each
Board meeting a comprehensive update
on any major business development.
These updates provide the Committee
with a good ongoing understanding of the
ﬁnancial standing of the business which
accumulates towards the formal half-year
and full-year results and on any emerging
risks or issues within its remit which may
need to be discussed by the Committee.
The Company Secretary, the Group
Financial Controller and the Head of
Risk, Assurance & Process Improvement
also attend Committee meetings.
Duringthe year Grant Thornton provided
an outsourced internal audit service
toSoftcat and it attended meetings to
present the proposed internal audit plan
and updates to the plan and to report on
the ﬁndings of internal audits undertaken.
The Committee sets time aside at the
endof each meeting to seek the views
ofthe external auditor, in the absence
ofmanagement. Committee meetings
also allow for a similar ‘in camera session’
with management, in the absence of the
external auditor. The external auditor
andmanagement conﬁrm for each
meeting whether there is a need to hold
asession at the end of the meeting.
These arrangements assist the Committee
in the discharge of its duties in respect
ofthe minimum standard for FTSE 350
audit committees published by the FRC.
The Committee Chair meets separately
with the internal audit function as needed
between Committee meetings.
The Chair also keeps in regular
touchwith the CFO, other members
ofthe management team and the
external auditor.
111Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Financial reporting
The Committee’s primary responsibility in
relation to the Group’s ﬁnancial reporting
is to review with both management and
the external auditor theappropriateness
of the half-year and annual ﬁnancial
statements concentrating on, amongst
other matters:
• the quality and acceptability of
accounting policies and practices;
• the impact of any material changes
inaccounting policies;
• material areas in which signiﬁcant
judgements have been applied or
where signiﬁcant issues have been
discussed with the external auditor;
• the clarity of the disclosures and
compliance with ﬁnancial reporting
standards and relevant ﬁnancial and
governance reporting requirements,
including the Code;
• any correspondence from regulators in
relation to our ﬁnancial reporting; and
• assisting the Board in an assessment
of whether the Annual Report and
Accounts, taken as a whole, is fair,
balanced and understandable and
provides the information necessary
for shareholders to assess the
Group’s position and prospects,
performance, business model and
strategy. This assessment forms the
basis of the advice given to the Board
to assist it in making the statement
required by the Code.
Accounting policies
andpractices
The Committee received reports
frommanagement in relation to the
identiﬁcation of critical accounting
judgements, key sources of estimation
uncertainty, signiﬁcant accounting
policies and proposed disclosure of
these in the 2024 Annual Report.
Given the ongoing strategic internal
investment in technology (as explained
elsewhere in this Annual Report),
management undertook a detailed
review of the accounting for IT
development investment, in particular on
the appropriate capitalisation of costs to
be recognised under IAS 38. The results
of the analysis were discussed with the
Committee and the Committee also
received a review from the external
auditor. The Committee endorsed the
approach taken by management.
Following the commencement of
tradethrough our US wholly-owned
subsidiary during the year, the
Committee received reports from
management on a proposed approach
toadopting Group reporting. In respect
of the Company ﬁnancial statements,
management outlined the alternative
reporting formats to the Committee and
recommended the adoption of FRS 101.
The Committee discussed the alternatives
with management and endorsed its
recommendation. The Committee noted
that management had discussed with
EYon the recommended approach.
Critical accounting judgements
andsigniﬁcant accounting policies
anddisclosures are set out in note 1
‘Accounting policies’ to the
ﬁnancialstatements.
Signiﬁcant judgements
and areas of focus
An important part of the Committee’s
responsibilities is to assess key issues
inrespect of published ﬁnancial
statements and the Committee pays
particular attention to any matters which
itconsiders may affect the integrity of
Softcat’s ﬁnancial statements, with a view
to satisfying itself that each matter has
been treated appropriately. Management
is required to present fordiscussion with
the Committee itsapproach and rationale
on each signiﬁcant judgement and issue.
Management’s presentation is an
integralpart of the year-end process
andmanagement provides interim
updates during the year (particularly
atthe half-year stage) to ensure the
Committee is fully apprised of emerging
new issues on a timely basis and has
theopportunity to ensure these are
fullyscrutinised.
The signiﬁcant areas of focus considered,
and the actions taken by the Committee,
in relation to the 2024 Annual Report
areoutlined below. Given the relative
simplicity of our business, there are
fewareas of signiﬁcant judgement and
accordingly there were no areas of
material challenge identiﬁed by
theexternal auditor. However, the
Committee is entirely satisﬁed that the
external auditor conducted a thorough
and comprehensive review of the
material areas which may impact the
integrity of the ﬁnancial statements.
The membership of the Committee has been
selected with the aim of providing the range
ofﬁnancial and commercial expertise necessary
to meet its responsibilities.
Robyn Perriss
Chair of the Audit Committee
112 Softcat plc Annual Report and Accounts 2024
Audit Committee report continued
Signiﬁcant judgements and areas of focus continued
We discussed these with the external auditor during the year and, where appropriate, these have been addressed as areas
ofaudit focus as outlined in the Independent Auditor’s Report on pages 154 to 161.
Matter considered Action
Going concern and viability In respect of the ﬁnancial statements for the year ended 31 July 2024, management prepared
analysis modelling a variety of downside scenarios having regard to the principal risks faced by
the business to assess the Group’s viability and ability to continue as a going concern. The
analysis, including budgets for FY2025 and three-year cash projections, was presented
together with potential mitigating actions which could be taken in the event of one or more of
the downside scenarios occurring. The Committee noted that management had further reﬁned
the approach to various scenarios, including preparing a more comprehensive set of ‘reverse
stress test’ scenarios to more thoroughly assess the potential conditions which could, if they
occurred, materially threaten the viability of the business.
The Committee was satisﬁed with management’s work and it supported the conclusions
reached in respect of the Group’s going concern and longer-term viability (see page 166 and
page 89 respectively).
Revenue recognition
and cut-off
The Committee has reviewed the Group’s revenue recognition policy and discussed in detail
with management the processes applied to accurately record revenue at period ends. The
Committee discussed the further improvements in the period-end process as a result of
additional functionality in the ﬁnance ERP system, noting that some of the calculations were
now automated, improving the robustness of the process.
The Committee also receives detailed monthly reporting on business performance which
includes revenue recognition data. The Committee or the Board discusses the performance
and data trends as needed with the CFO.
The Committee has concluded that the timing of revenue recognition is appropriate.
Presentation of revenue
inrespect of principal
versusagent
The Committee is aware that inappropriate application of IFRS 15 may result in inaccurate
presentation and disclosure of revenue and cost of sales.
The publication of guidance on ‘control’ published by the IFRS Interpretations Committee (‘IC’),
which is used to determine whether companies should recognise revenue from the resale of
standard software licences on a net basis under IFRS 15 has removed a signiﬁcant element of
judgement in relation to the recognition of software revenue. However, the nature of Softcat’s
current systems is to process all revenue streams gross, and a manual adjustment is made by
management at year end to record revenue on a net basis where Softcat is the agent in the
arrangement. Hence, due to the large number of transactions and manual nature of the net
down adjustment, this remains an area of key audit focus.
Management conﬁrmed to the Committee that it has followed the relevant IC guidance and
hastaken appropriate action and performed detailed work to ensure that revenue is reported
accurately on a principal (gross) or agent (net) basis.
EY has audited the manual net down adjustment and related disclosures under IFRS 15 and
presented the results of its procedures to the Committee. The above provided the Committee
with comfort that an appropriate approach continues to be taken on the presentation of
revenue under IFRS 15, which also incorporates the guidance from the IC.
Misstatement of rebate income The Committee has taken steps to understand the nature and quantum of supplier rebates
received by the Group and to understand the steps taken by management to improve the
modelling of accrued rebate income. Management presented current year levels of rebate
income plus recent historical trends and factors to allow the Committee to analyse rebate
income in context. The Committee noted further enhancements to the model used by
management to calculate the accrued income balance and the further formalisation of
associated controls. The Committee also receives via regular Board updates from management
information on rebates.
The Committee is satisﬁed with management’s ability to accurately record rebates earned
within the ﬁnancial period.
Capitalisation of
ITinvestmentcosts
Please see the above section ‘Accounting policies and practices’.
Implementation
ofGroupaccounting
Please see the above section ‘Accounting policies and practices’.
113Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Other matters
The Committee also undertook a range
of further activities in relation to the
Group’s accounting and external
reporting, governance and controls
inthe year:
Fair, balanced and understandable
The processes and controls that underpin
the Committee’s assessment of whether
the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable
and provides the information necessary
forshareholders to assess the Group’s
position and prospects, performance,
business model and strategy include
ensuring that:
• all team members who provide a
material contribution to drafting
the Annual Report and Accounts
are fully briefed by the Company
Secretary on the fair, balanced and
understandable requirement;
• an experienced core team is
responsible for the co-ordination
ofcontent submissions, veriﬁcation,
detailed review and challenge;
• The Committee also receives a
detailed quality of earnings analysis
highlighting any larger accounting
adjustments identiﬁed during the
year and providing consistent year-
on-year trend analysis against which
to assess the narrative reporting;
• the Annual Report and Accounts
follows a framework which supports
the inclusion of key messaging,
market and performance
overviews, principal risks and other
governance disclosures. Sufﬁcient
forward-looking information is
provided and a balance is sought
between describing potential
challenges andopportunities;
• information in the different parts
ofthe Annual Report and Accounts
isconsistent;
• the Annual Report and Accounts
is written to avoid jargon where
possible and is presented free
ofunnecessary clutter;
• senior management conﬁrms that
the content in respect of its areas
ofresponsibility is considered to be
fair, balanced and understandable;
• the Committee receives an early
draft of the Annual Report and
Accounts to enable timely review
andcomment; and
• the Committee receives a brieﬁng
from management which sets out
the key themes and links in the
Annual Report and Accounts which
contribute to it being a fair, balanced
and understandable document.
Auditor appointment
Following a competitive tender process concluded in May 2022, EY remained as the
external auditor. A timeline setting out the tenure of EY as auditor and requirements
on Softcat to next tender and change auditor is set out below:
Prior to July 2013
Rayner Essex LLP conducted the external audit immediately prior to FY2013
July 2013
EY appointed as auditor and conducted the external audit for FY2013
November 2015
Softcat becomes a publicly listed entity
October 2017
Mandatory change of EY lead audit partner
May 2022
EY reappointed as auditor, following competitive tender process
October 2022
Mandatory change of EY lead auditpartner
2027
Next mandatory change of EY lead audit partner
By July 2033
Pursuant to legislation, mandatory audit ﬁrm rotation, being up to 20 years
since appointment. Option, pursuant to transitional provisions, to extend
thisperiod to 2035, being 20 years since Softcat became a publicly
listedcompany
The Committee will continue to review the auditor’s appointment and the timing of
thenext tender for the audit, ensuring the Group’s best interests are considered and
ensuring compliance with the requirements of the UK Competition and Markets
Authority. Accordingly, the Group conﬁrms that it complied with the provisions
oftheCompetition and Markets Authority’s Order 2014 for the ﬁnancial year under review.
There are no contractual obligations restricting Softcat’s choice of external auditor.
For the ﬁnancial year ended 31 July 2024, the Committee recommended to the Board
that EY be reappointed under the current external audit contract and the Board endorsed
that recommendation. The Board has further proposed the reappointment ofEY at the
Annual General Meeting to be held in December 2024.
114 Softcat plc Annual Report and Accounts 2024
Audit Committee report continued
Other matters continued
Fair, balanced and understandable
continued
Following its review, the Committee is of
the opinion that the 2024 Annual Report
and Accounts, taken as a whole, is fair,
balanced and understandable. This allows
the Committee to provide positive
assurance to the Board to assist it in
making the statement required by
theCode.
Going concern and
viability statements
The Committee has reviewed the Group’s
ability to continue to operate as a going
concern for the 12-month period from
the date of this report and the Group’s
assessment of viability over a period
greater than twelve months. In assessing
viability, the Committee has considered
the Group’s position presented in the
annual budget and the three-year plan
recently approved by the Board. The
Committee also considered, amongst
other things, a number of scenarios
modelled by management, including a
severe but plausible downside scenario
and reverse stress tests carried out to
assess the strength of the Group’s
liquidity position. The Committee has
concluded that the assumptions and
mitigating actions are appropriate.
Further details are set out in the
statements on page 166 and page 89
ofthis Annual Report. The Committee
conﬁrms that, following review, it has
recommended both statements for
approval by the Board.
Governance and controls
During the year the Committee provided
oversight on a number of matters which
have further improved governance,
controls and reporting. This included:
• progress on a project to mature the
controls environment in the business;
• preparatory work to comply with
the changes under the 2024 UK
Corporate Governance Code and
new legislation on the corporate
offence of a failure to prevent
fraud; and
• a review of the minimum audit
standard for FTSE 350 companies
published by the FRC.
External audit
The Committee has primary responsibility
for overseeing the relationship with, and
performance of, the external auditor.
This includes making the recommendation
on the appointment, reappointment and
removal of the external auditor, assessing
its independence on an ongoing basis and
negotiating the audit fee. The Committee
is also responsible for considering the
most appropriate time and circumstances,
observing applicable legislation, to
conduct a tender for the external audit.
EY was ﬁrst appointed as the Group’s
auditor in July 2013 and was reappointed
following a competitive tender
(inaccordance with the 2014 Competition
and Markets Authority Order) for Softcat’s
2024 ﬁnancial year audit. In accordance
with the Auditing Practices Board’s
Ethical Standards, the term limit of an
audit engagement partner is ﬁve years.
Marcus Butler of EY is the lead audit
engagement partner for Softcat and
heis independent from Softcat, with
noknown conﬂicts of interest.
Audit risk
At the start of the audit cycle we received
and discussed with EY its detailed audit
plan identifying the audit scope, planning
materiality and assessment of key audit
risks. Planning materiality thresholds are
further updated by EY during the ﬁnancial
year following a refreshed assessment of
Softcat’s forecasted results, thus ensuring
that EY reviews all relevant transactions
inexcess of the applicable threshold.
The audit risk identiﬁcation process is
considered a key factor in the overall
effectiveness of the external audit
process, and the key risks for the 2024
ﬁnancial year closely align to the
signiﬁcant judgements and issues
above. The key risks identiﬁed included:
• revenue recognition and cut-off;
• presentation of revenue in respect
ofIFRS 15; and
• misstatement of rebate income.
In addition to key risks, EY’s audit plan
outlines additional areas of focus in their
review which they wish to draw to the
attention of the Committee. These
additional areas typically reﬂect standing
matters usually associated with an
external audit each year and additional
matters which reﬂect potential changes
in Softcat’s risk proﬁle.
Should the need ever occur, the
Committee has the authority to request
for additional areas to be reviewed if it is
deemed to be relevant for the integrity
of Softcat’s ﬁnancial statements. No such
additional areas were considered
necessary in respect of FY2024.
Working with the
externalauditor
The external auditor attended all
Committee meetings in FY2024 and
received all Committee reading papers
and minutes. After each Committee
meeting, we allow time if needed to
holda private meeting with the external
auditor, which provides additional
opportunity for open dialogue and
feedback from the Committee and the
auditor without management being
present. The external auditor has direct
access to the Committee Chair to raise
any concerns outside formal Committee
meetings and maintains a regular
dialogue with the Committee Chair.
Matters typically discussed include:
• auditor views on the resourcing of
internal functions which are important
to Softcat’s ﬁnancial reporting or
internal control environments;
• the external auditor’s assessment
ofbusiness risks;
• the transparency and openness
ofinteractions with management;
• conﬁrmation that there has been no
restriction in scope placed on it by
management; and
• the independence of its audit and
how the auditor has exercised
professional scepticism.
The Committee Chair, if appropriate,
willdiscuss with management any actions
arising from the private meetings with
the external auditor.
Effectiveness of the
external auditprocess
The Committee reviewed the quality of
the external audit throughout the year
and considered the performance of EY.
The effectiveness of the external audit
process is dependent on a number of
factors. These include the quality,
continuity, experience and training of
audit personnel, business understanding,
technical knowledge and the degree of
rigour applied in the review processes of
the work undertaken, communication of
key accounting and audit judgements,
together with appropriate audit risk
identiﬁcation at the start of the audit
cycle. The Committee also took into
account an assessment of the ﬁrm-wide
Audit Quality Inspection (‘AQI’) report
issued by the FRC in July 2024 together
with EY’s responses to that report. The
Committee noted that EY has a strong
track record of delivering high-quality
audit services amongst its listed company
client base. The Committee discussed
with EY its response to the FRC, which
included plans to further enhance the
quality and consistency of delivery of
itsaudits.
The Committee also noted a summary of
the AQI results issued in respect of other
audit ﬁrms, as part of the Committee’s
watching brief on the general quality
ofaudit ﬁrms.
115Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Internal control and
riskmanagement
The Committee has the primary
responsibility for the oversight of the
Group’s system of internal control,
including the risk management
framework and the work of the internal
audit function (see below). During the
year the Committee closely monitored
the Group’s internal control and risk
management systems and received
regular reports from management and
from the Risk, Assurance and Process
Improvement team (the ‘Risk and
Assurance’ team), together with an
outsourced internal audit function,
providing independent subject matter
expertise. Updates received covered
major risks and/or events faced by the
business. As Softcat continues to grow,
the Committee recognises the
importance of increasing its focus on
maturing our controls and formalising
our ‘second line of defence’. As part of
this commitment we have recruited on a
full-time basis a Head of Risk, Assurance
and Process Improvement, who attends
all Committee meetings and is engaging
extensively with thebusiness.
Assessment of the Group’s
system ofinternal control,
including the risk
management framework
The Group’s risk assessment process and
the way in which signiﬁcant business risks
are managed is a key area of focus for the
Committee. Our activity here was driven
primarily by the Group’s assessment of
itsprincipal risks and uncertainties, as set
out on pages 86 to 88.
The Group has in place an internal control
environment to protect the business
fromthe material risks which have been
identiﬁed. Management isresponsible for
establishing and maintaining adequate
internal controls over ﬁnancial reporting
and the Committee has responsibility
forensuring the effectiveness of these
ﬁnancial controls. As noted above, the
Committee has monitored management’s
plans and the progress being made to
further strengthen the control environment.
Following the conclusion of the 2024
ﬁnancial year, the Committee conducted
an effectiveness evaluation of the
external auditor. The evaluation was led
by the Committee Chair and involved
issuing a tailored evaluation questionnaire
for completion by the Committee.
A separate meeting was held between
the Chair of the Committee with selected
managers to gain feedback from those
most closely involved with EY in the year
-end accounts process. Managers also
attended who had worked on a project
during the year to further mature certain
controls so that EY can place greater
reliance on them as part of the year-end
audit. The overall feedback was positive
and it was noted that EY had engaged
well with the various Softcat teams and
that we continued to beneﬁt from good
continuity and experienced and
knowledgeable team members.
The results were discussed by the
Committee, which made further positive
comments about EY, in particular on its
understanding of the business and the
risks it faces, the technical expertise of
the audit team, the clarity and detail in
preparing its audit plan (including the
areas of audit focus) for the ﬁnancial year.
A small number of areas were highlighted
as opportunities for improvements, such
as how EY’s portal tool for dealing with
audit queries and requests for information
is used most effectively. These areas
willbe further discussed with EY for
progression in FY2025.
The Committee concluded that EY
continued to perform its role well, there
had been appropriate focus and
challenge on the primary areas of audit
focus from EY andthat the performance
of EY remained effective.
Independence
andobjectivity
The Committee has a policy governing
the engagement of the external auditor
to provide non-audit services. This
precludes EY from providing certain
services. The policy is reviewed annually
and was last updated in May 2024,
following the approval of minor
revisions. The latest version can be
found on the Group’s website at: www.
softcat.com/about-us/investor-centre/
governance. All non-audit services
provided by the external auditor are
reported to the Committee and a record
is kept so that the total costs regarding
non-audit work during a ﬁnancial year
are monitored.
For certain speciﬁc permitted services,
the Committee has pre-approved that
EY can be engaged by management,
subject to the policy set out above and
subject to a total of 10% of the current
external audit fee on an annual basis.
For all other services or those permitted
services that exceed these speciﬁed fee
limits, I, as Committee Chair, or in my
absence another Committee member,
can pre-approve permitted services.
The Committee also received conﬁrmation
from EY that there are no relationships
between Softcat and EY that may have
abearing on its independence.
In respect of the audit of the 2024
ﬁnancial statements, the Committee
considered a fee proposal from EY and
the Committee reviewed the quantum
and rationale relating to increased costs
for EY to undertake required audits.
Audit fees had increased slightly from
the previous year, reﬂecting the ongoing
growth of the Group, additional scoping,
and staff inﬂation costs. Following the
receipt of formal assurance that its fees
were appropriate for the scope of the
work required, the Committee agreed a
charge from EY of £758,500 for statutory
audit services in respect of the Group’s
annual ﬁnancial statements.
The Committee also agreed a fee of
£45,000 in respect of EY’s review of the
2024 half-year results, which is classiﬁed
as a non-audit fee. Further details of the
fees paid, for audit and non-audit
services, to EY for the 2023 and 2024
ﬁnancial years can be found in note 3 to
the ﬁnancial statements.
The Committee adheres to the
requirements of the Statutory Auditors
and Third Country Auditors Regulations
2016 (the ‘2016 Regulations’). The 2016
Regulations provide for a cap on
non-audit services of a maximum of 70%
of the average of the audit fees paid on a
rolling three-year basis. In order to ensure
this limit is not exceeded, the Group shall
in usual circumstances seek that permitted
non-audit fees shall not exceed 50%
ofthe average audit fee over the three
preceding ﬁnancial years in each case.
The three-year measurement period
covers the 2022, 2023 and 2024 ﬁnancial
years and is 5.5%, which remains
considerably below the cap.
Taking the above into consideration,
theCommittee has concluded that EY
remains independent and objective and
that appropriate safeguards and controls
are in place to assess ongoing
independence and objectivity.
116 Softcat plc Annual Report and Accounts 2024
Assessment of the Group’s
system of internal control,
including the risk
management framework
continued
The Committee has completed its review
of the effectiveness of the Group’s
system of internal control, including risk
management, during the year and up
tothe date of this Annual Report, in
accordance with the requirements of the
Guidance on Risk Management, Internal
Control and Related Financial and Business
Reporting published by the FRC, which
is applicable for the year under review.
As part of the ﬁnancial year-end process,
management presented to the Committee
an overview of the existing control
framework and itsummarised the key
controls in operation which underpinned
the ﬁnancial controlenvironment during
FY2024. Management had over the year
increased the documentation of certain
key controls and business processes,
including certain IT general controls and
ﬁnance controls.
Management had considered the
ﬁnancial control environment and
concluded that in its view the controls
had been operating effectively throughout
the year and, taken together, provided
ahigh degree of assurance that the
ﬁnancial statements are free from
material misstatement.
Through the processes outlined above,
the Audit Committee has considered all
signiﬁcant aspects of the Group’s
riskmanagement and internal control
systems for the year and up to the date of
this Annual Report, allowing it to provide
positive assurance to the Board to assist it
in making the statements required by the
UK Corporate Governance Code. No
signiﬁcant failings or weaknesses were
identiﬁed as a result of the review that
may signiﬁcantly impact the ﬁnancial
statements. However, had there been
anysuch failings or weaknesses, the
Committee and the Board conﬁrm that
necessary actions would have been taken
to remedy them.
Internal audit
During the 2024 ﬁnancial year, the Group’s
internal audit capabilities matured as part
of the process to strengthen our ‘second
line of defence’.
We utilised Grant Thornton LLP (Grant
Thornton) as an outsourced partner to
provide external subject matter expertise
as needed, effectively operating as a ‘third
line of defence’. Grant Thornton is a major
professional services ﬁrm with experience
in consulting, assurance and audit and the
relationship with the Audit Committee
isled by an experienced partner of
GrantThornton.
Grant Thornton worked closely with
ourRisk and Assurance team. The aim
oftheRisk and Assurance team (including
internal audit) includes providing
independent and objective assurance
onthe adequacy and effectiveness of
internal controls, risk management and
governance processes.
Monitoring and review of the scope,
extentand effectiveness of internal audit
isregularly considered by the Committee.
During the year, management discussed
with Grant Thornton the selection of
appropriate areas within the business
forinternal audit reviews. This was then
jointly presented by Grant Thornton and
management as a proposed annual internal
audit plan prior to the start of the ﬁnancial
year. The internal audit plan is then
reviewed and approved by the Committee
and may be varied with the agreement of
the Committee to ensure the audit plan
covers the most relevant issues.
The Committee receives an audit
reporton each audit undertaken,
whichincludes the results of the
audits,recommendations for changes
and management action plans to
addressany unsatisfactory audits
orrecommendations. The Risk and
Assurance team works closely with the
business to ensure that audit actions
areprogressed in a timely manner.
TheCommittee then receives regular
progress updates from the Risk and
Assurance team on previously undertaken
audits in order to ensure that outstanding
actions have been completed or closed,
or where there is a delay in closing an
action, revised completion dates
havebeen agreed and set.
The internal audit plan for FY2025 is
formulated taking into account a number
of factors, including consideration of the
material risks facing Softcat. Two internal
audits are currently scheduled for the
ﬁrst half of FY2025, as summarised below:
• Change, systems transformation
and governance: The Group has
several systems change programmes
planned, alongside numerous
ongoing projects across various
departments. Consequently, we
have prioritised the area of change,
systems transformation and
governance for auditing. This audit
aims to provide assurance on the
overall governance of programmes
and projects, offering insights into
how these initiatives are identiﬁed,
managed, and successfully completed.
• Business continuity/crisis
management: Given our continued
growth and scale, response plans for
business continuity and crisis events
must remain effective and relevant.
The Committee will agree other areas
tobe covered in audit reviews to be
conducted in the latter half of 2025.
Effectiveness of the
internal audit process
All parts of the internal audit function
have access to the relevant documentation,
premises, functions andemployees to
enable them to perform their activities.
Given the ongoing growth and maturity
of the Risk and Assurance team,
management and the Committee are
re-assessing the best way to resource
internal audit work and provide
independent subject matter expertise
and challenge going forward. A further
update will be provided in next year’s
Annual Report.
Robyn Perriss
Chair of the Audit Committee
23 October 2024
Audit Committee report continued
117Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Effectiveness
Nomination Committee report
Allocation of time
Board composition: 10%
Succession planning: 40%
Employee, culture, diversity
and inclusion: 25%
Corporate governance: 25%
The changes mark
thecompletion of a
smooth and seamless
succession and have
resulted in a ﬁrm
foundation for the
effective running of
the Board over the
nextfew years.
Lynne Weedall
Chair of the Nomination Committee
Committee
Chair’sintroduction
I am pleased to present this report
forthe year ended 31 July 2024 as
Chairofthe Nomination Committee
(the‘Committee’). Members of the
Committee are shown in the Board
biographies on pages 94 and 95 and
attendance at Committee meetings
forthe year is shown on page 96.
Inthisreport we explain the work of
theCommittee andongoing key areas
we continue toreview and discuss.
The Committee takes a long-term
approach to succession planning and
theprevious ﬁnancial year (ended
31July2023) was a busy period for
theCommittee, which had oversight
ofthe plan for extensive changes on the
Board. These changes were successfully
completed during this ﬁnancial year with
Mayank Prakash and Jacqui Ferguson
joining the Board as Non-Executive
Directors in September 2023 and
January 2024 respectively. The changes
mark the completion of a smooth and
seamless succession and have resulted
in a ﬁrm foundation for the effective
running of the Board over the next
fewyears. I would also like to thank
theother members of the Committee
and the other Board Directors for
theirtime, commitment, support
andcontribution in concluding this
particularly important process.
In addition to concluding the above
changes to the Board, the Committee also
continued its other work. We have ﬁrmly
established in the Committee’s annual
calendar regular updates and discussions
on employee culture and employee
engagement. Diversity, equality and
inclusion also continue to receive a high
level of attention by the Committee and
we have continued to make progress to
be a more diverse and inclusive employer.
We acknowledge that further
improvements are needed on gender and
ethnic diversity in some roles and in
management positions and we set revised
and more demanding ambition targets,
increasing the focus to further improve on
these metrics. This will continue to be a
longer-term endeavour as there are no
‘quick ﬁx’ solutions. More details are
provided below and in the Social Value
section of this Annual Report.
Below Board level, during the year the
Committee reviewed and discussed with
the Executive Directors the succession
plans for the Senior Leadership Team
(the most senior level of management
below the Board).
Membership, meetings
and operation of
theCommittee
All members of the Committee are
Non-Executive Directors and the
Committee is chaired by an independent
Director. The Chief Executive, Chief
Financial Ofﬁcer, Chief People Ofﬁcer
and Head of Engagement, Diversity and
Inclusion are invited to attend meetings
where appropriate. The Committee met
three times during the year. Committee
meetings generally take place on the
same day as the Board meeting to
maximise the efﬁciency of interaction
with the Board. If needed, the Committee
Chair will report to the Board, as a separate
agenda item, on theactions taken by the
Committee. TheCompany Secretary acts
as Secretary tothe Committee.
The key responsibilities of the Committee
are to advise on appointments to the
Board, to review Board composition
andto review succession planning both
forthe Board and senior management.
TheCommittee also reviews and provides
feedback on the initiatives to improve
diversity, equality and inclusion. Carrying
out these responsibilities is critical to
ensure the Board and wider business
have plans in place to have the best
available talent to drive the Group
forward and that there is Board-level
oversight to ensure we retainan
inclusive environment for all employees
and prospective employees.
118 Softcat plc Annual Report and Accounts 2024
Nomination Committee report continued
Key activities during
theyear:
The calendar of activities below provides
an overview of the key topics for the
Committee during the year.
October 2023
• Approval of the
2023 Nomination
Committee Report
• Recommendation to
reappoint Directors
atthe 2023 AGM
December 2023
• Review of the results of the
annual employee satisfaction
survey and planned actions
• Discussion on senior
management and Board
succession planning
• Discussion on format of
workforce engagement with
Non-Executive Directors
May 2024
• Update on diversity, equality
and inclusion
Regular or standing items
ateach Committee
meeting include:
• Approval of previous
Committee meeting minutes
and review of follow-up on
outstanding actions
• Governance updates for
Committee discussion
or approval
• Review of and updates to
the Committee’s terms
of reference
Membership, meetings
and operation of
theCommittee continued
Any Director who intends to join
theBoard is required to disclose all
signiﬁcant outside commitments prior
toappointment. On joining the Board,
Non-Executive Directors receive a
formal appointment letter, which,
amongst other things, identiﬁes the time
commitment expected of them. Each
Director continues to devote sufﬁcient
time to meet their Board responsibilities.
The Committee considered and
recommended that each Director willing
to stand for election or re-election be
proposed for reappointment at the
2023AGM. The Board endorsed all
thereappointment recommendations
ofthe Committee.
Board appointments
I am pleased with the progress made
thisyear on the Board’s composition,
which saw the conclusion of an orderly
and well-planned process which had
commenced in 2022. Graeme Watt
(Non-Executive Chairman), Graham
Charlton (CEO) and Katy Mecklenburgh
(CFO) have all settled quickly into their
new roles, each having been appointed
just over a year ago. We announced last
year that two further Non-Executive
Directors will be appointed to the
Boardin our 2024 ﬁnancial year, and
Mayank Prakash and Jacqui Ferguson
subsequently joined the Board in
September 2023 and January 2024
respectively. Both Mayank and Jacqui
undertook an extensive and tailored
induction programme prepared by the
Company Secretary with oversight from
the Company Chairman, which included
further discussions with their fellow Board
members, meeting members of the
Senior Leadership Team, meeting other
senior managers in the business and
receiving brieﬁngs from the Company’s
external advisers. Mayank and Jacqui
alsovisited some of Softcat’s ofﬁces.
As the Committee remains committed to
the Board having a diverse mix, if a Board
appointment is being contemplated, we
will usually only engage with search ﬁrms
which demonstrate good practice in
searching for a diverse range of candidates.
Certain search ﬁrms subscribe to voluntary
codes, which commit to good diversity
practices in the conduct of a candidate
search. By using ﬁrms which demonstrate
good practices, the Committee can
maximise the chances to consider a
diverse and inclusive range of suitable
candidates. The Board has retained its
diverse composition following the Board
changes mentioned above.
Vin Murria joined the Board in late 2015
as a Non-Executive Director, at the time
of Softcat’s ﬂotation on the London
Stock Exchange. The appointments of
Mayank and Jacqui took into account at
the time, in part, that Vin could potentially
retire from the Board at the conclusion
of her nine-year tenure. As mentioned
elsewhere in this Annual Report, Vin has
now conﬁrmed that she will not stand for
re-election at the 2024 AGM to be held
in December, when shewill retire from
the Board. The composition of the Board
will remain effective following Vin’s
retirement. The Board, particularly after
taking into account the recent changes,
has a strong and diverse range of skills,
experience, lengths of tenure, views and
backgrounds. The composition works
well and provides the right mix of
challenge, freshthinking, retained
corporate memory and support to the
business. The Committee will, however,
keep under review, as it has always done,
therequired skill sets and expertise
toensure the ongoing optimal
effectiveness of the Board.
Vin is the longest serving member of
theCommittee and I thank her for her
valuable insights and wise counsel over
the years.
119Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Our current Non-Executive Chairman
Graeme Watt was formerly Softcat’s CEO
until 31 July 2023. Upon being appointed
Chairman, Graeme fully transitioned
away from all executive duties, all of
which were undertaken from that time
byGraham Charlton, the current CEO.
The Committee acknowledges that the
appointment of the former CEO into the
role of the Non-Executive Chairman is
not in line with the recommendations
ofthe UK Corporate Governance Code.
The Board remains unanimous that
Graeme’s deep knowledge of the
business and Softcat’s culture and its
markets made him the ideal person to
support the interests of all of Softcat’s
stakeholders. Through our ongoing
governance engagements with major
shareholders, strong support continues
to be expressed for the appointment.
The Board operates a highly effective
governance model and practice in
respect of the clearly separate roles of
CEO and Non-Executive Chairman and
the operation ofthis was conﬁrmed
again during the Board performance
evaluation exercise, which is described
in more detail on page 100.
More information about the Board’s
compliance with the 2018 UK Corporate
Governance Code (which applies for the
year under review) can be found on pages
90 and 91. Graeme was ﬁrst appointed
to the Softcat Board as CEO in April 2018
and the Committee acknowledges the
recommendation of Code Provision 19
that a chair should not remain in post
beyond nine years from the date of their
ﬁrst appointment to the board.
Succession planning
The Committee keeps a watching brief
on the likely retirement dates of Board
members, particularly in respect of the
tenure provisions in the UK Corporate
Governance Code. This is conducted
aspart of the Committee’s longer-term
routine succession planning and plans
for Board composition refreshment.
Below Board level, the Committee works
with the Chief People Ofﬁcer and the CEO
and reviews annually the plans which are
in place for orderly succession planning
of our Senior Leadership Team (‘SLT’).
The succession plans identify both
internal and external potential successor
candidates. We retain a strong internal
talent pipeline and our annual review
also includes updates on leadership
development at management levels and
on efforts to develop a more diverse
pipeline for leadership roles.
Board member
reviewprocesses
The Company Chairman is responsible
for conducting an annual review of the
CEO and each Non-Executive Board
member. The CEO performs a similar
process with the CFO. The reviews
gather additional feedback to support
the good running of the Board. The
Board also conducted an internal
(i.e.self-assessed) Board effectiveness
review which resulted in overall a positive
assessment of the Board’s performance
but equally some valuable small pointers
on how to make further improvements.
More information on this year’s
effectiveness review can be found
intheGovernance Report on pages
100and 101.
Jacqui Ferguson is the Senior
Independent Director (‘SID’), who is
responsible for conducting a review
ofthe performance of the Company
Chairman. Jacqui spoke with each
othermember of the Board and with
theCompany Secretary, gathering
feedback. She then led a meeting of the
Non-Executive Directors, without the
Company Chairman present, to discuss
the Company Chairman’s performance.
The Non-Executive Directors conﬁrmed
that they continued to be happy with the
performance and remain fully supportive.
Minor points were collated from the
feedback for action.
The Chairman also operates a short
review process at the end of the day
foreach Board meeting. This ensures
instant feedback from the Board and
supports an agile continuous
improvement process.
As a result of the above points and
following further consideration by the
Committee, we have recommended
tothe Board that each serving Director
(with the exception of Vin Murria, who is
retiring) be proposed for reappointment
at the AGM to be held in December 2024.
120 Softcat plc Annual Report and Accounts 2024
Nomination Committee report continued
Diversity and inclusion
We make extensive efforts for Softcat to be a great place to work and the success of our achievements is clear. Please see pages
52 to 59 for more details. As part of this endeavour, the Board and the Committee devote signiﬁcant time to the issue of diversity
and inclusion in the Group and management realises the importance and beneﬁts of creating a more diverse workforce at all
levels in the Group. This continues to be a long-term endeavour and we recognise it as such. The Committee also recognises the
importance of diversity and inclusion both for the effective functioning of the Board and more widely in the Group. The Board
hasa diverse range of experience by way of expertise and background and recognises the beneﬁts that different viewpoints can
contribute to better decision-making.
The most recent report from FTSE Women Leaders provides recommended aspirational targets for gender diversity in FTSE 350
companies by the end of 2025:
FTSE Women Leaders: targets for
FTSE350 companies by the end of 2025 Current Softcat position
Boards to comprise at least
40%women.
Achieved. The Board of Softcat currently comprises 62.5% women.
Boards to have at least one
womanin the chair or senior
independent director role, and/or
one woman inthe chief executive
orﬁnance director role.
Achieved. Katy Mecklenburgh was appointed CFO in June 2023. Lynne Weedall was interim
Senior Independent Director until 1 May 2024, following which Jacqui Ferguson assumed
the role on a permanent basis.
Leadership teams (as deﬁned)
tocomprise at least 40% women.
Softcat is included in the latest annual report of FTSE Women Leaders, which for Softcat
reported women comprising 37.9% of leadership roles (as deﬁned). This was an improvement
on the prior year of 32.6% and we continue our efforts to improve diversity in leadership roles.
I am pleased that Softcat already meets
two of the above three targets and that
we are making progress on the gender
diversity target on leadership teams.
Asalready noted, we recognise that we
must maintain momentum in respect of
greater diversity at leadership level, and
this continues to be discussed between
management and the Committee.
The Board meets the recommendation
set by the Parker Review that boards
should have at least one person of
colour. During the year management
discussed with the Committee the most
recent recommendations of the Parker
review, in which they asked each company
for the ﬁrst time to provide data on its
senior management (as deﬁned) and
what proportion of it is composed of
ethnic minorities. The Parker Review has
also asked each company to set a target
for the proportion of ethnic minorities in
senior management by the end of 2027.
We have provided all the required
information to the Parker review and
wehave set target of at least 10% ethnic
minorities in senior management
(asdeﬁned) by the end of 2027.
Whilst we have reached some of the
above targets, it is not the policy of the
Committee to set a quota in terms of the
gender or ethnic diversity mix on the
Board or its Committees. Our policy,
which we have implemented, is:
• the primary criterion for
an appointment is that it is
made on merit;
• the appointment achieves the
best ﬁt with the Board and its
Committees; and
• to keep in mind the beneﬁts of the
Board and its Committees having a
diverse range of skills, experience
and professional backgrounds.
Diversity disclosures
pursuant to Listing
Rule6.6.6R
The UK Financial Conduct Authority
(‘FCA’) requires listed companies to
disclose in a prescribed format
information on the diversity of their
board and executive committee. The
Listing Rules require listed companies
tostate whether they have met certain
targets on board diversity.
Theinformation in the table on the
following page is at 31July 2024, which
isthe date selected as the reference date
within the Company’s accounting period.
The targets set out inthe Listing Rules
arethat:
• at least 40% of the individuals on
itsboard of directors are women;
• at least one of the following senior
positions on its board of directors
isheld by a woman:
−the chair; or
−the CEO; or
−the CFO; or
− the SID; and
• at least one individual on its board
of directors is from a minority ethnic
background.
As at the reference date, the Board
ofSoftcat met all of the above targets.
121Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Gender diversity reporting
Number of
Board
members
Percentage of
the Board
Number of
senior
positions
on the Board
(CEO, CFO,
SID, Chair)
Number in
Executive
management
Percentage of
Executive
management
Men 33 7.5% 2 7 6 3.6%
Women 5 62.5% 2 4 36.4%
N o t s p e c i ﬁ e d/p r e f e r n o t t o s a y ———— —
Ethnic background diversity reporting
Number of
Board
members
Percentage of
the Board
Number of
senior
positions
on the Board
(CEO, CFO,
SID, Chair)
Number in
Executive
management
Percentage of
Executive
management
White British or other White (including minority White groups) 6 75% 4 10 90.9%
M i x e d/m u l t i p l e e t h n i c g r o u p s ———— —
Asian/Asian British 2 25% — — —
Black/African/Caribbean/Black British — — — 1 9.1%
O t h e r e t h n i c g r o u p, i n c l u d i n g A r a b ———— —
Notes:
1. The Listing Rules require disclosure at the applicable reference date, which as noted above was 31 July 2024. The composition of the Board has not
changed between 31 July and 23 October 2024, being the date at which this report is approved. The composition of the Board as at 23 October 2024
stillmeets the above requirements.
2. ‘Executive management’ is deﬁned above using the prescribed deﬁnition in the Listing Rules. This is deﬁned as the most senior executive or managerial
body below the Board, including the Company Secretary. At Softcat, this is the Senior Leadership Team (‘SLT’), which has day-to-day responsibility for the
operation of the business, and the Company Secretary. The SLT includes the Executive Directors.
The human resources team had previously conducted a voluntary survey to all existing employees asking them to conﬁrm how
they should be identiﬁed for gender and for ethnic background. New employees are requested to make such a conﬁrmation.
Thissurvey/information request includes Executive management (as deﬁned) and has also been extended to the Board, including
the Non-Executive Directors. Responses were received from each member of the Board and Executive management which
conﬁrmed how they should be identiﬁed. The above data has been collated from those survey responses.
Inclusion
The Committee has also received brieﬁngs on the initiatives to improve inclusion in the business and the Company employs a
dedicated manager to co-ordinate our diversity, equality and inclusion efforts. The brieﬁngs received by the Committee included
not only diversity regarding gender, but also on ethnicity, sexual orientation, disability, social mobility and updates on vari ous
inclusion activities. More information about diversity, equality and inclusion in the business can be found in the report on so cial
value in this Annual Report on pages 52 to 59.
122 Softcat plc Annual Report and Accounts 2024
The...Committee...realises the importance and
beneﬁts of creating a more diverse workforce
atall levels in the Group.
Assessment of the
independence and
conﬂicts of the
Non-Executive Directors
The Committee and the Board are
satisﬁed that the external commitments
of the Company Chairman and the other
Non-Executive Directors do not conﬂict
with their duties and commitments
asDirectors of the Company.
OurDirectorsmust:
• report to the Board any material
changes to their commitments;
• notify the Company Secretary of
actual or potential conﬂicts or a
change in circumstances relating
toan existing authorisation; and
• complete an annual
conﬂictsquestionnaire.
Any conﬂicts identiﬁed are considered
and, as appropriate, authorised by the
Board. Each year the Committee reviews
the independence of the Non-Executive
Directors. All Non-Executive Directors,
excluding the Company Chairman, are
currently considered independent.
All Non-Executive Directors also
afﬁrmas part of the annual conﬂicts
questionnaire that they continue to
beable to devote sufﬁcient time to
discharge their duties in respect of
theirBoard appointment at Softcat.
Documents available
forinspection
Non-Executive Directors are appointed
for an initial three-year term, extendable
by a further two additional three-year
terms. The letters of appointment for
Non-Executive Directors and the service
contracts of the Executive Directors are
available to shareholders for inspection
at the Company’s registered ofﬁce
during normal business hours. Letters
ofappointment and service contracts
will be available for inspection at the
2024AGM.
The formal responsibilities of the
Committee are set out in the terms
ofreference. During the year, the
Committee reviewed the terms of
reference and concluded that no
amendments were required. The
Committee’s terms of reference are
available at www.softcat.com/about-us/
investor-centre/governance.
Shareholder engagement
If any shareholders or proxy voting
advisory agencies would like to raise
anymatters with me in respect of the
Committee, I can be contacted via the
Company Secretary at cosec@softcat.com.
Lynne Weedall
Chair of the Nomination Committee
23 October 2024
Nomination Committee report continued
123Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Corporate responsibility
Sustainability Committee report
Since the establishment
of the Committee, its
focus has remained on
Softcat’s sustainability
strategy and I am
pleased with the
progress we
aremaking.
Vin Murria
Chair of the Sustainability Committee
Introduction
As Chair of the Sustainability Committee
(the ‘Committee’), I am pleased to present
the Committee’s report for the year
ended 31 July 2024. This report outlines
the key responsibilities of the Committee
delegated to it by the Board, the work it
has done over the 2024 ﬁnancial year and
the focus of the Committee going forward.
The Committee was established in
March2022, with responsibility for the
monitoring and oversight of sustainability
matters at Softcat. Since the establishment
of the Committee, its focus has remained
on Softcat’s sustainability strategy and
Iam pleased with the progress we are
making. The importance of sustainability
to Softcat and its stakeholders continues
to increase and the Committee recognises
that our commitment to sustainability is
not only the right thing to do, it can also
be a competitive advantage.
Allocation of time
Climate-related strategy and initiatives: 40%
Climate-related disclosures: 20%
Climate-related governance, compliance
andregulation: 20%
Monitoring climate-related performance
against strategy: 20%
The Committee’s work is therefore
vitaland I would like to thank each of
theCommittee members for their
genuine interest and enthusiasm in their
oversight of our sustainability strategy.
Management has also dedicated further
resources to address the many actions
ithas identiﬁed to meet our obligations
and reduce our impact on the
environment and to continue laying the
foundations which will support Softcat
tomaximise the opportunities of being
amore sustainable business.
For further details on the above, please
see pages 60 to 82 of this Annual Report.
Members of the Committee are shown in
the Board biographies on pages 94 and
95 and attendance at Committee meetings
for the year is shown on page 96.
Committee Chair and
operation of the Committee
I am the Chair of the Committee and
assuch take primary responsibility to
ensure the Committee is managed
effectively. We have embedded a
sustainability governance structure into
the business so that we have leadership
and expertise in the right place and at
the right levels within the organisation.
The CFO retains the executive lead
atSoftcat for sustainability. We have
adedicated internal resource for
sustainability at Softcat, including
ourSustainability Lead. The Business
Transformation Director, who is a
member of the Senior Leadership Team,
has day-to-day senior management
ofsustainability in his brief. Both the
Sustainability Lead and the Business
Transformation Director attend the
meetings of the Committee so that the
Committee is kept fully apprised and
candiscuss matters with those most
responsible for sustainability in
thebusiness.
The Company Secretary acts as Secretary
to the Committee. The Company Secretary
also takes responsibility for brieﬁng
theCommittee on material changes in
legislation and in disclosure requirements
regarding our sustainability obligations.
Two meetings of the Committee were
held in FY2024 and, given the Committee
has been operating for a relatively short
period, the Committee has reviewed
whether this is sufﬁcient in order to carry
out its duties. The Committee concluded
that two meetings a year is sufﬁcient.
During the year, we agreed to slightly
expand the running times of the
Committee’s meetings to ensure there
isadequate time for the Committee’s
reviews and discussions. Asthe CFO
hasthe executive lead at Softcat
forsustainability, she also includes
anupdate on sustainability as part
ofherreport at each Board meeting,
whichallows the Board to discuss
anymaterial developments between
Committee meetings.
124 Softcat plc Annual Report and Accounts 2024
• ongoing progress against our key
sustainability targets;
• further integration of Softcat’s
sustainability strategy into its
overall strategy;
• further work with our vendors on
oursupply chain in support of our
netzero target by 2040;
• further increasing compliance with UK
Climate-related Financial Disclosures;
• progress to realise the potential
opportunities from more sustainable
offerings to our customers; and
• continuing to monitor the
development of the new Sustainable
Disclosure Standards (‘UK SDS’)
which are anticipated in 2025. The
Committee has already received
updates from management on the
likely requirements of UK SDS and
ispreparing for compliance.
Shareholder engagement
More details on sustainability, including
our annual report on sustainability, can be
found on our website at www.softcat.com/
about-us/sustainability.
As mentioned elsewhere in this Annual
Report, I am close to completing my nine
years as a Director and, in compliance
with the UK Corporate Governance
Code, I will not be standing for re-election
at the 2024 AGM. I have enjoyed my time
as Chair of this Committee in the last
twoyears and I am delighted with the
progress we have made. Robyn Perriss
will take over as Chair of the Committee
and I’m sure she will be a great Chair and
she will add further value.
If any shareholders would like to raise
any matters with the Committee Chair
inrespect of the work of the Committee,
please let the Company Secretary know
via cosec@softcat.com.
I will be happy to answer any questions
about the work of the Committee at the
forthcoming AGM.
Vin Murria
Chair of the Sustainability Committee
23 October 2024
Sustainability Committee report continued
The Committee’s
keyresponsibilities
The key responsibilities of the
Committee are:
• setting the sustainability strategy
of Softcat;
• oversight and monitoring of the
performance of the Company against
its sustainability-related strategy,
goals and targets;
• monitoring the effectiveness of
management’s processes for
identifying and assessing climate-
related risks and opportunities;
• reviewing, on behalf of the
Remuneration Committee, the
achievement of any sustainability
objectives which form part of
the annual bonus plan for the
ExecutiveDirectors;
• oversight of the Company’s
sustainability compliance obligations;
• reviewing our formal public
disclosures relating to
sustainability; and
• oversight of other areas of corporate
social responsibility, if requested by
the Board.
For more on the Committee’s
responsibilities, the Committee’s terms
of reference are available on our website
at: www.softcat.com/about-us/investor-
centre/governance.
Some areas of focus
inFY2024
In FY2024 the Committee maintained
itsfocus on climate change issues. This
included a review of our endeavours to
reduce our emissions and to leverage on
opportunities within the context of our
sustainability strategy. This is reﬂected
inthe following areas:
• The Committee reviewed
performance against the business’
three key target sustainability
commitments (see page 77), noting
that two had been achieved. The third
target is to achieve a net zero supply
chain by 2040 and the Committee
received updates at each meeting
onthe steps being taken towards this
target. The Committee recognises
that this is a longer-term endeavour,
which requires our largest vendors
to align the timing of their net zero
journeys with our own target. The
Committee was pleased with the
efforts of management to engage
extensively with the supply chain to
better understand the steps which
will be required to meet this target.
• Management presented further
details of the business case to take
better advantage of circular IT and
other routes to increase sustainable
offerings to Softcat’s customers.
The Committee noted that closer
alignment with the supply chain
will be needed to better realise the
opportunities and discussed with
management its plans to progress
this very important matter.
• The Committee received progress
reports on how sustainability is
becoming more embedded into the
business. This included the successful
rollout of sustainability training
Group-wide and dedicated support
for the sales team to make it easier
tosell more sustainable solutions to
our customers.
• The Committee reviewed progress
onsustainability performance metrics.
These focus on our greenhouse gas
emissions and are assessed through
the intensity measurements set
out on page 81. Recognising the
importance of sustainability data to
the business and our stakeholders,
management agreed to obtain
external assurance in respect of our
emissions data and the output of the
assurance exercise was reviewed by
the Committee.
• The Committee conducted a review
of the ESG governance framework
within the business, which concluded
that the framework was working well.
Changes were made in respect of
an internal working group to more
closely bring together the senior
managers involved with all key
elements of ESG.
• The Committee also received
regularupdates on future
complianceregulations, obligations
and best practice trends and
reviewed management’s plans
toensure compliance.
Areas of focus in FY2025
We expect that the main focus of the
Committee will remain on climate
change and associated sustainability-
related matters in FY2025. However, this
will be kept under review and will be
amended or expanded, where
necessary, to include other areas of
corporate responsibility to ensure the
Committee retains adequate oversight
of matters which are most important to
Softcat and its stakeholders. I anticipate
in FY2025 the Committee will focus on:
125Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Business performance
You will see elsewhere in this Annual
Report that Softcat demonstrated strong
performance this year. We achieved
record operating proﬁt and made positive
progress on our most important key
ﬁnancial measures. This is an excellent
outcome given the headwinds which
continue to challenge many businesses.
Non-ﬁnancial performance is also critical
for our success and we have again
achieved excellent results on our
employee satisfaction and customer
engagement metrics. These metrics are
crucial indicators on the quality of our
culture and form the foundations to
carry out our growth agenda. The
importance ofsustainability continues to
increase, both for us and our stakeholders,
and wearemaking steady progress on
our longer-term goals.
I would like to pick out some key
achievements which demonstrate how
well the business isperforming:
• Gross proﬁt growth: 11.7%
• Operating proﬁt growth: 9.3%
• Employee engagement: 90%
• Customer satisfaction: 98%
The above key performance indicators
(‘KPIs’) reﬂect the unwavering commitment
and dedication of our employees, guided
by the strategic vision and leadership of
the Executive Directors. Further details
on our KPIs and the importance of each
KPI can be found on pages 36 and 37
ofthis Annual Report.
Letter from the Chair of the
Remuneration Committee
Remuneration Committee report
Allocation of time
Executive remuneration: 45%
Workforce remuneration and conditions: 25%
Remuneration market practice and
developments: 15%
Corporate governance: 15%
The Committee
considered it
appropriate to
continue showing
restraint in considering
the pay rises for
Executive Directors.
Lynne Weedall
Chair of the Remuneration Committee
Dear shareholder
Introduction
I am very pleased to present this report
as Chair of Softcat’s Remuneration
Committee (the ‘Committee’). Members
of the Committee are shown in the
Board biographies on pages 94 and 95
and attendance at Committee meetings
for the year is shown on page 96. This
report explains the work of the Committee
during the year and its key discussions,
decisions and approvals. Information
about the remuneration of Directors
isalso provided in accordance with
applicable statutes, regulations and
good governance.
The Group’s core principles of
remuneration are:
• to ensure top executives are
attracted, retained and motivated
todrive the Group in its next stage
ofdevelopment;
• to incentivise management in
extending the Group’s leadership
in the IT infrastructure solutions
industry; and
• to deliver long-term
sustainable growth.
In line with these principles, the majority
of our executive remuneration outcomes
are based on ﬁnancial metrics. Given
that wider non-ﬁnancial metrics also
measure the success of the business,
weinclude environmental, social and
governance (‘ESG’) measures as part of
our annual bonus plan. The Board has
been impressed by the progress made
by management on both ﬁnancial and
non-ﬁnancial measures.
126 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Letter from the Chair of the Remuneration Committee continued
Remuneration Policy
(the‘Policy’)
Our Policy was approved by
shareholders at the 2022 AGM with
avote of 98.5%. The Committee has
reviewed the Policy during the year and
has concluded that it remains ﬁt for
purpose. The Committee also discussed
the changes contained in the updated
UK Corporate Governance Code (the
‘Code’) published earlier in the year and
concluded that, given the minor changes
in the updated Code which relate to
remuneration, no immediate changes
were required to the Policy. Our Policy is
submitted to shareholders for approval
at least once every three years and will
next be submitted at the 2025 AGM,
atwhich time we will incorporate, as
appropriate, changes contained in the
updated Code.
Remuneration outcomes
during the year
During the year, the Board/relevant
Board Committee regularly reviewed
Softcat’s ﬁnancial and operational
performance. We conﬁrmed in trading
updates during the year that:
• the Group performed well and once
again delivered growth in gross proﬁt
and operating proﬁt;
• business performance was
robustdespite ongoing wider
economic challenges;
• operational metrics, such as cash
generation, were excellent; and
• our customer base and gross proﬁt
per customer continued to grow.
The Board/relevant Board Committee
also regularly reviewed key ESG
areas,including:
• the outcomes of our annual
customerexperience survey and
our employee engagement survey,
together with actions to further
maintain engagement;
• a quarterly survey from managers
in respect of each member of the
Senior Leadership Team and the key
operational functions in the business;
• work undertaken to improve diversity
and inclusion;
• actions taken to increase compliance
on the recommended Climate-related
Financial Disclosures (‘CFD’); and
• obtaining external assurance in
respect of the measurement of
ourcarbon emissions.
The strong ﬁnancial and non-ﬁnancial
performances are reﬂected in a strong
achievement of many of the Group’s
KPIs(outlined on pages 36 and 37) and
resulted in the following for the annual
bonus plan for FY2024:
• ﬁnancial metrics (operating proﬁt)
account for 80% of the annual bonus
for FY2024. Operating proﬁt of
£154.1m exceeded the threshold
target but was below the maximum
target set by the Committee, leading
to 71.9% of the maximum annual
bonus for this element being earned
by the Executive Directors; and
• non-ﬁnancial metrics account for
20% of the annual bonus for FY2024.
Important areas of focus were set at
the beginning of FY2024 in respect of:
− achieving industry-leading
levels of net promoter scores
for customer satisfaction and
employee engagement;
− continued improvement in the
veriﬁcation and assurance on
the data in respect of our carbon
emissions; and
− improvements to disability
accessibility at all phases of our
recruitment process.
The Committee assessed actions
takenby management during the year
on the above and was informed by a
recommendation from the Sustainability
Committee in respect of the bonus
element on the veriﬁcation and assurance
of carbon emissions. Following review,
the Committee concluded that a
consistently high level of achievement
had been made on each of the above
non-ﬁnancial metrics and that 100%
ofthe maximum annual bonus for this
element had been achieved by the
Executive Directors.
As a result, the overall annual bonus
outcome this year was 77.5% of
maximum for each ExecutiveDirector.
Awards made under our LTIP have a
three year vesting period and therefore
measure performance over a sustained
period. Inlate 2023, the LTIP awards
granted in November 2020 to Graham
Charlton (whowas CFO at the time of
grant) and to Graeme Watt (who was
CEO at the time ofgrant) vested.
Anindependent vesting report was
prepared by the Committee’s external
remuneration advisers and the
Committee assessed the vesting
outcomes of the LTIPs. The Committee
concluded that:
• the maximum goal had been
achieved in respect of the earnings
per share (‘EPS’) element of
the award;
• the metric in respect of the total
shareholder return (‘TSR’) element
ofthe award was above threshold
butbelow maximum.
Accordingly, 92.4% of thetotal 2020 LTIP
award vested.
During the year, the Committee
concluded that all long-term incentive
and annual bonus outcomes were
appropriate and no discretion was
exercised to amend any remuneration
outcomes for the Executive Directors.
This conclusion was reached after taking
into account relevant matters, such as:
• the performance of the business and
the alignment between the Executive
Directors and the wider workforce
in respect of annual variable pay for
the year;
• the overall investor experience,
which the Committee believes, in
particular over a number of years
represents exceptional performance
by management;
• an assessment of the ‘quality of
earnings’ in respect of operating
proﬁt for the year; and
• any potential beneﬁt from windfall
gains experienced over the three-year
vesting period.
There has not been any operation of
malus or clawback provisions in any year.
127Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
In respect of LTIPs, the Committee will
approve a grant in respect of FY2025 to
the Executive Directors (see page 140).
In line with our Remuneration Policy and
recent practice, the LTIP award will be
150% of salary. The Committee
considered movements in the
Company’s share price during the year
and concluded that there was no reason
to reduce the usual award of 150% of
salary. However, the Committee will
review at vesting, as it has done in recent
years, whether there have been any
windfall gains.
The LTIPs granted in 2021 are due to vestin
late 2024 and the performance conditions
were set and announced at the time of
grant. Based on our reported performance,
the maximum EPS target has been
achieved and therefore this element will
likely vest in full. Based on our current
performance and the higher share price at
the time of grant in 2021, itis likely that the
TSR element will not meet the threshold
requirements and that no part of this
element will vest. Itwill be necessary to
perform a ﬁnal calculation ofthe TSR
element at vesting, assessing Softcat’s
performance against the comparator
group to formally determine achievement
of that part oftheperformance condition.
In respect ofall LTIPs, the Committee will,
asusual consider all relevant matters
before formally concluding on the
vestingoutcome.
Main activities during FY2024
October 2023
• Consideration and approval of grants of LTIPs to Executive Directors
for FY2024 and other share-based awards to senior managers below
Board level
• Review and determination of vesting outcomes for LTIPs granted in 2020
• Review of impact of share-based awards on shareholder dilution
• Review and approval of the annual bonuses awarded to Executive
Directors and Senior Leadership Team (‘SLT’) members for FY2023
• Consideration of the annual bonus arrangements for the Executive
Directors and SLT members for FY2024
• Review of achievement against share ownership targets for the
Executive Directors
• Approval of the 2023 Annual Report on Remuneration
May 2024
• Update on workforce pay and conditions and discussion of Group-wide
pay review
• Review of salaries for the Executive Directors and SLT
• Review of the Chairman’s fee
• Interim update report on performance of annual bonus plan and
outstanding LTIPs
• Proposed renewal of plan rules for the LTIP and annual bonus plan
• Review of remuneration aspects of the 2024 UK Corporate
Governance Code
July 2024
• Update on workforce remuneration
• Review of proposed approach to target setting for FY2025 annual bonus
and LTIP awards
• Consideration of key messages and themes for the 2024 Annual Report on
Directors’ Remuneration
• Review of remuneration trends and remuneration-related corporate
governance developments for listed companies
• Review of workforce engagement session on remuneration
• Review of employee share ownership
• Further update on renewal of plan rules for the LTIP and annual bonus plan
Regular or standing items at each Committee meeting include:
• approval of previous Committee meeting minutes and review of follow-up on
outstanding actions;
• governance updates for Committee discussion or approval;
• review of and updates to the Committee’s terms of reference; and
• review of the outcomes of shareholder voting on the Remuneration Report.
The Company Secretary also prepares a twelve-month rolling plan for the Committee
so that matters can be planned and considered over the longerterm.
128 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Letter from the Chair of the Remuneration Committee continued
Changes in executive
remuneration and
Chairman fees for FY2025
The Committee reviewed remuneration
for Executives and the Chairman and
agreed the principles and implementation
of the changes below, all of which are
within our Remuneration Policy. Further
details are provided in the Annual
Report on Remuneration.
The Committee considered a number
ofmatters and received updates on
proposals to award rises in basic pay
across the workforce. The Committee
discussed with its remuneration adviser
external pay trends for Executives
andinthe general external workforce.
Following this, the Committee considered
it appropriate to continue showing restraint
in considering the pay rises forExecutive
Directors, and it approved a pay rise for
FY2025 of 3%, which is linewith the
standard rise for most of theworkforce.
Wider workforce context
The Board engages extensively with
employees and more details about
thiscan be found on pages 50 and 51.
During the year, the Committee also
maintained its awareness of pay across
the business. This was pertinent given
the ongoing increase in headcount to
now more than 2,500 employees and
prevailing cost-of-living pressures for
many. As already noted, the Committee
received updates on both internal
andexternal pay trends, all of which
helpedto inform the Committee’s
decision making, ensuring the pay
changes it approved reﬂected both
theGroup’s speciﬁc situation, wider pay
trends and also the factors some of our
largest shareholders and important
proxy remuneration advisers expect
remuneration committees to take
intoaccount.
Management continues to recognise
and reward our employees through
fairremuneration. The Committee was
pleased in particular with the actions
taken by management this year to ensure
workforce pay reviews are more closely
aligned to reﬂect individual performance.
I once again took the opportunity to
engage directly with employees over
anumber of matters, including on our
approach to executive remuneration and
on the Group’s overall pay philosophy.
Please see page 130 for more details.
What we have done
duringthe year
The calendar activities (see page 131)
summarise the areas of focus and actions
for the Committee during the 2024
ﬁnancial year, all of which were within
theframework of the Policy approved
byshareholders in 2022.
The Committee is also responsible
foroversight of the Group’s employee
share plans. We operate the Annual
andDeferred Bonus Plan for Executive
Directors and the Long Term Incentive
Plan for Executive Directors and selected
senior management. Both ofthese
planswere approved by shareholders
inOctober 2015 and will expire in
October 2025. Shareholder approval
isrequired prior to the expiry of these
plans and so two resolutions will be
proposed at the Annual General Meeting
in December 2024 to renew each plan
for a further ten years. No material
changes are being proposed in respect
of the operation of either plan and
asummary of the key points of the
proposed rules for each plan is provided
in the Notice ofAnnual General Meeting
for 2024.
The Committee remains open to the
views of shareholders and during the
year responded to an engagement
request from one of our largest
shareholders. We have incorporated
additional information in this report
inresponse to their feedback.
Looking forward
andconclusion
The Committee remains focused
onensuring that our remuneration
arrangements are ﬁt for the future and
aimed at ensuring alignment of both
shareholders and our management team
as they strive to drive Softcat forward.
Iwould like to thank the members of
theCommittee for their support and
contributions this year.
Our Remuneration Policy was last
approved by shareholders at the AGM
held in December 2022. In line with
regulations, the Policy will be submitted
to shareholders for approval at least
once every three years and will therefore
be submitted to shareholders at the
AGM to be held in 2025. The Committee
will review the existing Policy in 2025 and
will, if necessary, discuss any material
changes with its largest shareholders.
As already noted, earlier in the year,
theFinancial Reporting Council (‘FRC’)
issued an updated version of the UK
Corporate Governance Code (the ‘Code’),
under which remuneration-related
aspects of the revised code will apply
foraccounting periods commencing from
1 January 2025. The Committee does
not envisage that material Policy
amendments will be required as a result
of the updated Code. Under the updated
Code, additional disclosures are required
in the Annual Report on Remuneration
on the malus and clawback provisions
which apply to the remuneration of
Executive Directors. The disclosures in
Softcat’s Annual Report on Remuneration
in recent years already cover nearly all
ofthese new requirements and, given
that only minor additional information
isrequired to be fully compliant, this
additional information is being provided
starting from this year’s report.
The Annual Report on Remuneration
(pages 125 to 146) including this letter,
will be subject to an advisory shareholder
vote at the forthcoming AGM on
9December 2024. I trust that we will
continue to have your support on this
resolution at our AGM. If shareholders
dowish to discuss any issues in this report,
Ican be contacted via the Company
Secretary at cosec@softcat.com.
Lynne Weedall
Chair of the Remuneration Committee
23 October 2024
Notes:
This report has been prepared in accordance
withSchedule 8 to the Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations 2008 as amended and the provisions
of the 2018 Corporate Governance Code (which
is applicable for the year under review) and the
Listing Rules. The report consists of two sections:
• the Annual Statement by the
RemunerationCommittee Chair; and
• the Annual Report on
Remuneration,incorporating:
− an ‘At a glance’ section summarising
ourRemuneration Policy; and
− details of payments made to the Directors
and details of the link between Group
performance and remuneration for the
2024 ﬁnancial year.
The Chair’s Annual Statement and the
AnnualReport on Remuneration will be subject
toan advisory vote at the AGM to be held on
9December 2024.
129Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Part A – At a glance
Introduction
In this section, we set out a summary of our Remuneration Policy, its link to corporate strategic objectives and the performance
and remuneration outcomes for the 2024 ﬁnancial year.
Our Remuneration Policy and its link to our Group strategy
The Group’s strategy is laid out on pages 30 to 35.
Ensuring the alignment of the Remuneration Policy to the Group strategy was key for the Remuneration Committee in developing
the Policy below in conjunction with our core principles of remuneration.
The key elements of the Group’s strategy and how its successful implementation is linked to the Group’s Remuneration Policy are
set out in the following table.
Strategic priorities
Remuneration Policy (from the
date of shareholder approval)
Generate sector-
leading value
forshareholders
Growth in proﬁt from
existing customers Win new customers
Equity
ownership
and retention
ofshares
Retain and
reward executive
team to deliver
the strategy
Annual bonus
The maximum bonus (including any
part of the bonus deferred) under
the Annual Bonus Plan (‘ABP’) will
not exceed 200% of a participant’s
annual base salary.
For 2025:
• the maximum bonus
opportunity is 150% for the
CEOand CFO respectively; and
• the annual bonus measures
include 20% based on robust
environmental, social and
governance (‘ESG’) goals.
Operating proﬁt
The key performance indicator for the Group. The Committee believes that the Directors should
focus on this key metric during the ﬁnancial year to maintain high proﬁt growth and the success of
the business to deliver value for our shareholders.
Growth in this metric is a direct demonstration of the successful execution of our business strategy,
including winning new customers and growth of proﬁt from existing customers.
Non-ﬁnancial measures
The Committee also believes in the importance of wider non-ﬁnancial metrics to measure the
success of a business, including the use of ESG measures. The Committee will consider appropriate
measures linked to strategic priorities.
LTIP
Maximum annual award is normally
200% of salary. The normal annual
award for each of the CEO and CFO
is150% of salary.
Awards will vest at the end
ofthreeyears.
The performance conditions for
awards comprise ﬁnancial and
performance measures, currently:
• earnings per share (‘EPS’)
growth; and
• comparative total shareholder
return (‘TSR’).
For 2025, the LTIP award will be
weighted 60% EPS and 40% TSR.
EPS and TSR
The success in
maximising proﬁt
growth will be
measured through
the long-term EPS
growth targeted by
the LTIP. In addition,
sustained value
generation will be
reﬂected in the
share price of the
Company, which
willbe measured
through the
Company’s TSR
performance under
the LTIP.
TSR
The generation of
proﬁt growth targeted
by the annual bonus
will help enhance the
value of the Group,
which will be
measured through
thesuccess of the
Company’s TSR
performance against
its comparators
(aperformance
condition under
theLTIP).
EPS
An incentive to grow
this market in the
longer term is
provided through EPS
growth targeted by
the LTIP. The success
of this element of the
strategy should be
reﬂected in long-term
TSR performance.
Share Incentive Plan (‘SIP’)
Minimum shareholding requirements
• CEO: 200% of salary
• CFO: 200% of salary
130 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part A – At a glance continued
Our Remuneration Policy and its link to our Group strategy continued
Our core principles of remuneration:
• to ensure senior executives are attracted, retained and motivated to drive the Group in its next stage of development;
• to incentivise the management team in extending the Group’s position in the IT infrastructure solutions industry; and
• to deliver long-term sustainable growth.
Statement of consideration of shareholder views
The Committee takes the views of the shareholders seriously and these views are taken into account in shaping the Remuneration
Policy and remuneration practices of the Group. Shareholder views are considered when evaluating and setting the remuneration
strategy and the Committee commits to consulting with key shareholders prior to any signiﬁcant changes to its Remuneration
Policy or any material changes within the existing Policy.
The Remuneration Policy was last approved by shareholders at the Company’s Annual General Meeting held in December 2022
and prior to that time the Committee had consulted with its major shareholders on the minor Policy revisions which had been
proposed. Shareholder support remains strong for the remuneration practices of the Group. The Remuneration Policy received
98.5% votes in favour at the 2022 AGM and the advisory vote for the Annual Report on Remuneration at the 2023 AGM received
96.7% votes in favour. The Committee is grateful for the continued support of shareholders. Given there have been no material
changes in the remuneration approach in the last year and the ongoing high level of support from shareholders, the Committee
didnot consider it was necessary or appropriate to consult with its shareholders on executive remuneration in the last year.
As part of its review of the Policy in 2022 and remuneration practices, the Committee considered the factors set out in Provision
40 of the UK Corporate Governance Code (the ‘Code’). In the Committee’s view, the Policy continues to address those factors.
Further details of how the Committee has addressed this can be found in the Policy in the 2022 Annual Report.
Statement of considerations of employment conditions elsewhere in the Group
The remuneration strategy for all employees is determined in terms of best practice and ensuring that the Group is able toattr act
and retain the best people. This principle is followed in our Remuneration Policy.
The remuneration strategy of the Group has been designed to ensure all employees share in its success. Two remuneration
arrangements operate: the LTIP for Executive Directors and for some members of the senior team and annual bonus deferral for
Executive Directors. Awards under both these plans will provide alignment between senior leaders and our shareholders based
on overall corporate performance of the business.
All employees have base pay, certain employment beneﬁts, a pension plan and all eligible employees may participate in the
Share Incentive Plan. Commissions are available for qualifying sales employees whilst other employees may participate in other
annual bonus plans.
The Group does not use remuneration comparison measurements. The Board has designated a Non-Executive Director
responsible for general workforce engagement. There are also regular employee engagement meetings led by the CEO and
CFO. The Chair of the Remuneration Committee has directly engaged with a group of employee representatives to explain how
executive remuneration aligns with wider Group pay philos ophy. The engagement provided useful feedback and further
assurance to the Committee that executive remuneration is considered to be well aligned with the Group’s wider philosophy on
pay, particularly in respect of the importance of setting appropriate benchmarks for ﬁxed pay and on the importance of variable
pay as an incentive to drive stretching performance. The Committee believes there is strong alignment between executive pay,
wider workforce pay, the Group’s culture and strategy. In setting and operating the Remuneration Policy, the pay and conditions
ofother employees of the Group are taken into account, including any base salary increases awarded and any changes in pension
and beneﬁts.
The Committee is provided with data on the remuneration structure for management-level tiers below the Executive Directors
and uses this information to ensure consistency of approach throughout the Group. During the year, the Committee received
updates on pay and beneﬁts across the general workforce. The pay and conditions of other employees of the Group are
takeninto account, including any base salary increases awarded and the level of employer pension contribution. The Committee
received an update during the year on the level of employee participation in the business regarding the Share Incentive Plan
inorder to better understand its relative importance to employees. The Committee is also informed, in line with the provisions
ofthe UK Corporate Governance Code, of the proposed remuneration of Softcat’s Company Secretary.
131Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
The table below shows how our incentive schemes support the Group strategy.
Strategic objectives
Plan Purpose Eligibility
Generate
sector-leading
value for
shareholders
Growth in proﬁt
from existing
customers
Win new
customers
Equity
ownership
andretention
ofshares
Retain and
reward executive
team to deliver
the strategy
SIP
Broaden share
ownership and share
incorporate success
overthe mediumterm.
All eligible employees
Annual
bonus
Incentivise and
rewardshort-term
performance. Atsenior
level, an element
ofbonus is deferred
inshares.
Executive Directors,
senior executives, senior
managers andmanagers
LTIP
Incentivise and reward
long-term performance.
Executive Directors,
senior executives and
senior managers
How we performed during the 2024 ﬁnancial year (‘FY2024’) (audited)
In respect of FY2024, the bonus awards payable to Executive Directors were agreed by the Committee having carefully reviewed:
• ﬁnancial performance (80% weighting): the Committee considered the Group’s year-end results and any relevant associated
factors in respect of underlying performance; and
• non-ﬁnancial performance (20% weighting): the Committee considered progress against strategically important ESG actions
(employee engagement, customer satisfaction, sustainability and employee inclusion) and noted the ongoing strong performance.
The performance measures and targets under the Annual and Deferred Bonus Plan for FY2024 and the extent to which they were
satisﬁed are set out below:
Performance condition Weighting Threshold Target Maximum Actual
Actual as
a % of
maximum
opportunity
Annual bonus payout
Graham
Charlton
Katy
Mecklenburgh
Operating proﬁt 80% £136.5m £151.7m £166.9m £154.1m 71.9% £490,227 £319,369
Progress on strategic
ESG metrics and actions
20% See below 100% £170,384 £111,000
Overall outcome 7 7.5%£660,611 £430,369
Portion of overall
outcome paid in cash
1
£378,630 £246,667
Portion of overall
outcome deferred
intoshares
1
£281,981 £183,702
Note:
1. In respect of the bonus payout up to 100% of salary, two-thirds will be paid in cash and one-third will be paid by way of deferred shares. In respect of the
bonus payout above 100% of salary, all of this shall be by way of deferred shares.
132 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part A – At a glance continued
How we performed during the 2024 ﬁnancial year (‘FY2024’) (audited) continued
ESG: employee engagement, customer satisfaction, sustainability and inclusion
Priorities and rationale for selection Achievements and outcome
Employee engagement
Maintain our high level of success on
employee engagement. Highly engaged
employees are vital to the success of Softcat.
We receive frequent feedback that our culture
is the vital ingredient to providing outstanding
service which helps to retain and delight our
existing customers and to win new customers.
• The Committee set a target at the beginning of the ﬁnancial year for
industry-leading employee net promoter scores (‘NPS’) to be achieved in
theall-employee survey for the year. The employee NPS for this year’s survey
was 59, which is an excellent result and above market norms.
The Committee also took into account other relevant factors as part of its
determination, including the below.
• Management sought regular employee feedback with the annual
engagement survey and through quarterly management surveys conducted
during FY2024. The results of each survey were discussed with the Board/
Nomination Committee, together with management’s plans which addressed
areas of concern.
• An action plan was created and followed up from the annual survey results.
• Overall employee engagement achieved remained high at 90%.
• The Group once again achieved excellent external rankings and awards for
its workplace environment (see the ‘People’ section on page 56).
Priorities and rationale for selection Achievements and outcome
Customer satisfaction
Continue our attention on market-leading
customer excellence. Customer excellence
isavital underpin to our strategy to acquire
more customers and to sell more to
existingcustomers.
• The Committee set a target at the beginning of the ﬁnancial year for
industry-leading customer net promoter scores (‘NPS’) to be achieved in the
annual customer satisfaction survey. The customer NPS for this year’s survey
was 63, which is an excellent result and above market norms.
The Committee also took into account other relevant factors as part of its
determination, including the below.
• Management undertook its most extensive ever annual customer experience
survey (5,663 respondents in FY2024 , compared to 4,049 in FY2023),
engaging with more of our customers than ever before.
• An impressive level of customer satisfaction was achieved at 98%.
• The results of the customer survey were analysed in detail by management
and a plan to continue the high levels of customer service and make minor
improvements for even better service has been prepared for action.
Priorities and rationale for selection Achievements and outcome
Sustainability
Verify our greenhouse gas emissions data and
show progress towards our net zero supply
chain goal by 2040.
In pursuit of our climate change goals, it is
important to ﬁrst ensure that we are accurately
measuring the business’s greenhouse gas
emissions. External veriﬁcation of this data
improves the robustness of our data.
We have a Board-approved target to achieve
acarbon net zero supply chain by 2040.
Thisrequires extensive industry liaison and
understanding of mutual issues and actions.
• Management demonstrated to the Sustainability Committee the progress
being made regarding the accuracy of data for emissions calculations.
• During the year, management approved the engagement of an independent
ﬁrm to review our emissions data. Conﬁrmation of the assurance in respect
ofour emissions data is included in this Annual Report on page 82.
• Management demonstrated to the Sustainability Committee the extensive
engagement with its supply chain and peers to discuss and agree areas
which need to be prioritised to reduce scope 3 (i.e. primarily supply chain)
emissions. This is a long-term process but signiﬁcant efforts continue
to be made.
• Additional resource has been added to the sustainability team to focus on
supply chain engagement. A dedicated sustainability customer success
manager has been recruited to support the sales function in the sale of more
sustainable solutions, an important enabler in our efforts to lower the carbon
footprint in the supply chain.
133Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Priorities and rationale for selection Achievements and outcome
Inclusion
Improve accessibility during the recruitment
process to those who identify with a disability.
Softcat has a proud record of diversity and
inclusion. However, it has not formally
assessed with the support of an independent
expert any difﬁculties those who have a
disability experience when applying for a role
at Softcat. This assessment further supports
our desire to be a fully inclusive place to work.
• Management hired an independent expert to review our current recruitment
processes with the objective of ensuring our engagement resources work
well for those who have a disability and to identify any barriers which may
exist in the recruitment process. A detailed report was produced, which
included recommendations for further improvements which may beneﬁt job
applicants with a disability. The outcomes of the review were discussed with
the Nomination Committee of the Board, which has oversight of diversity,
equality and inclusion.
• Recommendations from the review are being progressed. These include
making the Softcat website more accessible and additional training for the
recruitment team.
In respect of the ESG measures, the Committee agreed at the beginning of the performance period a range of illustrative
outcomes to consider at threshold, target and maximum to determine whether meaningful progress had been made across the
metrics. This would be taken into account along with any other relevant actions or progress related to the above ESG measures.
The Committee reviewed the illustrative outcomes against the progress made at the end of the performance period, to ensure
that a fair and comprehensive review of progress had been undertaken. The Committee concluded, overall, that good progress
had been made on the ESG measures, resulting in the determination of an award of 100% of the maximum opportunity in respect
of the ESG measures.
No discretion was exercised by the Committee in relation to the outcome of any part of the annual bonus awards.
Long-term incentives awarded in FY2024 (audited)
On 23 November 2023, the following annual awards of nil-cost options under the Group’s Long Term Incentive Plan (‘LTIP’) were
made to the Executive Directors as follows:
Executive Director
LTIP award
(% of salary)
LTIP award
(shares) Award date Share price
1
G Charlton 150 68,703 23/11/23 £12.40
K Mecklenburgh 150 44,758 23/11/23 £12.40
Note:
1. The share price used to determine the award was calculated by reference to the prevailing market price of an ordinary share on the business day prior to
the award.
40% of the award will be subject to the Company’s relative TSR performance against the FTSE 250 (excluding real estate and
investment trusts) over a three-year performance period and 60% will be subject to adjusted EPS targets at the end of the perio d.
Further details are on page 137.
Single ﬁgure remuneration for our Executive Directors
The table below sets out the single total ﬁgure of remuneration and breakdown for each Executive Director in respect of FY2024.
Salary
Taxable
beneﬁt Pension
Total
ﬁxed Bonus LTIP
Total
variable Total
G Charlton (CEO)
1, 2
£567,945 £4,454 £28,399 £600,798 £660,611 £346,470 £1,007,081 £1,607,879
K Mecklenburgh (CFO)
3
£370,000 £2,716 £18,500 £391,216 £430,369 — £430,369 £821,585
Notes:
1. LTIP awards made on 25 November 2020 to Graham Charlton vested during FY2024. The award was calculated by reference to a share price of £11.45,
which was the prevailing market price of an ordinary share on the business day preceding the grant. Details of the performance condition (relative TSR
andEPS targets) were disclosed in an announcement to the London Stock Exchange at the time of grant.
2. As a result of partial achievement of the performance criteria, nil-cost options over 24,943 shares vested and were subsequently exercised by Graham
during FY2024. The share price at the date of vesting (closing price on 24 November 2023 being the closest business day to the third anniversary of the
grant) was £12.45 and the LTIP value shown above reﬂects this. The total value shown above comprises £310,540 (the value of the award at vesting) plus
adividend equivalent of £35,930. The value of the LTIP that is attributable to share price appreciation between grant and vest is £24,943.
3. Katy Mecklenburgh was appointed CFO with effect from 19 June 2023.
134 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part A – At a glance continued
Remuneration Policy table summary
In accordance with the remuneration reporting regulations, the Directors’ Remuneration Policy (the ‘Policy’) summarised below
was approved at the AGM on 13 December 2022 and will apply for a period of three years from the date of approval. The Policy
iscontained in Softcat’s 2022 Annual Report and Accounts, which is available on the Group’s website at www.softcat.com/
about-us/investor-centre/shareholder-information.
The Committee’s objective is to operate this Policy to ensure that our Executive Directors have a remuneration structure and total
remuneration opportunity that is aligned to Softcat’s business and is competitive when assessed against the market in which we
compete for talent.
Salary
An Executive Director’s basic salary is set on appointment and reviewed annually or when there is a change in
position or responsibility.
When determining an appropriate level of salary, the Committee considers:
• remuneration practices within the
Group;
• the general performance of the Group;
• salaries within the ranges paid by the companies in the comparator group used for remuneration benchmarking;
• any change in scope, role and responsibilities; and
• the economic environment.
In general, salary increases for Executive Directors will be in line with the increase for employees.
Individuals who are recruited or promoted to the Board may, on occasion, have their salaries set below the
targeted Policy level until they become established in their role. In such cases, subsequent increases in salary
maybe higher than the general rises for employees until the target positioning is achieved.
Beneﬁts
The Executive Directors receive private health insurance, critical illness, life insurance and death-in-service beneﬁt.
Additional beneﬁts may be offered, such as relocation allowances on recruitment. The maximum will be set at the
cost of providing the beneﬁts described.
Non-Executive Directors may participate in beneﬁt programmes available to employees which have the purpose
of reducing environmental emissions.
Pensions
The Executive Directors are entitled to participate in the Group’s applicable pension plans. Executive Directors’
pensions are aligned with the employer contributions for the wider workforce, currently 5% of salary.
Annual and
Deferred Share
Bonus Plan
(the ‘Bonus Plan’)
The Remuneration Committee will determine the maximum annual participation in the Annual Bonus Plan for
each year, which will not exceed 200% of salary. The maximum bonus opportunity is currently 150% of salary.
Thiscan only be attained by achieving a level of stretch in the targets set.
There is a mandatory deferral of one-third of bonuses up to 100% of salary and all bonuses above 100% of salary
into shares. The deferred elements vest after a minimum period of three years based on continued employment.
The bonus contains clawback and malus provisions.
Long Term
Incentive Plan
(‘LTIP’)
LTIP maximum grant is 200% of salary p.a. (up to 250% in exceptional circumstances).
The Committee considers and sets the performance measures and targets for each LTIP award. See page 137
forthe performance conditions of the grant made in the year.
The LTIP contains clawback and malus provisions.
There is a mandatory two-year post-vesting holding period.
Share Incentive
Plan (‘SIP’)
The Group operates a SIP in which the Executive Directors are eligible to participate. The SIP is operated in line
withHMRC legislation and is open to all eligible employees (UK employees with at least three months’ service). The SIP
encourages employees to become shareholders in the Company and thereby align their interests with shareholders.
Minimum
shareholding
requirement
The following table sets out the minimum shareholding requirements:
Role
Shareholding requirement
(% of salary)
Chief Executive and Chief Financial Ofﬁcer 200
The Committee retains the discretion to increase the shareholding requirements.
There is also a mandatory two-year post-cessation holding period.
135Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Element of remuneration Operation
Non-Executive
Director and
Chairman fees
The Board is responsible for setting the remuneration of the Non-Executive Directors. The Remuneration
Committee is responsible for setting the Chairman’s fees.
Non-Executive Directors are paid an annual fee. They are also paid additional fees for chairing Committees and
forthe role of Senior Independent Director and may receive an additional fee in respect of the Designated
Non-Executive Director forWorkforce Engagement. The Chairman does not receive any additional fees for
membership of Committees.
Fees are reviewed annually based on equivalent roles in the comparator group used to review salaries paid
totheExecutive Directors. Fees are set at broadly the median of the comparator group.
Non-Executive Directors and the Chairman do not participate in any variable remuneration. Non-Executive
Directors and the Chairman are not eligible to participate in beneﬁt arrangements, apart from any beneﬁt
programme available to employees which have the purpose of reducing environmental emissions.
The
Group will pay reasonable expenses incurred and may settle any tax incurred in relation to these.
There are no changes to the approved Directors’ Remuneration Policy. The full Policy is available to view in Softcat’s 2022 Ann ual
Report which is on the Group’s website at www.softcat.com/about-us/investor-centre/shareholder-information.
Illustrations of the application of the Remuneration Policy
The charts below illustrate the remuneration that would be paid to each of the Executive Directors for the 2025 ﬁnancial year
under three different performance scenarios: (i) minimum; (ii) on target; and (iii) maximum. The elements of remuneration have
been categorised into three components: (i) ﬁxed; (ii) annual bonus (deferred bonus); and (iii) LTIP.
In line with the regulations on policy scenarios, we have also included an additional reference point to show indicative share price
growth of 50% over three years (being the performance period of the LTIP) at maximum.
£’000
41%100%100%
29%
29%
976
26%
37%
37%
1,548
22%
31%
47%
1,834
405
41%
29%
29%
1,496
26%
37%
37%
2,374
22%
31%
47%
2,812
619
2,800
2,400
2,000
1,600
1,200
£’000
800
0
Minimum
Fixed Bonus LTIP
On target Maximum Maximum
(including
50% share
price growth)
Minimum
Fixed Bonus LTIP
On target Maximum Maximum
(including
50% share
price growth)
400
1,800
1,500
1,200
900
600
0
300
Chief Executive Ofﬁcer (Graham Charlton) Chief Financial Ofﬁcer (Katy Mecklenburgh)
136 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part A – At a glance continued
Illustrations of the application of the Remuneration Policy continued
The table below sets out the assumptions used to calculate the elements of remuneration for each of the scenarios set out in the
charts on the previous page.
Element Description Minimum Target Maximum
Maximum including
50%share price growth
Fixed
1
Salary, beneﬁts and pension Inc luded Included Included Included
Annual
bonus
2
Annual bonus (including
deferred shares): maximum
opportunity of150% of salary
No annual variable 50% of the
maximum bonus
100% of the
maximum bonus
100% of the
maximumbonus
LTIP
2,3
Award under the LTIP:
maximum annual award
of150% of salary
No multiple-year variable 50% of the
maximum award
100% of the
maximum award
100% of the maximum
award plus 50% share
price growth
Notes:
1. Based on 2024 beneﬁts payments and pension values as per the single ﬁgure table. The actual beneﬁts and pension contributions for FY2025 in respect
ofboth Executive Directors will only be known at the end of that ﬁnancial year. Basic pay also reﬂects the 3% increase awarded for FY2025 for each of the
CEO and CFO.
2. Share price growth has been included in the ﬁnal illustration in accordance with the required regulations. Dividend equivalents have not been added to
the deferred share bonus and LTIP share awards.
3. Participation in the SIP has been excluded given the relative size of the opportunity levels.
Executive Director contracts and letters of appointment for Chairman and
Non-Executive Directors
Executive Directors
Name Date of service contract
Nature
of contract
Notice periods
Compensation
provisions for
early termination
From
Company
From
Director
G Charlton 29 October 2015 Rolling Twelve months Twelve months None
K Mecklenburgh 1 December 2022 Rolling Twelve months Twelve months None
Non-Executive Directors
Name Date of letter of appointment
G Watt 11 July 2022
V Murria 3 November 2015
R Perriss 21 May 2019
L Weedall 21 March 2022
M Prakash 31 July 2023
J Ferguson 31 July 2023
Note:
The Committee’s policy for setting notice periods is that a twelve-month period will apply for Executive Directors.
The Non-Executive Directors (including the Chairman) do not have service contracts. The Non-Executive Directors are appointed
by letters of appointment. Each independent Non-Executive Director’s term of ofﬁce runs for a three-year period. The Chairman
issubject to three months’ notice from either the Company or the Chairman. The other Non-Executive Directors donot have
notice periods.
The initial terms of the Non-Executive Directors’ positions are subject to their re-election by the Company’s shareholders at the
AGM and to re-election at any subsequent AGM at which the Non-Executive Directors stand for re-election. All Directors who
wish to be re-elected will be put forward for re-election by shareholders on an annual basis.
137Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Part B – Annual report on remuneration
Single total ﬁgure of remuneration (audited)
Executive Directors (audited)
The table below sets out the single total ﬁgure of remuneration and breakdown for each Executive Director in respect of FY2024
and FY2023.
Salary
Taxable
beneﬁts
3
Pension Total ﬁxed
1
Bonus
2,4
LTIP
2
Total variable Total
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
G Charlton
(CEO/CFO)
5
567.9 367.6 4.5 4.6 28.4 12.6 600.8 384.8 660.6 456.3 346.5 379.6 1,007.1 835.9 1,607.9 1,220.7
K Mecklenburgh
(CFO)
5
370.0 44.8 2.7 — 18.5 2.2 391.2 47.0 430.4 98.3 — — 430.4 98.3 821.6 145.3
Notes:
1. Fixed pay consists of salary, taxable beneﬁts and pensions as set out above.
2. Variable pay consists of bonus and LTIP as set out above. Further details on the LTIPs which vested and were exercised by Graham during the year are
provided in the section ‘Single ﬁgure remuneration for our Executive Directors’ above.
3. See section below setting out details of the beneﬁts provided.
4. Details of the bonus targets, their level of satisfaction and the resulting bonus earned in FY2024 are set out on page 131 to 133.
5. Graham Charlton was CFO until 18 June 2023. Katy Mecklenburgh was appointed CFO with effect from 19 June 2023.
Taxable beneﬁts
Beneﬁts in the year for the Executive Directors comprised health beneﬁts such as private health insurance, health cash plan,
critical illness, income protection and dental and life cover. Figures are reported where appropriate.
FY2024 annual bonus outcomes
In respect of FY2024, the bonus awards payable to Executive Directors were agreed by the Committee, having carefully reviewed:
• ﬁnancial performance (80% weighting): the Committee considered the Group’s year-end results and any relevant associated
factors in respect of underlying performance; and
• non-ﬁnancial performance (20% weighting): the Committee considered progress against key actions in respect of ESG actions
(employee engagement, customer satisfaction, sustainability and inclusion) and noted the ongoing strong performance.
The annual bonus structure operating for FY2025 will be similar to FY2024 and is explained on pages 131 to 133.
Details of the targets used to determine bonuses in respect of FY2024 and the extent to which they were satisﬁed are shown on
pages 131 to 133. These ﬁgures are included in the single ﬁgure table.
Long term incentives vested in FY2024 (audited)
Awards under the Group’s LTIP granted in November 2020 to Graham Charlton and to Graeme Watt (at which time Graeme was
CEO) vested and were exercised by Graham and Graeme in FY2024. Vesting of the awards was subject to the following
performance conditions (which were disclosed at the time of grant):
Measure Weighting Details
Adjusted EPS 50% • No vesting of this element for adjusted EPS at end of performance
period of below 38.9p
• 20% vesting (threshold) for achieving 38.9p
• Full vesting for achieving 46.9p or above
• Straight-line vesting between threshold and full vesting
Relative TSR – assessed against
theconstituents of the FTSE 250
(excluding real estate and equity
investment trusts)
50% • No vesting for below median performance against the comparators
• 30% vesting (threshold) for median performance
• Full vesting for upper quartile performance
• Straight-line vesting between threshold and full vesting
EPS for FY2023 was 56.0p per share and this element of the performance condition was achieved in full. TSR was ranked between
the median and the upper quartile and as a result 84.86% of this element of the performance condition was achieved. Following
formal review by the Committee, the Committee conﬁrmed that vesting of the award would be in line with the achievement
against performance conditions. Further details on the LTIPs which vested are provided in the tables in respect of single ﬁgure
remuneration for Graham and on page 138 for Graeme.
138 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part B – Annual report on remuneration continued
Single total ﬁgure of remuneration (audited) continued
Long term incentives vested in FY2024 (audited) continued
As a result of the partial achievement of performance conditions, the table below details the LTIP granted in November 2020, the
number of shares lapsed and the number vested and exercised. When Graeme retired as CEO on 31 July 2023, the Committee
treated him as a ‘good’ leaver and he retained his LTIP awards subject to pro-rating from the date of retirement to the respect ive
vesting dates. The table below includes the LTIPs lapsed from the November 2020 award due to the pro-rating:
Director
LTIP options granted
in November 2020 LTIP options lapsed
LTIP options vested
and exercised
G Watt
1
40,480 7,222 33,258
G Charlton 26,986 2,043 24,943
Note:
1. These lapsed options shown for Graeme Watt consist of 2,724 shares which lapsed as the performance condition was not achieved in full and 4,498 shares
which lapsed due to pro-rating on Graeme’s retirement as CEO on 31 July 2023.
Non-Executive Directors (audited)
The table below sets out the single total ﬁgure of remuneration and breakdown for each Non-Executive Director.
Non-Executive Director 2024 fees 2023 fees Roles
G Watt
1
£236,345 — Chairman
M Hellawell
2
— £203,747 Former Chair
V Murria £76,800 £75,000 Independent Non-Executive Director, Designated Director for Workforce
Engagement and Chair of the Sustainability Committee
L Weedall £101,925 £90,438 Chair of the Remuneration Committee and Chair of the Nomination Committee
M Prakash
3
£56,650 — Independent Non-Executive Director
J Ferguson
4
£39,425 — Senior Independent Director
R Perriss £76,800 £75,000 Independent Non-Executive Director and Chair of the Audit Committee
K Slatford
5
— £40,898 Former Independent Non-Executive Director
Notes:
1. As previously reported, the Remuneration Committee exercised its discretion to allow Graeme to continue to receive his health beneﬁts as Chairman.
Thecost of providing this cover during FY2024 and other P11D beneﬁts was £4,345 and is included in the ﬁgure for Graeme’s fees above. Graeme’s
Chairman fee for the year was £232,000.
2. Martin retired from the Board on 31 July 2023.
3. Mayank joined the Board on 1 September 2023.
4. Jacqui joined the Board on 1 January 2024.
5. Karen retired from the Board on 17 January 2023.
Graeme Watt share awards as former CEO
Graeme Watt was appointed Non-Executive Chairman with effect from 1 August 2023. Prior to that he was CEO and he
participated in Softcat’s LTIP and Annual Bonus Plan, which included awards of deferred shares. As previously explained, the
Committee approved that Graeme’s outstanding LTIPs when he retired as CEO shall be pro-rated and that the deferred bonus
shares shall not be pro-rated. LTIP and deferred share awards made in 2020 to Graeme vested during FY2024 and are not
included in the above.
In respect of the 2020 LTIP, awards were made over 40,480 ordinary shares; this was pro-rated on retirement reducing Graeme’s
award to 35,982 and as a result of partial achievement of the performance criteria, 92.43% of the pro-rated award vested. Optio ns
over 33,258 were exercised by Graeme during FY2024. The share price at the time of exercise was £12.45 per share, resulting in
again of £414,062.
All of the 2020 deferred share awards over 16,857 ordinary shares vested and were exercised by Graeme during FY2024.
Theshare price at the time of exercise was £12.45 per share, resulting in a gain of £209,869.
Executive Director participants in the LTIP and deferred share awards may also receive a cash payment representing the value
ofdividends (a dividend equivalent) on the shares over the performance period. A cash dividend equivalent payment was made
to Graeme upon vesting of both the 2020 LTIP and 2020 deferred share awards of £33,080 and £16,770 respectively.
139Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Scheme interests awarded during the ﬁnancial year (audited)
Long Term Incentive Plan awarded in FY2024 (audited)
On 23 November 2023, the following annual awards of nil-cost options under the Group’s Long Term Incentive Plan (‘LTIP’) were
made to the CEO and CFO:
Director Award type
Basis of award
(% of salary)
Face value
of award
£
Number
of shares
granted
Date of
grant
Date of
vesting
Share
price
1
G Charlton Nil-cost options 150% 851,917 68,703 23/11/23 23/11/26 £12.40
K Mecklenburgh Nil-cost options 150% 554,999 44,758 23/11/23 23/11/26 £12.40
Note:
1. The share price used to determine the award was calculated by reference to the prevailing market price of an ordinary share on the business day prior
tothe award.
40% of the award is subject to the Company’s relative TSR performance against the FTSE 250 (excluding real estate and
investment trusts) over a three-year performance period to the end of FY2026 and 60% subject to adjusted EPS targets at the end
of the period. Theseconditions are set out below:
Measure Weighting Details
Adjusted EPS 60% • Nil vesting of this element for adjusted EPS at end of performance period
ofless than 59.1p
• 20% vesting (threshold) for achieving 59.1p
• 67% vesting for achieving 66.1p
• Full vesting for achieving 71.8p or above
• Straight-line vesting between 20% and 67% and between 67% and
full vesting
Relative TSR – assessed against
the constituents of the FTSE 250
(excluding real estate and equity
investment trusts)
40% • Nil vesting for below median performance against the comparators
• 30% vesting (threshold) for median performance
• Full vesting for upper quartile performance
• Straight-line vesting between threshold and full vesting
The EPS targets were set following the end of the 2023 ﬁnancial year based on an assessment of the business and were included
inthe2023 Annual Report on Remuneration. The adjusted earnings per share for the purposes of the LTIP performance measure
iscalculated as earnings per share in accordance with IAS 33, adjusted for exceptional items as determined by theCommittee.
Deferred Bonus Plan awarded in FY2024 (audited)
On 23 November 2023, awards under the Group’s Deferred Bonus Plan (‘DBP’) were made as set out below, in respect of
achievement under the Annual Bonus Plan in FY2023. Deferred shares are not subject to further performance conditions and vest
following a three-year holding period.
Director Award type
Face value
of award
£
Number
of shares
granted
Date of
grant
End of
deferral
period
Share
price
1
G Watt
2
Nil-cost options 316,770 25,546 23/11/23 23/11/26 £12.40
G Charlton Nil-cost options 211,184 17,031 23/11/23 23/11/26 £12.40
K Mecklenburgh
3
Nil-cost options 25,036 2,019 23/11/23 23/11/26 £12.40
Note:
1. The share price used to determine the award was calculated by reference to the prevailing market price of an ordinary share on the business day prior
tothe award.
2. Graeme retired as CEO on 31 July 2023 and participated in the Annual Bonus Plan for the full 2023 ﬁnancial year.
3. Katy joined the Board on 19 June 2023 and did not participate in the annual bonus plan for the full 2023 ﬁnancial year.
140 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part B – Annual report on remuneration continued
Long Term Incentive Plan to be awarded in FY2025
Vesting of the awards will be subject to the following performance conditions:
Measure Weighting Details
Adjusted EPS 60% • No vesting of this element for adjusted EPS at end of performance period
ofbelow 65.9p
• 20% vesting of this element for adjusted EPS at end of performance
period of 65.9p
• 67% vesting of this element for adjusted EPS at end of performance
period of 73.6p
• Full vesting for 79.7p
• Straight-line vesting between 20% and 67% and between 67% and
full vesting
Relative TSR – assessed against
theconstituents of the FTSE 250
(excluding real estate and equity
investment trusts)
40% • No vesting for below median performance against the comparators
• 30% vesting (threshold) for median performance
• Full vesting for upper quartile performance
• Straight-line vesting between threshold and full vesting
Pension entitlements (audited)
The Group operates a deﬁned contribution pension scheme which the Executive Directors can participate in, or they can take
acash supplement in lieu of pension.
In FY2024, Graham Charlton and Katy Mecklenburgh were entitled to 5% of salary either as an employer pension contribution
intothe deﬁned contribution scheme or as a pension cash allowance. This is in line with employer pension contributions available
for the general workforce.
None of the Directors receive an entitlement under a deﬁned beneﬁt plan.
Share Incentive Plan (‘SIP’)
There were no free shares awarded in FY2024 (FY2023: Nil). Free shares were awarded under the SIP on 11 December 2015, and
became free of any restrictions on the ﬁfth anniversary following the award. Graham was awarded 301 free shares in 2015, which
he retained.
The Executive Directors have an entitlement to purchase partnership shares under the SIP. Graham Charlton purchased 121
partnership shares and Katy Mecklenburgh purchased 79 partnership shares during the year. The total SIP holdings are provided
on page141 as part of the Directors’ share interests table.
Payments to past Directors/payments for loss of ofﬁce (audited)
There were no payments for loss of ofﬁce made to Directors in the year.
141Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Statement of Directors’ shareholding and share interests (audited)
Other shares held
Options
Shareholding
requirement
met? Director
Shareholding
requirement
(% of salary)
1
Current
shareholding
(% of salary)
2
Beneﬁcially
owned
3
LTIP interests
subject to
performance
conditions
Deferred
shares not
subject to
performance
conditions
Vested and
unexercised Unvested Exercised
Executive Directors
G Charlton 200 418 118,126
3
139,735 52,303
4
———Y e s
K Mecklenburgh
5
200 5 79 44,758 2,019
4
———N o
Non-Executive Directors
G Watt n/a n/a 135,007 37,771 78,455 — — — n/a
J Ferguson n/a n/a — n/a n/a n/a n/a n/a n/a
M Prakash n/a n/a — n/a n/a n/a n/a n/a n/a
V Murria n/a n/a 165,397 n/a n/a n/a n/a n/a n/a
L Weedall n/a n/a 1,300 n/a n/a n/a n/a n/a n/a
R Perriss n/a n/a 15,000 n/a n/a n/a n/a n/a n/a
Notes:
1. The Committee has adopted formal shareholding guidelines that encourage the Executive Directors to build up, over a ﬁve-year period, and then
subsequently hold, a shareholding equivalent to at least 200% of base salary. The shareholding requirement is calculated as follows:
− shares owned by the Executive Director (and their associates) count towards the ownership target;
− shares which have vested, but which remain subject to a holding period and/or clawback, count towards the ownership target;
− unvested shares, which are not subject to a further performance condition, count towards the ownership target on a net of tax basis. This includes
deferred awards under the annual bonus plan; and
− unvested awards and unexercised options which have performance conditions attached do not count towards the ownership target.
2. This is based on a closing share price of £16.26 on 31 July 2024 and the year-end salaries of the Executive Directors. The calculation includes the value of
deferred shares not subject toperformance conditions on a net of tax basis, based on the tax rates applicable on 31 July 2024. Values are not calculated
for Non-Executive Directors as they are not subject to executive shareholding requirements.
3. This includes investment in partnership shares under the SIP. Graham purchased 29 partnership shares between the year end and the date of this report
and Katy purchased 30. Neitherofthese post-year end purchases are included above.
4. This is in respect of previous awards of nil-cost options granted under the Deferred Share Bonus Plan.
5. Katy Mecklenburgh was appointed to the Board in June 2023. In line with the shareholding guidelines for Executive Directors, she has a ﬁve-year period
tobuild up hershareholdingtothe target of 200% of salary.
Comparison of overall performance and pay
The graph below shows the value of £100 invested in the Company’s shares since listing compared with the FTSE 250 index.
Thegraph shows thetotal shareholder return generated by both the movement in share value and the reinvestment over the
same period of dividend income.
The Committee considers that the FTSE 250 is the appropriate index because the Company has been a member of this since
theﬁrst review ofthe index since the IPO. This graph has been calculated in accordance with the Regulations. It should be noted
thatthe Company listed on18November 2015 and therefore only has a listed share price for the period of 18 November 2015
to31 July 2024.
800
900
1,000
400
500
600
200
0
£
300
100
700
FTSE 250
Softcat
18/11/2015
18/05/2016
18/11/2016
18/11/2018
18/05/2019
18/11/2019
18/05/2020
18/11/2020
18/05/2021
18/11/2021
18/11/2022
18/05/2023
18/05/2022
18/05/2024
18/11/2023
18/05/2017
18/11/2017
18/05/2018
142 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part B – Annual report on remuneration continued
Chief Executive’s historical remuneration
The table below sets out the relative importance of spend on pay in the 2024 ﬁnancial year. All ﬁgures provided are taken from the
relevant Group accounts.
Chief Executive 2024 2023 2022 2021 2020 2019 2018 2017 2016
G Charlton
Total single ﬁgure
£1,607,879 ————————
G Watt
1
— £1,837,361 £2,867,134 £2,588,093 £991,372 £919,518 £305,539 — —
M Hellawell
1
— — — — — — £532,716 £774,908 £562,117
G Charlton Annual bonus
payment level
achieved
(%ofmaximum
opportunity)
78 ————————
G W
att
1
— 83 96 100 72 100 100 — —
M Hellawell
1
— —————1 0 0 1 0 0 9 9
G Charlton LTIP vesting
levelachieved
(%of maximum
opportunity)
92 ————————
G W
att
1
— 97 100 100 n/a n/a n/a n/a n/a
M Hellawell
1
— — n/a n/a n/a n/a n/a n/a n/a
Note:
1. Martin Hellawell and Graeme Watt retired as Chief Executive on 31 March 2018 and 31 July 2023 respectively.
Relative importance of the spend on pay
The table below sets out the relative importance of spend on pay in the 2024 ﬁnancial year. All ﬁgures provided are taken from the
relevant Group accounts.
Disbursements
from proﬁt in 2024
ﬁnancial year
Disbursements
f
rom proﬁt in 2023
ﬁnancial year
Proﬁt distributed by way of dividend £76.0m £74.2m
Total tax contributions
1
£61.2m £60.6m
Overall spend on pay, including Executive Directors £207.3m £179.9m
Note:
1. Includes corporation tax and employer’s National Insurance contributions. The total tax contributions have been included because of the size of the
contributions in comparison tootherpayments.
143Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Change in the Directors’ remuneration compared with employees
The table below sets out the annual change in Directors’ remuneration from the previous year compared to the average
annualchange inremuneration for all other employees. The notes beneath this table describe how we have calculated the
year-on-year change.
% increase/(decrease) in remuneration in
2020 compared with remuneration in 2019
% increase/(decrease) in remuneration in
2021 compared with remuneration in 2020
Salary or
fees Bonus
1
Beneﬁts
2
Salary or
fees Bonus
1
Beneﬁts
2
Graeme Watt
3
3% 12% 0% 3% 43% 37%
Graham Charlton
3
3% 12% (9)% 3% 43% 37%
Martin Hellawell 3% 0% 1% 0% 0% 1%
Vin Murria
5
23% 0% 0% 4% 0% 0%
R o b y n P e r r i s s 0%0%0% 3%0%0%
Karen Slatford
6
n/a n/a n/a 6% 0% 0%
Lynne Weedall
7
n/a n/a n/a n/a n/a n/a
All employees
9
5% (14)% (14)% 3% 12% 1%
% increase/(decrease) in remuneration in
2022 compared with remuneration in 2021
% increase/(decrease) in remuneration in
2023 compared with remuneration in 2022
% increase/(decrease) in remuneration in
2024 compared with remuneration in 2023
Salary or
fees Bonus
1
Beneﬁts
2
Salary or
fees Bonus
1
Beneﬁts
2
Salary
or fees Bonus
1
Beneﬁts
2
Graeme Watt
3
10% 6% 12% 5% (9)% (1)% (57)% — (5)%
Graham Charlton
3
10% 6% 12% 5% (9)% (1)% 54% 45% (3)%
Katy Mecklenburgh
3,4
n/a n/a n/a n/a n/a n/a 0% (15)% —
Martin Hellawell 5% — — 23% — (1)% n/a n/a n/a
Vin Murria
5
(7)% — — 18% — — 2%——
Robyn Perriss 3% — — 18% — — 2%——
Karen Slatford
6
11% — — 12% — — n/a n/a n/a
Lynne Weedall
7
n/a n/a n/a 42% — — 1 3%——
Mayank Prakash
8
n/a n/a n/a n/a n/a n/a n/a——
Jacqui Ferguson
8
n/a n/a n/a n/a n/a n/a n/a——
All employees
9
5% 7% 34% 8% (44)% (3)% 2% 8% (3)%
Notes:
1. Excludes commissions for employees.
2. Includes private medical insurance only for employees.
3. For the Directors, the percentage change reﬂects the ﬁgures set out in the single ﬁgure table on page 137. Figures are on an annualised basis where the
Director joined or left during the year. The decreases in salary/fees and bonus for Graeme in FY2024 reﬂects a change of his role from Chief Executive
toNon-Executive Chairman from 1 August 2023.
4. Katy Mecklenburgh joined the Board of Softcat in June 2023, however, she did not receive any beneﬁts in FY2023.
5. In respect of 2020/21, Vin Murria stepped down as Chair of the Nomination Committee during the year. Fees receivable for these duties were in addition
to the fees payable as aNon-Executive Director.
6. In respect of 2020/21, Karen Slatford was appointed as Chair of the Nomination Committee during the year. Fees receivable for these duties were in
addition to the fees payable asaNon-Executive Director. Karen stepped down as Chair of the Remuneration Committee during FY20 22. Karen retired
from the Board in January 2023.
7. Lynne Weedall joined the Board of Softcat in May 2022. Following the retirement of Karen Slatford in January 2023, Lynne was appointed interim Senior
Independent Director (‘SID’) and Chairofthe Nomination Committee. Jacqui Ferguson succeeded Lynne as the SID during FY2024.
8. Mayank and Jacqui joined the Board during FY2024.
9. For employees, ﬁgures represent Softcat plc. Details are in respect of the average percentage change in respect of the remuneration of employees on a
full-time equivalent basis. In order to make the comparisons meaningful, the average percentage change in respect of each of salary, bonus and beneﬁts
for employees is a per capita ﬁgure. For FY2024, the increase in bonus is due mostly to improved performance versus targets for senior management
when compared to the prior year. The FY2024 beneﬁts values have ﬂuctuated due to change in premiums.
144 Softcat plc Annual Report and Accounts 2024
Remuneration Committee report continued
Part B – Annual report on remuneration continued
CEO pay ratios
The UK Government requires certain companies with over 250 employees to disclose annually the ratio of their CEO’s single
ﬁgure total remuneration to that of the UK workforce. CEO pay ratio data is presented below for 2024, with comparative ﬁgures
since 2020, which were disclosed in previous Directors’ Remuneration Reports. The data shows how the CEO’s single ﬁgure
remuneration for 2024 (astaken from the single ﬁgure remuneration table) compares to equivalent single ﬁgure remuneration
forfull-time equivalent UK employees, ranked at the 25th, 50th and 75th percentiles.
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2024 Option A 57:1 37:1 21:1
2023 Option A 72:1 44:1 24:1
2022 Option A 100:1 64:1 36:1
2021 Option A 89:1 57:1 32:1
2020 Option A 33:1 21:1 12:1
2019 Option A 35:1 22:1 12:1
The Government’s methodology of Option ‘A’ has been used to calculate the remuneration of 2,472 employees (FY2023: 2,206)
who were employed on the assessment date of 31 July for each respective ﬁnancial year. All individuals in employment at this date
were included in the calculation, with applicable components of individual remuneration annualised for employees not employed
for the full twelve months. This option was selected given as it was considered to be the most efﬁcient and robust approach in
respect of gathering the required data and in particular was considered to be the most accurate way of identifying the best
equivalents of the 25th, 50th and 75th percentiles.
We calculated our total remuneration for full-time equivalent employees to include:
• annual salary and allowances;
• annual bonus earnings (for the period relating to the respective ﬁnancial year);
• gains realised from exercising awards granted under the SIP or LTIP share plans; and
• the value of taxable beneﬁts (including pension contributions).
The increase in ratio after 2020 primarily reﬂects the value of LTIP awards which vested and were exercised by the relevant CEO
during each period. No LTIPs had vested up to 2020.
Pay in respect of the CEO and UK workforce is shown in the table below.
CEO
All employees
(See single ﬁgure table, page 137) 25th percentile Median 75th percentile
2024 salary £567,945 £24,041 £28,387 £39,659
2024 total pay £1,607,879 £28,266 £43,248 £75,835
Consideration by the Directors of matters relating to Directors’ remuneration
The Board has delegated to the Committee, under agreed terms of reference, responsibility for the Remuneration Policy and for
determining speciﬁc packages for the Executive Directors, other selected members of the senior management team and the
Chairman’s fee. The Group consults with key shareholders in respect of the Remuneration Policy and the introduction of new
incentive arrangements.
The terms of reference for the Committee are available on the Group’s website, www.softcat.com/about-us/investor-centre/
governance, and from the Company Secretary at the registered ofﬁce.
Our main responsibilities are:
• to determine and agree with the Board the broad Remuneration Policy for the Executive Directors and other selected
members of the senior management team;
• to review the ongoing appropriateness and relevance of the Remuneration Policy; and
• to review any major changes in employee beneﬁt structures throughout the Group and to administer all aspects of any
share scheme.
The Committee receives assistance from the Company Secretary, who attends meetings. The Chief Executive, the Chief Financial
Ofﬁcer, the Chief People Ofﬁcer and the Head of Reward, Payroll and HR Services attend by invitation and when appropriate.
In setting the Remuneration Policy for Directors, the pay and conditions of other employees of the Group are taken into account,
including any base salary increases awarded and the level of employer pension contribution. During the year, the Committee
received updates on pay and beneﬁts across the general workforce and a wider brieﬁng on external pay trends. The Committee
also reviews and approves the remuneration structure for the management-level tier below the Executive Directors and the
proposed framework for annual pay rises and uses this information to ensure consistency of approach.
145Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
The Group does not use remuneration comparison measurements. A formal employee forum has been established within the business
where staff can raise any issue they feel to be relevant with the Designated Non-Executive Director for Workforce Engagement
(VinMurria). There are also regular employee engagement meetings led by the CEO and CFO. The Non-Executive Directors also
between them annually engage directly with each of the Softcat ofﬁces and report back to the Board following their engagements.
The Committee Chair directly engaged with a small group of employee representatives to explain Softcat’s executive remuneration
policy and how it aligns with wider Group pay policy. During the engagement session, the Committee Chair explained the purpose
and work of the Committee and the key decisions which were made during the year. The employee representatives asked questions
about executive remuneration and how it aligns to pay elsewhere in the Group and also provided feedback on pay in certain other
roles in the business.
Feedback from some employees indicated greater interest in participating in employee share schemes. Softcat already operates
a Share Incentive Plan for all eligible employees and as a result of the employee feedback the Committee has started a further
review on our approach to employee share ownership.
Workforce engagement helps to provide further assurance to the Committee that executive remuneration is considered to be
well aligned with the Group’s wider philosophy on pay, particularly in respect of the importance ofsetting appropriate benchmarks
for ﬁxed pay and on the importance of variable pay as an incentive to drive stretching performance. The Committee believes
there is strong alignment between executive pay, wider workforce pay, the Group’s culture and strategy.
Advisers to the Remuneration Committee
During the ﬁnancial year, PwC advised the Committee on all aspects of the Remuneration Policy for Executive Directors and
selected members of the senior management team. PwC was appointed by the Committee following IPO in November 2015.
TheCommittee issatisﬁed that no conﬂict of interest exists or existed in the provision of these services.
PwC is a member of the Remuneration Consultants Group and the Voluntary Code of Conduct of that body is designed to ensure
objective and independent advice is given to remuneration committees. Fees of £61,500 (excluding VAT) (2023: £77,000) were
provided to PwC during the year in respect of remuneration advice received.
Statement of voting at general meeting
The table below shows the binding vote approving the Directors’ Remuneration Policy at the 2022 AGM and the advisory vote
onthe Annual Report on Remuneration at the 2023 AGM.
Votes for % Votes against % Votes withheld
Directors’ Remuneration Policy (2022 AGM) 169,094,250 98.50 2,569,431 1.50 88
Annual Report on Remuneration (2023 AGM) 170,871,646 96.73 5,781,814 3.27 5,491
Statement of implementation of the Remuneration Policy in FY2024
The Committee has reviewed and considered the key components of remuneration to ensure that the Remuneration Policy
(summarised below) is ﬁt for purpose, continues to drive success within the remuneration framework and meets the shareholder
and governance expectations of a FTSE 250 company. A revised Remuneration Policy was approved by shareholders at the
2022AGM.
Implementation in 2024/25 What was implemented in 2023/24
Base salary For FY2025, base salaries for the CEOandCFO
willbe£584,983 and £381,100 respectively.
This represents an increase of 3% for each ofthe
CEOand CFO, in line with standard increase for
mostof the workforce.
For FY2024, base salaries for the CEO and CFO
were £567,945 and £370,000 respectively.
Pension No change. 5% of salary.
Beneﬁts No change. All Directors, including Non-Executive Directors,
willbe entitled to participate in a salary sacriﬁce
scheme for electric vehicles for personal use
andcommuting.
146 Softcat plc Annual Report and Accounts 2024
Implementation in 2024/25 What was implemented in 2023/24
Annual bonus
plan(‘ABP’)
• Cash
• Deferred
share award
No change. Maximum opportunity: 150% of salary for the
CEO andfor the CFO.
Measures:
• 80% on operating proﬁt. If the Group had
made a corporate acquisition during the year,
operating proﬁt growth would have only been
assessed by the Committee in respect of
the performance of the business during the
ﬁnancial year, excluding the acquisition. In the
event of an acquisition, the Committee would
have re-assessed the setting of the operating
proﬁt targets for the following ﬁnancial year,
toensure they remain relevant and stretching.
• 20% on robust ESG goals.
An element of the ABP is deferred intoashare
award, usually with a three-year vesting period.
LTIP No change. FY2024 LTIP awards:
• 150% of salary for the CEO and for the CFO.
• Measures against TSR (40%) and EPS (60%). If
the Group had made a corporate acquisition
during the vesting period, EPS growth would
have only been assessed in respect of the
performance of the business during the
vesting period, excluding the acquisition. In
the event of an acquisition, the EPS targets for
the grant in respect of the following ﬁnancial
year would have been re-assessed, to ensure
they remain relevant and stretching.
Targets are shown on pages 137 and 138.
Shareholding
requirements
No change. 200% of salary for CEO and for CFO. The
shareholding requirement is calculated as follows:
• shares owned by the Executive Director count
towards the ownership target;
• shares which have vested, but which remain
subject to a holding period and/or clawback,
count towards the ownership target; and
• unvested shares, which are not subject to a
further performance condition, count towards
the ownership target on a net of tax basis.
Thisincludes deferred awards under the ABP.
Chair and
Non-Executive fees
Chairman fee: £238,960
Board fee: £63,654
Senior Independent Director fee: no change
Committee Chair fee (per Committee): nochange.
Lynne Weedall is currently Chair of the Nomination
Committee and will be the Designated Director
forWorkforce Engagement (‘DNED’) following the
retirement from theBoard of Vin Murria in December
2024. Thefee for the DNED will be included aspart
of the role of Chair of the NominationCommittee.
Chair fee: £232,000.
Board fee: £61,800.
Senior Independent Director fee: £13,500.
Committee Chair fee (per Committee): £15,000.
Fee for the Designated Director for Workforce
Engagement (which includes Chair of the
Sustainability Committee): £15,000.
Lynne Weedall
Chair of the Remuneration Committee
23 October 2024
Statement of implementation of the Remuneration Policy in FY2024 continued
Remuneration Committee report continued
Part B – Annual report on remuneration continued
147Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Directors’ report
The following is the report of the Directors of the Company for the ﬁnancial
year ended 31 July 2024.
Non-Financial and Sustainability Information Statement
In accordance with Sections 414CA and 414CB of the Companies Act 2006, the following chart summarises where you can ﬁnd
further information in this Annual Report on each of the key areas of disclosure that these sections require.
Environmental, social and
employee-related matters
• This year we have provided disclosure on Softcat’s environmental commitments, including
reporting on the Climate-related Financial Disclosures (‘CFD’). Our green teams continue
toraise awareness of the importance of environmental issues through theiractivities.
• Our positive and inclusive culture, as well as good employee engagement, is integral to
Softcat’s success. Both the Board and management understand this and a considerable
amount of time is spent ensuring these are maintained.
• We discuss each of these areas in the report on Social Value and in the report on CFD
and Sustainability onpages 52 to 82. This includes the sustainability disclosures required
to comply with the Companies (Strategic Report) (Climate-related Financial Disclosure)
Regulations 2022 (SI 2022/31). Please also seetheGovernance Report on pages 90 to 106.
Human rights and
anti-bribery-related matters
• Human rights abuse and modern slavery risks are not considered a material issue for
the Company.
• We operate anti-bribery, corruption and tax evasion procedures which support compliance
with the UKBribery Act and other legislation.
• We discuss each of these areas in the report on Social Value on pages 52 to 59.
Diversity policy andapproach • We continue to put great importance on the positive beneﬁts that diversity of gender,
ethnicity, experience, background and viewpoints can bring to the business.
• We support numerous initiatives to help improve diversity and inclusion. Progress on these
is monitored by both senior management and the Board. The Board acknowledges there is
more we need to do to improve diversity in areas of our business and we will continue with
our efforts.
• We discuss some of the actions taken in response to employee engagement in the Section
172 Statement on pages 42 to 49 of this report, and our approach to diversity in the report
on Social Value on pages 52 to 59, in the Chairman’s Statement on pages 8 to 11 and in the
Nomination Committee Report on pages 117 to 122.
Business model, policies,
principal risks and KPIs
• We operate a business model which includes non-ﬁnancial inputs and outputs. Our business
model is underpinned by our straightforward strategy.
• Risks, including ﬁnancial and non-ﬁnancial risks, are monitored by management and by
the Audit Committee. The Audit Committee also considers the key internal controls for
the business.
• The Board regularly reviews both ﬁnancial and non-ﬁnancial KPIs, which are relevant for
monitoring the performance of the business and have a clear link to delivering against our
strategy. We disclose performance against our key KPIs.
• We discuss our business model on pages 22 and 23 and key risks on pages 83 to 88 and
selected KPIs are reported on pages 36 and 37. Our strategy is discussed in various places
inthe Strategic Report, including pages 30 to 35.
Directors’ Report
The Directors present their report for the year to 31 July 2024.
Softcat plc is a public company limited by shares, incorporated in England and Wales, and its shares are traded on the equity
shares (commercial companies) segment of the Main Market of the London Stock Exchange.
148 Softcat plc Annual Report and Accounts 2024
Directors’ report continued
Disclosures incorporated by reference
For the purposes of compliance with Disclosure Guidance and Transparency Rules (‘DTR’) DTR 4.1.5 R (2) and DTR 4.1.8 R, the
required content of the ‘Management Report’ can be found in the Strategic Report and this Directors’ Report. The following
disclosures required to be included in this Directors’ Report have been incorporated by way of reference to other sections of
thisreport and should be read in conjunction with this report:
• Corporate Governance Statement – refer to page 92 of this report;
• statement explaining how the Directors have had regard to the need to foster the Group’s business relationships with
suppliers, customers and others, and the effect of that regard, including on the principal decisions taken by the Group during
the ﬁnancial year – refer to pages 42 to 49 of this report;
• strategy and relevant future developments – refer to pages 24 to 29 and pages 30 to 35 of the Strategic Report; and
• ﬁnancial risk management objectives and policies – refer to the ‘Risk management’ section included in the Strategic Report
onpages 83 to 88 and note 21 to the ﬁnancial statements.
The information in respect of the Non-Financial Reporting Directive appearing in this Directors’ Report is also incorporated
byreference as required in the Strategic Report.
Directors of the Company
The following Directors have held ofﬁce since 1 August 2023:
Name Position Date of appointment
G Watt Chairman Appointed as Chief Executive on 1 April 2018 and
Chairmanon1August2023
G Charlton Chief Executive Appointed Chief Financial Ofﬁcer on 19 March 2015 and
ChiefExecutive on1 August 2023
K Mecklenburgh Chief Financial Ofﬁcer Appointed 19 June 2023
V Murria Independent Non-Executive Director Appointed 3 November 2015
R Perriss Independent Non-Executive Director Appointed 1 July 2019
L Weedall Independent Non-Executive Director Appointed 3 May 2022
M Prakash Independent Non-Executive Director Appointed 1 September 2023
J Ferguson Independent Non-Executive Director Appointed 1 January 2024
Biographies of the Directors as at 23 October 2024 can be found on pages 94 and 95.
Powers of Directors
The general powers of the Directors are contained within UK legislation and the Company’s Articles of Association (the ‘Article s’).
The Directors are entitled to exercise all powers of the Company, subject to any limitations imposed by the Articles or
applicablelegislation.
Directors’ interests
The interests of the Directors in the issued shares of the Company at 31 July 2024 are disclosed in the Remuneration Report on
page 141. The Remuneration Report also sets out details of any changes in those interests between the year end and up to the
date of this report.
No Director had a material interest in any contract of signiﬁcance with the Group at any time during the ﬁnancial year.
Appointment and replacement of Directors
The rules about the appointment and replacement of Directors are contained in the Articles. They provide that Directors may
beappointed by ordinary resolution of the members or by a resolution of the Directors. Any Director so appointed must retire
and put themselves forward for election at the next Annual General Meeting (‘AGM’). Directors wishing to continue to serve as
members of the Board will seek re-election annually in accordance with the UK Corporate Governance Code (the ‘Code’).
In accordance with the Code, at the 2024 AGM, with the exception of Vin Murria (see page 118), all Directors that are eligible
willstand for election or re-election.
Indemniﬁcation of Directors
The Directors have the beneﬁt of an indemnity provision contained in the Articles. The provision was in force during the year
ended 31July 2024 and remains in force and relates to certain losses and liabilities which the Directors may incur to third parties
in the course of acting as Directors of the Company. In addition, Directors and ofﬁcers of the Company and its subsidiaries are
covered by directors’ and ofﬁcers’ liability insurance.
149Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Compensation for loss
ofofﬁce and change
ofcontrol
There are no agreements in place
withany Director that would provide
compensation for loss of ofﬁce or
employment resulting from a change
ofcontrol. Change of control provisions
for the Group’s share plans may cause
options and awards granted undersuch
plans to vest on a takeover.
The Company is not party to any other
signiﬁcant agreements that take effect
after, or terminate upon, a change
ofcontrol.
Articles of Association
The Articles may be amended by a
special resolution of the members.
AttheAGM held on 12 November 2015,
shareholders approved by special
resolution the amended Articles which
took effect at the date of the initial public
offering (‘IPO’) on 18November 2015.
Share capital and control
The Company’s ordinary issued share
capital as at 31 July 2024 was
199,764,461 ordinary shares of 0.05p
each, which have a listing on the equity
shares (commercial companies) segment
of the Main Market on the London Stock
Exchange. The ordinary share class
represents over 99.9% of the Company’s
total issued share capital.
In addition to the ordinary shares, the
Company also has a class of 18,933
deferred shares which were created
following the share capital reorganisation
at IPO and which are not admitted
totrading on a regulated market.
Shares acquired through the Group’s
share schemes and plans rank equally
with the other shares in issue and have
no special rights. The Group has a Share
Incentive Plan Trust (‘SIPTrust’) for the
beneﬁt of employees of the Group. As at
31 July 2024, the SIP Trust held 133,538
shares (2023: 159,996) awarded to
employees as part of the freeshare
award, subject to service conditions.
Afurther 369,513 shares (2023:368,545)
were held on behalf of employees who
have taken part in the Group’s voluntary
partnership share purchase programme.
The SIP Trust alsoheld 51,041
unallocated shares (2023: 51,041).
During the year ended 31 July 2024,
share options were exercised pursuant
to the Long Term Incentive Plan and the
Annual and Deferred Bonus Plan, resulting
in the additional listing and allotment of
244,109 new ordinary shares.
Holders of ordinary shares are entitled
to attend and speak at general meetings
of the Company, and to appoint one or
more proxies and, if they are corporations,
corporate representatives who are entitled
to attend general meetings and to
exercise voting rights.
The deferred shares carry no voting
rights or rights to receive any of the
proﬁts of the Group available for
distribution byway of dividend or
otherwise. On a return of capital on a
winding up of the Group (but not
otherwise), the holder is entitled only to
the repayment of the amount paid up on
that share after payment of the capital
paid up on each other share in the
capital of the Company and the further
payment of £10,000,000 on each such
share. The deferred shares represent less
than 0.01% of the Company’s total issued
share capital.
Further information on the Company’s
issued share capital can be found in note
17 to the ﬁnancial statements.
The Company passed the following
resolutions on 13December 2023:
• an ordinary resolution providing the
Directors with authority to:
(i) allot ordinary shares up to a
maximum nominal amount of
£33,259, to be reduced by the
nominal amount allotted or
granted under paragraph (ii)
below in excess of such sum; and
(ii) allot ordinary shares up to a
maximum nominal amount of
£66,519 in connection with a
pre-emptive offer by way of a
rights issue, such amount to be
reduced by any allotments made
under paragraph (i) above;
• special resolutions providing the
Directors with authority to:
(i) allot shares or sell treasury
sharesfor cash up to a maximum
nominal amount of £9,977
(withadditional authority for the
purposes of making a follow-on
offer up to an additional
aggregate amount equal to
20%of any allotment under
theresolution); and
(ii) allot shares or sell treasury shares
forcash up to a maximum nominal
amount of £9,977 (with additional
authority for the purposes of
making a follow-on offer up to
anadditional aggregate amount
equal to 20% of any allotment
under the resolution), in connection
with an acquisition or other
capital investment;
• otherwise than to existing
shareholders pro-rata to their
shareholding; and
• a special resolution providing the
Directors with authority to make
market purchases of up to 19,955,759
of the Company’s ordinary shares.
These authorities are due to expire
attheCompany’s AGM to be held on
9December 2024 and proposals for the
renewal of the authority to allot ordinary
shares and to make market purchases
ofthe Company’s own ordinary shares
areset out in the Notice of the Annual
General Meeting. The Directors have
nocurrent intention of exercising the
authority in respect of the purchase
ofthe Company’s own shares, which
issought in the best interests of
shareholders to allow the ﬂexibility
toreact promptly where such market
purchases may be desirable.
There are no restrictions on the transfer
or limitations on the holding of ordinary
shares and no requirements to obtain
approval prior to any transfers other
than: certain restrictions which may from
time to time be imposed by laws and
regulations (for example, insider trading
laws); pursuant to the Market Abuse
Regulation and the Company’s own
ruleswhereby Directors and certain
employees of the Company require the
approval of the Company to deal in the
ordinary shares; and pursuant to the
Articles where there is default in
supplying the Company with information
concerning interests in the Company’s
ordinary shares. There are no special
control rights in relation to the
Company’s ordinary shares.
There are no agreements between
holders of securities that are known
tothe Company which may result in
restrictions on the transfer of securities
or on voting rights.
150 Softcat plc Annual Report and Accounts 2024
Directors’ report continued
Substantial shareholders
The substantial shareholdings in the table below represent those interests notiﬁed to the Company as at 31 July 2024 in accordance
with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, and those holdings may have changed
since notiﬁcation to the Company.
As at 31 July 2024 As at 23 October 2024
Ordinary
sha
res
Voting
rights
O
rdinary
shares
Voting
rights
Peter Kelly
1
64,976,058 32.5% 64,976,058 32.5%
Capital Group 10,787,251 5.4% 10,787,251 5.4%
Mawer Investment Management Limited 9,946,370 5.0% 9,946,370 5.0%
GIC
7,123, 496 3.6% 7,920,261 4.0 %
Note:
1. The ordinary shares held by Peter Kelly include shares held beneﬁcially via various entities or connected persons.
Principal shareholder and
RelationshipAgreement
Set out below is a statement describing
the Relationship Agreement entered into
by Softcat plc with its principal shareholder
(the ‘Relationship Agreement’). As at 23
October 2024, Peter Kelly, the founder
ofSoftcat plc, held 32.5% of the issued
ordinary share capital of the Company.
On 13 November 2015, Softcat plc and
Peter Kelly entered into the Relationship
Agreement. The principal purpose of the
Relationship Agreement is to ensure that
the Group will be capable of carrying on
its business independently of Peter Kelly
and certain persons deemed to be
connected with him (‘Connected Persons’).
Pursuant to the Relationship Agreement,
Peter Kelly, inter alia:
• shall procure that all transactions,
agreements or arrangements
entered into between the Group and
Peter Kelly (or any of his Connected
Persons) are conducted on an
arm’s length basis and on normal
commercial terms. Peter Kelly shall
abstain from voting on any resolution
relating to a transaction with
PeterKelly (or any of his Connected
Persons) as the related party; and
• shall (and shall procure that each
of his Connected Persons shall)
(i) not take any actions that would
reasonably be expected to have the
effect of preventing the Group from
complying with its obligations under
the Listing Rules or be prejudicial
to the Group’s status as a listed
company or the Group’s eligibility for
listing; (ii) not propose or procure the
proposal of a shareholder resolution
that would circumvent or appear to
circumvent the proper application
of the Listing Rules; and (iii) not
exercise his voting rights or other
rights to procure any amendment
to the Articles which would be
contrary to the maintenance
of the Group’s independence,
including its ability to operate and
make decisions independently
from Peter Kelly, or otherwise
inconsistent with the provisions
oftheRelationshipAgreement.
Furthermore, it is agreed that for so long
as Peter Kelly (together with any of his
Connected Persons) holds 10% of the
issued share capital in Softcat plc, he
shall be entitled to appoint one Non-
Executive Director, although no such
Director has been appointed as atthe
date of this AnnualReport.
The Relationship Agreement will remain
in effect for so long as: (a)Peter Kelly
(and/or any of his Connected Persons)
holds at least 10% of the issued share
capital; and (b) the ordinary shares are
admitted to the equity shares
(commercial company) segment of
theOfﬁcial List maintained by the
Financial Conduct Authority.
The Group has and, in so far as it is
aware, Peter Kelly and his Connected
Persons have complied with the
independence provisions set out in
theRelationship Agreement from the
date ofthe agreement.
Risk regarding
ﬁnancialinstruments
The ﬁnancial risk management
objectives and policies are disclosed
innote 21 to the ﬁnancial statements.
Research and development
The Group did not carry out any research
and development activities during the
2024 ﬁnancial year (2023: £Nil).
Political donations
The Company did not make any political
donations during the 2024 ﬁnancial year
(2023: £Nil).
A resolution to authorise the Company
to make political payments up to an
aggregate amount of £100,000 has been
included for shareholder consideration
in the Notice of AGM for 2024. The
Group does not intend to make any
payments to political organisations
ortoincur other political expenditure;
however, this resolution has been
proposed to ensure there is authority
under the wide deﬁnition used in the
Companies Act 2006 of matters
constituting political donations.
Greenhouse gas emissions
and energyconsumption
Information relating to the following
isdetailed in the report on CFD and
Sustainability, on pages 60 to 82 of the
Strategic Report:
• greenhouse gas emissions; and
• energy consumption and
energyefﬁciency.
Corporate social
responsibility
Details on our commitment to corporate
social responsibility can be found in the
report on Social Value on pages 52 to 59
ofthe Strategic Report.
151Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Equality and diversity
The Group operates an equal
opportunities policy which endeavours
to treat individuals fairly and not to
discriminate on thebasis of gender,
disability, race, national or ethnic origin,
sexual orientation or marital status.
Applications for employment are fully
considered on their merits, and
employees are given appropriate
training and equal opportunities for
career development andpromotion.
The Group is committed to ensuring that
adequate policies and procedures are
inplace to enable disabled applicants to
receive training to perform safely and
effectively and to provide development
opportunities to ensure they reach
theirfull potential. Where an individual
becomes disabled during their
employment, we will seek to provide,
wherever possible, continued employment
on normal terms and conditions.
Adjustments will be made to the
environment and duties or, alternatively,
suitable new roles within the business
will be secured with additional training
where necessary.
Details of the Group’s gender and
ethnicity breakdown are given in the
report on Social Value on page 52.
We place considerable value on the
involvement ofemployees and continue
to keep them informed on matters
affecting them as employees. This is
undertaken through a variety of
methods including, but not limited to,
regular meetings, team brieﬁngs, emails
and theintranet. Vin Murria serves as the
Designated Non-Executive Director for
Workforce Engagement. Vin retires from
the Board on 9 December 2024 and
Lynne Weedall will succeed Vin as the
Designated Non-Executive Director
forWorkforce Engagement.
At team meetings, managers are
responsible for ensuring that information
sharing, discussion and feedback take
place on a regular basis. As a result of
these meetings, management can
communicate the ﬁnancial and economic
factors affecting the business and
ensure that the views of employees are
taken into account in Group decisions
which are likely to affect theirinterests.
Post-balance sheet events
Dividend
The Board recommends a ﬁnal
ordinarydividend of 18.1p per
ordinaryshare and a special dividend
of20.9p per ordinary share to be paid on
17December 2024 to all ordinary
shareholders who were on the
registerofmembers at the close
ofbusiness on 8November 2024.
Shareholders will be asked to approve
the ﬁnal and special dividends at the
AGM on 9December 2024.
The Group’s dividend and distributions
policy is detailed in theGovernance
Report on page 103.
Requirements of the Listing Rules
The following table provides references to where the information required by Listing Rule 6.6.1R is disclosed:
Listing Rule requirement Location in Annual Report
A statement of the amount of interest capitalised during the period under review and details
ofany related tax relief.
Not applicable
Information required in relation to the publication of unaudited ﬁnancial information. Not applicable
Details of any long-term incentive schemes and Directors’ interests. Directors’ Remuneration Report,
pages 125 to 146
Details of any arrangements under which a Director has waived emoluments, or agreed
towaiveany future emoluments, from the Group.
Directors’ Remuneration Report,
pages 125 to 146
Details of any non-pre-emptive issues of equity for cash. Directors’ Report, page 149
Details of any non-pre-emptive issues of equity for cash by any unlisted major
subsidiaryundertaking.
No such share allotments
Details of parent participation in a placing by a listed subsidiary. Not applicable
Details of any contract of signiﬁcance in which a Director is or was materially interested. Not applicable
Details of any contract of signiﬁcance between the Company (or one of its subsidiaries)
and a controlling shareholder.
Not applicable
Details of waiver of dividends by a shareholder. Not applicable
152 Softcat plc Annual Report and Accounts 2024
Directors’ report continued
Auditor
Ernst & Young LLP (‘EY’) has signiﬁed its
willingness to continue in ofﬁce as auditor
and the Group is satisﬁed that EY is
independent and that there are adequate
safeguards in place to safeguard its
objectivity. A resolution to reappoint EY
as the auditor will be proposed at the
2024 AGM.
Subsidiaries and branches
The Group operates two subsidiary
companies in the United States of America
and also has branches in Australia, the
United States of America, the Netherlands,
Singapore, Hong Kong and Ireland.
Going concern
The Group and Company ﬁnancial
statements have been prepared on a
going concern basis. The Directors’
assessment is based on detailed trading
and cash ﬂow forecasts, using the same
assumptions and methods as the
viability assessment.
The going concern assessment covers at
least the 12-month period from the date
of the signing of the ﬁnancial statements,
and the going concern basis is dependent
on the Group maintaining adequate levels
of resources to operate during the period.
To support this assessment, detailed
trading and cash ﬂow forecasts were
prepared for the 15-month period to
31October 2025. Based on the going
concern assessment (which is provided
in note 1.2 of the ﬁnancial statements),
the Directors have a reasonable
expectation that the Group has adequate
resources to continue in operational
existence for at least 12 months from
thedate of approval of these ﬁnancial
statements. For this reason, they continue
to adopt the going concern basis in
preparing the ﬁnancial statements.
Disclosure of information
to the auditor
The Directors in ofﬁce at the time of
approval of the Directors’ Report are
listed on pages 94 and 95 and have each
conﬁrmedthat:
• so far as he or she is aware, there is
no relevant audit information of which
the Group’s auditor is unaware; and
• he or she has taken all the steps that he
or she ought to have taken as a Director
to make himself or herself aware of any
such relevant audit information and to
establish that the auditor isaware of
that information.
This conﬁrmation is given and should
beinterpreted in accordance with the
provisions of Section 418 of the
Companies Act 2006.
2024 Annual
GeneralMeeting
The Company’s 2024 AGM will take
place on 9 December 2024 at the
Company’s registered ofﬁce:
Softcatplc,Fieldhouse Lane,
Marlow,Buckinghamshire SL7 1LW.
The Chairman of the AGM intends for a
poll to be called in respect of each of the
resolutions to be voted on at the AGM. In
the event of a show of hands every
holder of ordinary shares who ispresent
in person or by proxy at a general
meeting has one vote on each resolution
and, on a poll, every holder ofordinary
shares who is present in person or by
proxy has one vote on each resolution
for every ordinary share of which he/she
is the registered holder. The Notice
ofAGM speciﬁes deadlines for
exercising voting rights. TheNotice of
AGM can be found in the Investor Centre
section of the Group’s website, www.
softcat.com, and is being posted at the
same time as this Annual Report. The
Notice ofAGM sets out the business of
the meeting and provides explanatory
notes on all resolutions. Separate
resolutions areproposed inrespect
ofeach substantive issue.
A holder of ordinary shares may usually
vote personally or byproxy at a general
meeting. Any form of proxy must be
delivered to the Company not less than
48 hours before the time appointed for
holding the meeting or adjourned
meeting at which the person named
inthe appointment proposes to vote
(forthis purpose, the Directors may
specify that no account shall be taken
ofany part ofa day that is not a working
day). A corporation which is a holder
ofordinary shares in the Company
mayauthorise such persons as it thinks
ﬁt toact as itsrepresentatives at a
generalmeeting.
No holder of ordinary shares shall
beentitled to attend or vote, either
personally or by proxy, at a general
meeting in respect of any ordinary share
if any call or other sum presently payable
to the Company in respect of such
ordinary share remains unpaid or in
certain other circumstances speciﬁed
inthe Articles where there is default in
supplying the Company with information
concerning interests in the Company’s
ordinary shares. The results of each of
the resolutions to be voted on at the
2024 AGM will be published to the
London Stock Exchange and will be
available on the Group’s website.
The AGM is the principal forum for
communication with private shareholders
and the Directors recognise its important
role. The Chairman of the Board and the
Chairs of the Committees, together with
the other Directors, will beavailable to
answer shareholders’ questions at the
meeting. Additionally, shareholders will
be given the opportunity to submit
questions via email to the Directors
aheadof the meeting. Questions may
besubmitted to cosec@softcat.com
orby letter addressed to the Company
Secretary at the registered ofﬁce.
Questions should bereceived up to
24hours in advance of the meeting and
aresponse will be provided. Further
information and requirements can be
found within the Notice of AGM.
153Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Statement of Directors’
responsibilities in relation
to the ﬁnancial statements
The Directors are responsible for
preparing the Annual Report andthe
ﬁnancial statements in accordance
withapplicable UnitedKingdom law
andregulations.
Company law requires the Directors to
prepare ﬁnancial statements for each
ﬁnancial year. Under that law the Directors
have elected to prepare the Group’s
ﬁnancial statements inaccordance with
UK-adopted International Accounting
Standards (‘IFRSs’). Under company law
the Directors must not approve the
ﬁnancial statements unless they are
satisﬁed that they give a true and fair
view of the state of affairs of the Group
and of the proﬁt or loss of the Group for
that period.
In preparing these ﬁnancial statements
the Directors are required to:
• select suitable accounting policies
in accordance with IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors and then apply
them consistently;
• make judgements and accounting
estimates that are reasonable
and prudent;
• present information, including
accounting policies, in a
manner that provides relevant,
reliable, comparable and
understandableinformation;
• provide additional disclosures
when compliance with the speciﬁc
requirements in IFRSs is insufﬁcient
to enable users to understand the
impact of particular transactions,
other events and conditions on
the Group’s ﬁnancial position and
ﬁnancial performance;
• state that UK-adopted International
Accounting Standards have been
followed, subject to any material
departures disclosed and explained
in the ﬁnancial statements; and
• prepare the ﬁnancial statements on
the going concern basis unless it is
inappropriate to presume that the
Group will continue in business.
The Directors are responsible for
keeping adequate accounting records
that are sufﬁcient to show and explain
the Group’s transactions and disclose
with reasonable accuracy atany time
theﬁnancial position of the Group and
enable them toensure that the Group
ﬁnancial statements comply with the
Companies Act 2006. They are also
responsible for safeguarding the assets
of the Group and hence fortaking
reasonable steps for the prevention and
detection of fraud andother irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report
and Corporate Governance Statement
that comply with that law and those
regulations. TheDirectors are responsible
for the maintenance and integrity of
thecorporate and ﬁnancial information
included onthe Group’s website.
Fair and balanced reporting
Having taken advice from the Audit
Committee, the Board considers that
theAnnual Report and Accounts,
takenas awhole, is fair, balanced and
understandable and that it provides the
information necessary for shareholders
to assess the Group’s position and
performance, business model
andstrategy.
Responsibility statement
pursuant to FCA’s Disclosure
Guidance andTransparency
Rule 4 (‘DTR4’)
Each Director of Softcat plc (whose
names and functions appear on pages
94 and 95) conﬁrms that (solely for the
purpose of DTR 4) to the best of his or
her knowledge:
• the ﬁnancial statements, prepared
in accordance with UK-adopted
International Accounting Standards
give a true and fair view of the assets,
liabilities, ﬁnancial position and proﬁt
ofthe Group;
• the Annual Report, including
the Strategic Report, includes a
fairreview of the development and
performance of the business and the
position of the Group, together with a
description ofthe principal risks and
uncertainties that they face; and
• they consider the Annual Report and
Accounts, taken as a whole, is fair,
balanced and understandable and
provides the information necessary
for shareholders to assess the
Group’s position, performance,
business model and strategy.
The responsibility statement has been
approved by the Board ofDirectors and
is signed on its behalf by:
Graham Charlton
Chief Executive Ofﬁcer
23 October 2024
Katy Mecklenburgh
Chief Financial Ofﬁcer
23 October 2024
The Directors’ Report has been
approved by the Board of Directors
andis signed on its behalf by:
Luke Thomas
Company Secretary
23 October 2024
154 Softcat plc Annual Report and Accounts 2024
Independent auditor’s report
To the members of Softcat plc
Opinion
In our opinion:
• Softcat plc’s Group ﬁnancial statements and parent company ﬁnancial statements (the ‘ﬁnancial statements’) give a true and
fair view of the state of the Group’s and of the parent company’s affairs as at 31 July 2024 and of the Group’s proﬁt for the y ear
then ended;
• the Group ﬁnancial statements have been properly prepared in accordance with UK-adopted International Accounting
Standards (‘IFRS’);
• the parent company ﬁnancial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the ﬁnancial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the ﬁnancial statements of Softcat plc (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year e nded
31 July 2024 which comprise:
Group Parent company
Consolidated statement of ﬁnancial position as at 31 July 2024 Company statement of ﬁnancial position as at 31 July 2024
C
onsolidated statement of proﬁt and loss and other
comprehensive income for the year then ended
Company statement of changes in equity for the year then ended
Consolidated statement of changes in equity for the year
thenended
Related notes A to U to the ﬁnancial statements including
material accounting policy information
Consolidated statement of cash ﬂows for the year then ended
Related notes 1 to 27 to the ﬁnancial statements, including
material accounting policy information
The ﬁnancial reporting framework that has been applied in the preparation of the Group ﬁnancial statements is applicable law
and UK-adopted International Accounting Standards. The ﬁnancial reporting framework that has been applied in the preparation
of the parent company ﬁnancial statements is applicable law and United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK’)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the ﬁnancial st atements
section of our report. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group and parent in accordance with the ethical requirements that are relevant to our audit of the
ﬁnancial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulﬁlled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent company and
weremain independent of the Group and the parent company in conducting the audit.
155Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Conclusions relating to going concern
In auditing the ﬁnancial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the ﬁnancial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and parent
company’s ability to continue to adopt the going concern basis of accounting included:
• understanding management’s process and controls related to the assessment of going concern;
• checking the arithmetical accuracy of the cash ﬂow forecast models and assessing the Group’s historical forecasting accuracy;
• obtaining management’s going concern models which included a base case (testing for consistency with the Board-approved
three-year plan), a severe yet plausible downside cash ﬂow scenario and a reverse stress test covering the going concern
assessment period. These forecasts include an assessment of available cash balances given the Group has no external
debtarrangements as well as understanding how the impact of the ongoing macro-economic uncertainty has been reﬂected
in the forecasts;
• considering the downside scenarios, including the reverse stress case, identiﬁed by management, independently assessing
whether there are any other scenarios which should be considered, and assessing the quantum of the impact on the available
cash ﬂows of the downside scenarios in the going concern period;
• challenging management’s assumptions within the cash ﬂow forecasts in relation to the forecast revenue growth rates,
operating cost inﬂation and working capital in the going concern period, including searching for sources of contradictory
evidence in our assessment of management’s forecasting, such as assessing historical budgeting accuracy and comparing the
forecast with analyst expectations and other external data sources. Due to uncertainty in the economy, we have focused our work
on further sensitivities to the severe but plausible scenario and whether the reverse stress test scenario is considered remote;
• assessing the reasonableness of management’s potential mitigating actions, principally the removal of forecast,
undeclareddividends;
• assessing whether there are any material climate-related risks that should be incorporated into Softcat’s forecasts to 30
October 2025;
• assessing the adequacy of the going concern assessment period until 30 October 2025, considering whether any events or
conditions foreseeable after the period indicated a longer review period would be appropriate;
• enquiring of management as to their knowledge of events or conditions beyond the period of their assessment that may cast
signiﬁcant doubt on the entity’s ability to continue as a going concern;
• comparing management’s forecasts to actual results through the subsequent events period and performing enquiries to the
date of this report; and
• assessing if the going concern disclosures in the ﬁnancial statements are appropriate and in accordance with the revised ISA
(UK) 570 Going Concern standard.
Our key observations
• The Directors’ assessment is that Softcat plc has sufﬁcient liquidity and headroom in cash throughout the going concern period
to 30 October 2025. Management’s severe but plausible scenario demonstrated that a worsening of all key assumptions against
the base case would not result in liquidity concerns. This is prior to further potential mitigations modelled by management.
The changes in assumptions modelled are considered to be highly unlikely based on historical ﬁnancial performance.
• We have not identiﬁed any material climate-related risks that should be incorporated into Softcat plc’s forecasts to
30October 2025.
Based on the work we have performed, we have not identiﬁed any material uncertainties relating to events or conditions that,
individually or collectively, may cast signiﬁcant doubt on the Group and parent company’s ability to continue as a going concern
for a period to 30 October 2025.
In relation to the Group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the ﬁnancial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s ability to continue as a going concern.
156 Softcat plc Annual Report and Accounts 2024
Independent auditor’s report continued
To the members of Softcat plc
Overview of our audit approach
Key audit matters • Overstatement of results through the misstatement of revenue recognised at or near year end
• Presentation of revenue in respect of principal versus agent
• Misstatement of rebate income to overstate reported results at or near year end
Materiality • Overall Group materiality of £7.9m which represents 5% of proﬁt before tax
An overview of the scope of the parent company and Group audits
Tailoring the scope
Softcat plc has prepared consolidated accounts for the ﬁrst time for the ﬁnancial year ended 31 July 2024, following the
commencement of trade of Softcat US LLC.
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit
scope for each company within the Group. Taken together, this enables us to form an opinion on the consolidated ﬁnancial
statements. We take into account size, risk proﬁle, the organisation of the Group and effectiveness of Group-wide controls,
changes in the business environment, the potential impact of climate change and other factors such as recent internal audit
results when assessing the level of work to be performed at each company.
The Group’s operations are primarily based in the United Kingdom with a single head ofﬁce and ﬁnance function and therefore
allaudit procedures are completed by one audit team at this location.
In assessing the risk of material misstatement to the Group ﬁnancial statements, and to ensure we had adequate quantitative
coverage of signiﬁcant accounts in the ﬁnancial statements’ we performed full scope audit procedures over 100% of the Group’s
proﬁt before tax for the year ended 31 July 2024 and 100% of the Group’s total assets at that date. We obtained an understanding
ofthe entity-level controls of the Group which assisted us in identifying and assessing risks of material misstatement due to fraud
or error, as well as assisting us in determining the most appropriate audit strategy.
Climate change
Stakeholders are increasingly interested in how climate change will impact the Group. The Group has determined that the most
signiﬁcant future impacts from climate change on their operations will be from business interruption driven by extreme climate or
failure to evolve technology product offerings in line with consumer and investor demands. These are explained on pages 70 to
76 in the required Task Force on Climate related Financial Disclosures and on pages 86 to 88 in the principal risks and
uncertainties. It has also explained its climate commitments on pages 77 and 78. All of these disclosures form part of the ‘Other
information,’ rather than the audited ﬁnancial statements. Our procedures on these unaudited disclosures therefore consisted
solely of considering whether they are materially inconsistent with the ﬁnancial statements or our knowledge obtained in the
course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on ‘Other information’.
In planning and performing our audit, we assessed the potential impacts of climate change on the Group’s business and any
consequential material impact on its ﬁnancial statements.
The Group has explained in note 1, the basis of preparation, how it has reﬂected the impact of climate change in its ﬁnancial
statements, including how this aligns with its commitment to the aspirations of the Paris Agreement to achieve net zero emissions
by 2050. There are no signiﬁcant judgements or estimates relating to climate change in the notes to the ﬁnancial statements.
Our audit effort in considering the impact of climate change on the ﬁnancial statements was focused on evaluating management’s
assessment of the impact of climate risk, physical and transition, their climate commitments and the effects of material climate
risks disclosed on pages 70 to 76. As part of this evaluation, we performed our own risk assessment ,supported by our climate
change internal specialists, to determine the risks of material misstatement in the ﬁnancial statements from climate change which
needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and
associated disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are
described above.
Based on our work, we have not identiﬁed the impact of climate change on the ﬁnancial statements to be a key audit matter
ortoimpact a key audit matter.
157Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our audit of the ﬁnancial
statements of the current period and include the most signiﬁcant assessed risks of material misstatement (whether or not due to
fraud) that we identiﬁed. These matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit and directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the ﬁnancial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Overstatement of performance through the misstatement of revenue recognised at or near year end
During the year the Group recognised revenue of £962.6m (2023: £985.3m).
Refer to the Audit Committee Report (pages 107 to 116); accounting policies (pages 166 to 176); and note 2 of the Group ﬁnancia l
statements (pages 176 and 177).
Management’s process for accounting for certain revenue transactions, particularly the review process at year end to record
revenue in the appropriate period, is mostly manual and therefore susceptible to error (either deliberate or without intent).
Theaccounting is made more challenging due to the reliance on suppliers to notify the Group of delivery, and for
internationalshipments which results in a longer delivery lead time needing to be built into the assumptions utilised
bymanagement. There isa risk that revenue is recognised prematurely or ﬁctitiously.
Our response to the risk Key observations communicated to the Audit Committee
We performed the following procedures:
• Performed walkthroughs to update our understanding of the
revenue recognition processes and key controls.
• Updated our understanding of management’s cut off assessment,
including the delivery lead time assumptions utilised, which we
validated to historical averages.
• Tested revenue cut off by obtaining management’s sales cut off
assessment and independently testing a sample of transactions
therein by vouching to invoices and proof of delivery.
• Tested unbilled receivables by obtaining management’s analysis
and independently testing a sample of transactions therein by
vouching to invoices and proof of delivery.
• Tested an independent sample of transactions invoiced in the two
weeks either side of the year end. We stratiﬁed the population
between revenue type and selected our sample based on the
following criteria:
− key items based on a quantitative threshold or speciﬁc
qualitative factors and
− statistical sample of items invoiced within the seven days prior to
the balance sheet date, which we considered to be of higher risk
based on average delivery lead times.
• We tested our sample by vouching to invoices and proof of delivery,
to conﬁrm these had been recorded in the correct period.
• To address the risk of management override, we tested a sample
of journal entries recorded at or near year end as well as top-side
adjustments by verifying to appropriate supporting documentation
in order to verify that the entry is supported by an appropriate
business rationale and authorisation and has been accounted
forcorrectly.
• Tested a statistical sample of sales transactions deferred at the
year end. We recalculated the split of revenue recognised and
the deferred elements based on a review of the supporting
documentation to obtain assurance over the recognition of
revenue. We also selected a sample of invoices from billing data
and assessed whether the revenue was appropriately recognised
ordeferred, based on completion of the performance obligation.
• Analysed sales-related journal entry data to track sales from
revenue through to accounts receivable through to cash collection
using data analytics tools. We used this analysis to validate the
appropriateness of transaction ﬂows and tested a sample of
transactions to determine if the journals accurately reﬂected the
substance of transactions recorded.
• Assessed appropriateness of disclosures in the Annual Report and
Accounts by comparing the disclosures against the requirements
under IFRS.
We concluded that the revenue recognised at or near
year end was properly accounted for and that revenue
has appropriately been recognised in accordance
withIFRS.
We concluded that management’s disclosures in relation
to revenue, including disclosed accounting policies and
those relating to critical accounting judgements,
areappropriate.
As part of our procedures, we noted no indication of
deliberate or other manipulation of revenue cut-off
ormanagement override.
158 Softcat plc Annual Report and Accounts 2024
Independent auditor’s report continued
To the members of Softcat plc
Key audit matters continued
Presentation of revenue in respect of principal versus agent
During the year, the Group recognised revenue of £962.6m (2023: £985.3m).
Re
fer to the Audit Committee Report (pages 107 to 116); accounting policies (pages 166 to 176); and note 2 of the Group ﬁnancial
statements (pages 176 and 177).
There is a risk that the reported revenue may be incorrectly presented on a gross basis as a result of the incorrect assessment
ofwhether the Group has control over the products or services sold and consequently if the Group is principal or agent inits
arrangements with customers. As products and services offered continually evolve the assessment of control needs to be
revisited on an ongoing basis.
The nature of the current systems is to process all revenue streams gross, and a manual adjustment is made by management
atyear end to record revenue on a net basis where Softcat is the agent in the arrangement.
Our response to the risk Key observations communicated to the Audit Committee
We performed the following procedures:
• Performed walkthroughs to update our understanding of the
revenue recognition processes and key controls.
• Updated our understanding of ma nagement’s judgement over the
classiﬁcation of transactions between gross and net presentation.
• Assessed management’s judgement made for any signiﬁcant new
product types by independently assessing the nature of such
products and meeting with key members of the sales and solutions
teams to develop an understanding of Softcat’s responsibilities in
relation to the sale. We challenged whether Softcat has primary
responsibility for fulﬁlling the promise of the goods or service and
whether Softcat is exposed to inventory risk during the delivery
period, in order to help ascertain the exercise of control of goods
prior to their delivery, and ultimately concluded if the principal
(gross) or agent (net) treatment applied was appropriate according
to the criteria set out within IFRS 15 and management’s revised
accounting policies.
• Tested a sample of transactions across the year to determine the
Group’s control over the product or service, including:
− Verifying the product type to external sources, such as supplier
websites, and met with key members of the sales and solutions
teams to develop an understanding of Softcat’s responsibilities
in relation to the sale. For each sample selected, we challenged
whether Softcat has primary responsibility for fulﬁlling the
promise of the goods or service and whether Softcat is exposed
to inventory risk during the delivery.
− Corroborating the related cost for each sample item to
supporting purchase invoices.
− Assessing if principal (gross) or agent (net) treatment should
be applied and compared this to management’s conclusion to
determine if this was appropriate according to the criteria set out
within IFRS 15.
• Reperformed management’s calculation of the adjustment to record
revenue on a net basis.
• Assessed appropriateness of disclosures in the Annual Report and
Accounts by comparing the disclosures against the requirements
under IFRS.
We concluded that the judgements made by management
are consistent with the evidence we have observed, the
presentation and disclosure of revenue is materially
correct and has been recognised in accordance with IFRS.
We concluded that management’s disclosures in relation
to revenue, including disclosed accounting policies
andthose relating to critical accounting judgements,
areappropriate.
159Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Key audit matters continued
Misstatement of rebate income to overstate reported results at or near year end
Accrued rebate income at 31 July 2024 amounts to £10.3m (2023: £9.3m).
Refer to the Audit Committee Report (pages 107 to 116); accounting policies (pages 166 to 176); and note 11 of the Group ﬁnanci al
statements (page 182).
Rebates are recorded through a primarily manual process. While most rebates are agreed with the supplier and received during
the year, there is an opportunity to misstate results through adjustments to the balance sheet rebate receivable.
Our response to the risk Key observations communicated to the Audit Committee
We performed the following procedures:
• Performed walkthroughs to update our understanding of the rebate
processes and key controls.
• Tested key controls within the rebate process.
• Obtained conﬁrmations from a sample of sales and vendor
management personnel to conﬁrm no rebate agreements outside
ofstandard practice.
• Tested the year-end accrued income by conﬁrming a statistical sample
of rebates due from suppliers to third-party source documentation.
• Analysed the rebate receivable by vendor and compared the largest
vendor level balances (making up 82% of the balance) against the
31 July 2023 comparative balances to identify unusual movements
that are not in line with our expectation or understanding of the
business. We performed analysis to understand the drivers of
increases or decreases in the underlying balances.
• Assessed the cash conversion of rebates accrued at the year end
and tested a sample to subsequent receipts.
• Tested a statistical sample of rebate transactions recorded in the
statement of proﬁt and loss throughout the year and obtained
underlying support to consider whether the transactions have been
recorded in the correct period.
• Assessed appropriateness of disclosures in the Annual Report and
Accounts by comparing the disclosures against the requirements
under International Financial Reporting Standards.
We concluded that the rebate receivable and
corresponding income are materially correct and
havebeen recognised in accordance with IFRSs.
We concluded that management’s disclosures in
relationto accrued income, including disclosed
accounting policies, are appropriate.
As part of our procedures, we noted no indication
ofdeliberate or other manipulation of accrued
incomeormanagement override.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identiﬁed misstatements
onthe audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to inﬂuence the
economic decisions of the users of the ﬁnancial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £7.9m (2023: £7.0m), which is 5% (2023: 5%) of proﬁt before tax. Webelieve that
proﬁt before tax provides us with the most appropriate basis as it drives shareholder returns and is a key measure of the Group’s
performance.
We believe that the primary area of focus of the parent company’s stakeholders are consistent with those of the Group. We have
determined materiality for the parent company to be £7.9m.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement
was that performance materiality was 50% (2023: 50%) of our planning materiality, namely £4.0m (2023: £3.5m). We have set
performance materiality at this percentage to reﬂect the quantum of audit adjustments identiﬁed in the prior period.
Reporting threshold
An amount below which identiﬁed misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.4m (2023: £0.3m),
which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light
ofother relevant qualitative considerations in forming our opinion.
160 Softcat plc Annual Report and Accounts 2024
Independent auditor’s report continued
To the members of Softcat plc
Other information
The other information comprises the information included in the Annual Report set out on pages 1 to 153, other than the ﬁnancial
statements and our Auditor’s Report thereon. The Directors are responsible for the other information contained within the
AnnualReport.
Our opinion on the ﬁnancial statements does not cover the other information and, except to the extent otherwise explicitly stated
in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the ﬁnancial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the ﬁnancial statements themselves. If, based on the work we have performed, we conclude tha t
there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the ﬁnancial year for which the ﬁnancial statements
are prepared is consistent with the ﬁnancial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the
course of the audit, we have not identiﬁed material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
toyou if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company ﬁnancial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration speciﬁed by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and Company’s compliance with the provisions of the UK Corporate Governance
Code speciﬁed for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the ﬁnanc ial statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identiﬁed, set out on pages 166 to 168;
• Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate, set out on page 89;
• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meet s
its liabilities, set out on page 89;
• Directors’ statement on fair, balanced and understandable, set out on page 153;
• Board’s conﬁrmation that it has carried out a robust assessment of the emerging and principal risks, set out on page 83;
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems
setout on page 83; and
• the section describing the work of the Audit Committee set out on page 107.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 153, the Directors are responsible for the
preparation of the ﬁnancial statements and for being satisﬁed that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the ﬁnancial statements, the Directors are responsible for assessing the Group and parent company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the parent company or to cease operations, or have no
realistic alternative but to do so.
161Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Auditor’s responsibilities for the audit of the ﬁnancial statements
Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an Auditor’s Report that includes our opinion. Reasonable assurance
isahigh level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
orinthe aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these
ﬁnancial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with o ur
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due
tofraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance
ofthe Company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined
that the most signiﬁcant of those related to the reporting framework (IFRS, the Companies Act 2006 and the UK Corporate
Governance Code 2018), relevant tax compliance regulations in the UK, relevant employment law in the UK and the Data
Protection Act 2018. In addition, we concluded that there are certain signiﬁcant laws and regulations which may have an
effect on the determination of the amounts and disclosures in the ﬁnancial statements, being the Listing Rules of the London
Stock Exchange.
• We understood how Softcat plc is complying with those frameworks by making inquiries of management, those responsible
for legal and compliance procedures and the Company Secretary. We corroborated our enquiries through our review of Board
minutes, discussions with the Audit Committee and any correspondence received from regulatory bodies.
• We assessed the susceptibility of the Group’s ﬁnancial statements to material misstatement, including how fraud might
occur, meeting with management to understand where it considered there was susceptibility to fraud. We also considered
performance targets and their propensity to inﬂuence efforts made by management to manage earnings or inﬂuence the
perceptions of analysts. Where this risk was considered to be higher, we performed audit procedures to address each
identiﬁed fraud risk. The key audit matters section above addresses procedures performed in areas where we have concluded
the risks of material misstatement are highest (including where due to the risk of fraud). In addition, we completed procedures
to conclude on the compliance of the disclosures in the Annual Report and Accounts with the requirements of the relevant
accounting standards, UK legislation and the UK Corporate Governance Code 2018.
• Based on this understanding, we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved journal entry testing, review of Board minutes to identify non-compliance with such laws and
regulations, review of reporting to the Audit Committee on compliance with regulations, review of reporting of internal
audit,enquires of the Company Secretary and management and review of any instances of whistleblowing reporting.
A further description of our responsibilities for the audit of the ﬁnancial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
Other matters we are required to address
• Following the recommendation from the audit committee we were appointed by the company on 14 December 2023 to audit
the ﬁnancial statements for the year ending 31 July 2024 and subsequent ﬁnancial periods. The period of total uninterrupted
engagement including previous renewals and reappointments is twelve years, covering the years ending 2013 to 2024.
• The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assu me
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or
forthe opinions we have formed.
Marcus Butler (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
23 October 2024
162 Softcat plc Annual Report and Accounts 2024

|  | 2024 | 2023
| Notes | £’000 | £’000
Revenue | 2 | 962 , 6 33 | 985, 3 00
Cost of sales |  | (5 4 4 , 8 8 0) | (6 1 1, 4 6 6)
Gross proﬁt |  | 417,753 | 373 , 8 3 4
Administrative expenses |  | (26 3 , 6 8 9) | (23 2,93 6)
Operating proﬁt | 3 | 15 4 , 0 6 4 | 14 0 , 8 9 8
Finance income | 4 | 5,778 | 1,1 71
Finance cost | 4 | (4 4 3) | (2 0 5)
Proﬁt before tax |  | 159, 3 9 9 | 141 , 8 6 4
Income tax expense | 5 | (4 0 , 3 5 5) | (2 9 , 8 35)
Proﬁt for the year |  | 119, 0 4 4 | 112 , 0 2 9
Other comprehensive income |  |  |
Other comprehensive income that may be reclassiﬁed to proﬁt or loss in subsequent periods: |  |  |
Foreign exchange differences on translation of foreign branches and subsidiaries |  | (62 0) | (20 4)
Net gain/(loss) on cash ﬂow hedge |  | 514 | (799)
Total other comprehensive loss |  | (10 6) | (1, 0 0 3)
Total comprehensive income for the year |  | 118 ,9 3 8 | 111, 0 2 6
Proﬁt attributable to: |  |  |
Owners of the Parent Company |  | 119, 0 4 4 | 112 , 0 2 9
Total comprehensive income attributable to: |  |  |
Owners of the Parent Company |  | 11 8 , 9 3 8 | 111, 0 2 6
Earnings per ordinary share (p) |  |  |
Basic | 18 | 59.7 | 56. 2
Diluted | 18 | 59. 4 | 56 .0

The Consolidated statement of proﬁt or loss and other comprehensive income has been prepared on the basis that all operations
are continuingoperations.
The notes on pages 166 to 190 form part of these consolidated ﬁnancial statements.
Consolidated statement of proﬁt or loss and other comprehensive income
For the year ended 31 July 2024
163Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report

|  | 2024 | 2023
| Notes | £ ’000 | £’000
Non-current assets |  |  |
Property, plant and equipment | 7 | 9, 8 3 2 | 11, 3 4 8
Right-of-use assets | 8 | 10 , 0 6 6 | 9, 9 6 9
Int angible assets | 9 | 11, 6 0 8 | 7,1 5 5
D eferred tax asset | 15 | 2, 5 7 1 | 2,997
|  | 34,0 77 | 31,4 69
Current assets |  |  |
Inventories | 10 | 2, 91 6 | 3,591
Trade and other receivables | 11 | 58 5, 302 | 49 0 ,0 41
Cash and cash equivalents | 14 | 15 8 , 4 5 4 | 12 2 , 6 2 1
|  | 74 6 , 67 2 | 616 , 2 5 3
Total assets |  | 780,7 49 | 64 7 , 72 2
Current liabilities |  |  |
Trade and other payables | 12 | (4 3 0 , 0 82) | (3 59 ,6 27)
Contract liabilities | 13 | (31,980) | (23 , 8 5 1)
Income tax payable |  | (1, 141) | (6)
Lease liabilities | 8 | (2, 253) | (2,7 3 4)
|  | (4 6 5 , 4 5 6) | (386,21 8)
Non-current liabilities |  |  |
Contract liabilities | 13 | (9, 151) | (3 , 03 2)
Lease liabilities | 8 | (8,105) | (7 ,027)
|  | (17 , 256) | (10 , 0 59)
Total liabilities |  | (4 8 2 , 712) | (396 , 27 7)
Net assets |  | 298,037 | 25 1,445
Equity |  |  |
Issued share capital | 17 | 10 0 | 10 0
Share premium account |  | 4, 97 9 | 4, 97 9
Cash ﬂow hedge reserve |  | (2 8 5) | (799)
Foreign exchange translation reserve |  | 2, 73 8 | 3,358
Retained earnings |  | 290, 505 | 24 3 , 8 0 7
Total equity |  | 298,037 | 25 1,445

The notes on pages 166 to 190 form part of these consolidated ﬁnancial statements.
The ﬁnancial statements on pages 162 to 191 were approved by the Board of Directors and authorised for issue on 23 October 2024.
On behalf of the Board
Graham Charlton Katy Mecklenburgh
Chief Executive Ofﬁcer Chief Financial Ofﬁcer
Softcat plc company registration number: 02174990
Consolidated statement of ﬁnancial position
As at 31 July 2024
164 Softcat plc Annual Report and Accounts 2024

Equity attributable to owners of the Parent |  |  |  |  |  |
|  |  |  | Foreign |  |
|  | Share |  | exchange |  |
| Share | premium | Cash ﬂow | translation | Retained |
| capital | account | hedge reserve | reserve | earnings | Total
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Balance at 1 August 2022 | 10 0 | 4 ,97 9 | — | 3 , 5 6 2 | 2 0 2 , 4 59 | 2 11,10 0
P r o ﬁ t f o r t h e y e a r | — | — | — | — | 112,029 | 112,029
Impact of foreign exchange on reserves | — | — | — | (204) | — | (204)
Net loss on cash ﬂow hedge | — | — | (799) | — | — | (799)
Total comprehensive income for the year | — | — | (799) | (204) | 1 1 2,029 | 1 1 1,026
S h a r e-b a s e d p a y m e n t t r a n s a c t i o n s | — | — | — | — | 3,330 | 3,330
D i v i d e n d s p a i d | — | — | — | — | (74,175) | (74,175)
D i v i d e n d e q u i v a l e n t s p a i d | — | — | — | — | (66) | (66)
T a x a d j u s t m e n t s | — | — | — | — | 230 | 230
Balance at 31 July 2023 | 10 0 | 4 ,97 9 | (799) | 3,358 | 2 4 3 , 8 0 7 | 2 51 , 4 4 5
P r o ﬁ t f o r t h e y e a r | — | — | — | — | 119,044 | 119,044
Impact of foreign exchange on reserves | — | — | — | (620) | — | (620)
Net gain on cash ﬂow hedge | — | — | 5 1 4 | — | — | 5 1 4
Total comprehensive income for the year | — | — | 5 1 4 | (620) | 1 1 9 ,04 4 | 1 18, 938
S h a r e-b a s e d p a y m e n t t r a n s a c t i o n s | — | — | — | — | 3,612 | 3,612
D i v i d e n d s p a i d | — | — | — | — | (76,048) | (76,048)
Dividend equivalents paid | — | — | — | — | (98) | (9 8)
T a x a d j u s t m e n t s | — | — | — | — | 182 | 182
O t h e r | — | — | — | — | 6 | 6
Balance at 31 July 2024 | 100 | 4, 979 | (285) | 2 ,738 | 290, 505 | 298 ,037

The notes on pages 166 to 190 form part of these consolidated ﬁnancial statements.
The share capital and share premium accounts represent the nominal value and premium arising on the issue of equity shares.
During the year ended 31 July 2024, 244,109 share options (2023: 174,791) were exercised and new shares were issued to satisfy
this exercise. Proceeds of £Nil (2023: £Nil) were realised from the exercise of these share options.
As at 31 July 2024, the SIP Trust held 133,538 shares (2023: 159,996) awarded to employees as part of the free share award,
subject to service conditions. A further 369,513 shares (2023: 368,545) were held on behalf of employees who have taken part
inthe Group’s voluntary partnership share purchase programme. The SIP also held 51,041 unallocated shares (2023: 51,041).
Consolidated statement of changes in equity
For the year ended 31 July 2024
165Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report

|  | 2024 | 2023
| Notes | £’000 | £’000
Net cash generated from operating activities | 19 | 115 , 6 0 8 | 10 4 , 8 0 2
Investing activities |  |  |
Finance income | 4 | 5,778 | 1,1 71
Purchase of property, plant and equipment | 7 | (1,1 15) | (2, 5 4 4)
Purchase of intangible assets | 9 | (6, 0 17) | (701)
Net cash used in investing activities |  | (1, 3 5 4) | (2 , 07 4)
Financing activities |  |  |
Issue of share capital |  | — | —
Dividends paid | 6 | (76,048) | (7 4, 1 75)
Payment of principal portion of lease liabilities | 8 | (1,9 2 9) | (2 , 8 39)
Payment of interest portion of lease liabilities | 4,8 | (44 3) | (2 0 5)
Net cash used in ﬁnancing activities |  | (78,420) | (77 , 21 9)
Net increase in cash and cash equivalents |  | 35,8 34 | 25, 509
Cash and cash equivalents at beginning of year | 14 | 12 2 , 6 2 1 | 97 , 31 6
Exchange losses on cash and cash equivalents |  | (1) | (2 0 4)
Cash and cash equivalents at end of year | 14 | 15 8 , 4 5 4 | 12 2 , 6 2 1

The notes on pages 166 to 190 form part of these consolidated ﬁnancial statements.
Consolidated statement of cash ﬂows
For the year ended 31 July 2024
166 Softcat plc Annual Report and Accounts 2024
1 Material accounting policies
1.1 Corporate information
The principal activity of Softcat plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is that of a value-added IT reseller
and IT infrastructure solutions provider to the corporate and public sector markets.
The Company is a public limited company incorporated and domiciled in England and Wales and whose shares are publicly
traded. The registered ofﬁce is Solar House, Fieldhouse Lane, Marlow, Buckinghamshire, SL7 1L W, in the United Kingdom.
The registered number of the Company is 02174990.
The material accounting policies applied in the preparation of the consolidated ﬁnancial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.
1.2 Basis of preparation
The Group has prepared the consolidated ﬁnancial statements in accordance with UK-adopted international accounting
standards (IFRS) in accordance with the requirements of the Companies Act 2006. IFRS includes the application of International
Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’) and the IFRS
Interpretations Committee (‘IFRIC’) interpretations.
Softcat US LLC, a Limited Liability Company (‘LLC’) began trading on 1 February 2024 and is a wholly owned subsidiary of Softcat
plc. Prior to this, trade in the US was recorded within a branch of Softcat plc. Therefore, the consolidated ﬁnancial statement s have
been prepared for the ﬁrst time in FY2024.
The consolidated ﬁnancial statements of the Group have been prepared under the historical cost convention and are presented
in the Group’s presentational and functional currency of Pounds Sterling and all values are rounded to the nearest thousand
(‘£’000’), except when otherwise stated.
The Group applied all standards and interpretations issued by the IASB that were effective as at 1 August 2023. The accounting
policies set out below have, unless otherwise stated (see below), been applied consistently to all periods presented in these
ﬁnancial statements.
The consolidated ﬁnancial statements include the results of Softcat plc, a company registered in the UK, and all its subsidiary
undertakings made up to the same accounting date. Subsidiary undertakings are those entities controlled by Softcat plc. Control
exists where the Group is exposed to, or has the rights to variable returns from its involvement with, the investee and has the
ability to use its power over the investee to affect its returns.
Consideration of climate change matters
The potential climate change-related risks and opportunities to which the Group and Company are exposed, as identiﬁed
b
y management, are disclosed in the Group’s Task Force on Climate-related Financial Disclosures (‘TCFD’) disclosures in the
Annual Report. Management has assessed the potential ﬁnancial impacts relating to the identiﬁed risks and exercised judgement
in concluding that there are no material ﬁnancial impacts of the Group and Company’s climate-related risks and opportunities on
the ﬁnancial statements. These judgements will be kept under review by management as the future impacts of climate change
depend on environmental, regulatory and other factors outside of the Group and Company’s control which are not all
currently known.
Going concern
Overview
The consolidated Group and Company ﬁnancial statements have been prepared on a going concern basis covering at least the
t
welve month period from the date of signing the ﬁnancial statements.
In considering the going concern basis for preparing the ﬁnancial statements, the Directors consider the Group and Company’s
objectives and strategy, its principal risks and uncertainties in achieving its objectives and its review of business performance and
ﬁnancial position, which are all set out in the Strategic Report (see pages 1 to 89) and Chief Financial Ofﬁcer’s Review sections (see
pages 38 to 41 of this Annual Report). Given the current macro-economic environment and considering the latest guidance issued
by the FRC the Directors have undertaken a fully comprehensive going concern review.
The Group has modelled three scenarios in its assessment of going concern. These are:
• the base case;
• the severe but plausible case; and
• the reverse stress test case.
Further details, including the analysis performed and conclusion reached, are set out below.
The Directors have reviewed detailed ﬁnancial forecasts for a twelve-month period from the date of this report (the going conce rn
period) until 31 October 2025. All the forecasts reﬂect the payment of the FY2024 dividend of £77.9m which will be paid in
December 2024 subject to approval at the AGM.
Liquidity and ﬁnancing position
At 31 July 2024, the Group held instantly accessible cash and cash equivalents of £158.5m, with net current assets of £281.2m.
N
ote 1 to the ﬁnancial statements in the Annual Report includes the Group’s objectives, policies and processes for managing its
capital, its ﬁnancial risk management and its exposures to credit risk and liquidity risk. Operational cash ﬂow forecasts for t he
going concern period are sufﬁcient to support the business with the £75.0m cash ﬂoor set by the Board not being breached.
There is a sufﬁcient level of liquidity headroom post-mitigation across the going concern forecast period in base and severe but
plausible scenarios considered and outlined in more detail below.
Notes to the consolidated ﬁnancial statements
For the year ended 31 July 2024
167Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1 Material accounting policies continued
1.2 Basis of preparation continued
Going concern continued
Challenging economic environment
Management have, in all three scenarios, considered the principal challenges to short-term business performance which are
expected to be:
• an economic downturn in the UK economy, aided by high broad-based inﬂation and interest rates; and
• a higher risk of credit losses.
Despite the challenging economic environment, the Group and Company have traded well, delivering double-digit year-on-year
growth in gross proﬁt and operating proﬁt growth is ahead of expectations. The Board continue to monitor the global and
national economic environment and organise operations accordingly.
Base case
The base case, which was approved by the Board in October 2024, takes into account the FY2025 budget process which includes
estimated growth and increased cost across the going concern period and is consistent with the actual trading experience
through to September 2025. The key inputs and assumptions in the base case include:
• continued revenue growth in line with historic rates;
• rebate income continues to be received in proportion to cost of sales as in FY2024;
• employee commission is incurred in line with the gross margin; and
• increased levels of cost to reﬂect continued investment in our people and the businesses IT infrastructure.
The Group has taken a measured approach to the base case and has balanced the expected trading conditions with available
opportunities in an increasingly resilient area of customer spend, which is supported by the current ﬁnancial position. In maki ng
our forecasts we balanced our customer needs alongside employee welfare. Year to date trading to the end of September 2025
is consistent with the base case forecast.
Severe but plausible case
Given the current economic challenges facing our customer base and supply chain, we have modelled a severe but plausible
scenario. In this case we have modelled a decline in revenue, versus the base case, which is below any historic trend and more
severe than experienced during the height of the COVID-19 pandemic. Further impacts of this scenario such as reduced margins
and greater credit losses have also been considered.
The key inputs and assumptions, compared to the base case, include:
• an average 5% reduction in revenue;
• reduced gross proﬁt margins of 0.5% in the period;
• additional bad debt write offs of £4.2m across the forecast period;
• an average 5% reduction in rebates;
• extending the debtor days from historic levels achieved and no change to historic supplier payment days by an additional
three days;
• paying a reduced interim dividend in line with lower proﬁtability but still within the range set out in the dividend policy; and
• commission cost adjusted downwards in line with reduced proﬁtability and cost of sales, but at the same percentage rates as
in the base case.
The purpose of this scenario was to consider if there was a signiﬁcant risk that the Group and Company would move to being
cash negative in any of the months in the going concern period. Even at these lower levels of activity, which the Directors believe
is a highly unlikely outcome, the Group continues to be proﬁtable and maintains a positive cash balance at all times. Despite this,
management have modelled further cost saving and working capital action (see mitigating actions) that will enable the Group
to mitigate the impact of reduced cash generation further and achieve the Board’s desired minimum cash position, should this
scenario occur. The Directors are conﬁdent that they can implement these actions if required.
Mitigating actions
There are several potential management actions that have not been included in the severe but plausible forecast, including
signiﬁcant cost reduction measures and additional annual working capital savings. The actions, which if implemented would
offset the reduced activity, include:
• savings in discretionary areas of spend;
• delayed payment to suppliers foregoing early settlement discount; and
• short-term supplier payment management.
The mitigations are deemed achievable and reasonable as the Group beneﬁts from a ﬂexible business model with a high
proportion of costs linked to performance.
168 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
1 Material accounting policies continued
1.2 Basis of preparation continued
Going concern continued
Reverse stress test
The Directors have performed an analysis of each variable used in the severe but plausible case that would, standalone, trigger
a threat to the going concern status of the business. This reverse stress testing goes beyond what is considered in the severe but
plausible scenario to understand the limits of the business model.
Before a negative cash balance within the going concern period is likely, the following key inputs and assumptions, compared
to the base case, would be required:
• a reduction in sales of 90%;
• a reduction in gross margin of 8%; and
• extending the debtor days by an additional twelve days.
The Board considers the forecasts and assumptions used in the reverse stress tests, as well as the events that could lead to it,
to be remote.
Going concern conclusion
Based on the forecast and the scenarios modelled, together with the performance of the Group and Company to date, the Directors
consider that the Group and Company have sufﬁcient liquidity headroom to continue in operational existence for the twelve-month
period from the date of this report (the going concern period) until 31 October 2025. Accordingly, at the October 2024 Board
meeting, the Directors concluded from this analysis it was appropriate to continue to adopt the going concern basis in preparing
the consolidated ﬁnancial statements. Should the impact of these conditions be even more prolonged or severe than currently
forecast by the Directors under the severe but plausible case scenario, the Group and Company would need to implement
additional operational or ﬁnancial measures.
In relation to the identiﬁed potential climate change-related risks and opportunities, the Directors do not believe there would be
a material impact on cash ﬂows in the going concern period.
Basis of consolidation
The consolidated ﬁnancial statements comprise the ﬁnancial statements of the Company and its subsidiaries as at 31 July 2024.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. Speciﬁcally, the Group controls an investee if, and only if,
the Group has:
• power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the inves tee);
• exposure, or rights, to variable returns from its involvement with the investee; and
• the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption, and when
the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
• the contractual arrangement(s) with the other vote holders of the investee;
• rights arising from other contractual arrangements; and
• the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated ﬁnancial statements from the date the Group gains control until the
date the Group ceases to control the subsidiary.
169Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1 Material accounting policies continued
1.3 Adoption of new and revised standards
Finance (No. 2) Bill 2023, which includes Pillar Two legislation, was substantively enacted on 20 June 2023. The Group has applied
the mandatory exemption from recognising and disclosing information about deferred tax assets and liabilities related to Pillar
Two income taxes as required by the amendments to IAS 12 International Tax Reform–Pillar Two Model Rules which was issued
in May 2023.
There have been no other new standards effective, or issued but not yet effective, in the year to 31 July 2024, that materially affect
Softcat. There have also been no changes to accounting standards that will materially affect Softcat based on existing standard s.
A number of new or amended standards became applicable for the current reporting period. These standards, amendments
or interpretations are not expected to have a material impact on the Group in the current or future reporting periods:
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of accounting policies.
• Amendments to IAS 8 Deﬁnition of accounting estimates.
• Amendments to IAS 12 Deferred tax related to assets and liabilities arising from a single transaction.
• Amendments to IAS 12 Pillar Two model rules.
• Implementation of IFRS 17 Insurance contracts.
New standards and interpretations not yet applied
The following new or amended IFRS accounting standards, amendments and interpretations are not yet adopted and it is
e
xpected that where applicable, these standards and amendments will be adopted on each respective effective date:
• Amendments to IAS 1 Presentation of ﬁnancial statements: non-current liabilities with covenants.
• Amendments to IFRS 16 Lease liability in a sale and leaseback.
• Amendments to IAS 7 and IFRS 7 Supplier ﬁnance arrangements.
These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future
reporting periods.
1.4 Critical accounting judgements and key sources of estimation uncertainty
When applying the Group’s accounting policies, management must make a number of key judgements involving estimates and
assumptions concerning the future. These estimates and judgements are based on factors considered to be relevant, including
historical experience that may differ signiﬁcantly from the actual outcome. The key assumptions concerning the future and other
key sources of estimation uncertainty at the balance sheet date that have a signiﬁcant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next ﬁnancial year include:
Revenue cut-off
The Group’s management information systems are conﬁgured to recognise revenue upon notiﬁcation of dispatch from the supplier
or distributor which in instances, especially regarding physical shipments, may not be aligned to when control has been transfe rred
to the customer and the performance obligation has been met by the Group. Management therefore performs an exercise to
capture items that may have been dispatched from the distributor but not delivered in the ﬁnancial year, and subsequently defers
the recognition of revenue and associated cost into the following year. This gives rise to a deferred income, which is recognis ed
as a contract liability, and associated inventory in the Consolidated statement of ﬁnancial position. The exercise applied includes
assumptions, which management believes are reasonable, in order to identify items that ﬁt the criteria for deferral. Separately,
management reviews individual large transactions on a case-by-case basis, which reduces the opportunity for error.
The key judgements that are made in the cut-off process are as follows:
• When identifying transactions to review in the cut-off process, management limits the review period to a ﬁxed number of days
before and after the period end and validates the date of dispatch.
• Management incorporates a one-day shipment delay assumption onto the sale of hardware items to reﬂect the time taken
between vendor shipment and customer delivery. We further assess a ﬁve-day risk window for international hardware shipments.
In the process of applying the Group’s accounting policies, management has made the following judgements, which have the
most signiﬁcant effect on the amounts recognised in the ﬁnancial statements:
Principal versus agent
Signiﬁcant judgement is required in determining whether the Group is acting as principal, reporting revenue on a gross basis, o r
a
gent, reporting revenue on a net basis. Softcat evaluates each revenue stream against the following indicators when determining
whether it is acting as principal or agent in a transaction: (i) primary responsibility for fulﬁlling the promise to provide th e speciﬁed
goods or service; (ii) inventory risk before the speciﬁed good or service has been transferred to a customer; and (iii) discret ion in
establishing the price for the speciﬁed good or service. Certain revenue streams present a more balanced judgement than others
when assessed against the above criteria and the conclusion may be reliant on the weighting applied to the responses to these
criteria. When applying the weighting and concluding on whether principal or agent treatment is appropriate, the Group exercises
signiﬁcant levels of judgement due to the balanced nature of the assessment. The speciﬁc judgements made for each revenue
category are discussed in the accounting policy for revenue as disclosed below.
170 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
1 Material accounting policies continued
1.5 Revenue recognition
Revenue is recognised based on the completion of performance obligations at the transaction price allocated to the performance
obligation. The transaction price is determined by the price speciﬁed in the underlying contract or order. Where the contracts
include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the
stand-alone selling prices. No discounts, loyalty points or returns are offered to customers. All performance obligations are
separately listed as individual items on the order and the price is allocated on this basis. A performance obligation is satisﬁ ed
when control of the promised good or service is transferred to the customer. The following indicators are used by the Group
in determining when control has passed to the customer:
(i) the Group has a right to payment for the product or service;
(ii) the customer has legal title to the product;
(iii) the Group has transferred physical possession of the product to the customer;
(iv) the customer has the signiﬁcant risks and rewards of ownership of the product; and
(v) the customer has accepted the product.
Principal versus agent
The Group evaluates the following indicators amongst others when determining whether it is acting as a principal or agent in the
t
ransaction and recording revenue on a gross, or net, basis:
(i) the Group is primarily responsible for fulﬁlling the promise to provide the speciﬁed goods or service;
(ii) the Group has inventory risk before the speciﬁed good or service has been transferred to a customer; and
(iii) the Group has discretion in establishing the price for the speciﬁed good or service.
Hardware revenue
The Group sells hardware that is sourced from and delivered by multiple vendors and distributors. Revenues from sales of hardware
p
roducts are recognised on a gross basis as the Group is acting as a principal in these transactions, with the gross value of t he
consideration from the customer recorded as revenue with the exception of public sector partner business revenue as explained
below. The Group is acting as principal as it has primary responsibility for the acceptability of goods sold following the prov ision
of consulting services which are not considered to be separately identiﬁable. Softcat is also exposed to inventory risk during the
delivery period and establishes the selling price itself. Revenue from the sale of these goods is recognised when the control has
passed to the buyer, therefore the Group has satisﬁed its performance obligation. In line with industry standard terms, payment
is generally due 30 days after invoice date.
Vendors typically provide standard warranties on most of the hardware products the Group sells. These manufacturer warranties
are assurance-type warranties and are not considered separate performance obligations. The warranties are not sold separately
and only provide assurance that products will conform with the manufacturer’s speciﬁcations.
Software revenue
Revenue from software licence sales is recognised on a net basis as the Group is acting as an agent in these transactions at the
point the software licence is delivered to the customer. The Group is deemed to be acting as agent in these transactions as these
products are intangible, customer speciﬁc and in most cases sent directly to customers by the vendor electronically, removing
inventory risk for the Group prior to delivery. Despite the ability to set pricing, the lack of inventory risk and the vendor having
primary responsibility for the product meeting customer speciﬁcations, through largely standardised products, underline that
these sales should be recorded as agent.
The revenue associated with the licence sale is recognised upon the transfer of the licence to the customer. At this point Softcat
has satisﬁed its performance obligations. Payment is generally due 30 days from invoice date.
The Group sells cloud computing solutions which include Software as a Service (‘SaaS’). SaaS solutions utilise third-party part ners
to offer the Group’s customers access to software in the cloud that enhances ofﬁce productivity, provides security or assists in
collaboration. As the Group has satisﬁed its performance obligations by arranging the transfer of the licensing to the customer,
revenue is recognised in full at that point on a net basis as the Group is acting as an agent in the transaction, with an invoice
subsequently raised. Payment is generally due within 30 days from invoice date.
The Group offers access to corporate enterprise agreements, a speciﬁc licensing program for eligible customers, exclusively
through a single vendor. For these transactions the Group introduces the customer to the vendor who then fulﬁls the sale, including
transfer of licensing, invoicing and cash collection, without further involvement of the Group. In return for this introduction the
vendor compensates the Group with a fee as the Group has satisﬁed its performance obligations at the point of initial transacti on
being completed between the vendor and the customer. This fee is recognised net as the Group is acting as an agent in these
transactions. Payment is generally due within 30 days of the initial transaction between the vendor and the customer.
171Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1 Material accounting policies continued
1.5 Revenue recognition continued
Principal versus agent continued
Service revenue
Softcat sells professional services days which are fulﬁlled by either Softcat’s own internal team of consultants or by consultants
provided by third parties. The Group recognises the revenue on these transactions, irrespective of whether they are fulﬁlled
internally or externally, when conﬁrmation has been received from the customer that the work has been satisfactorily completed.
In most cases there is a short timeframe between a customer order and subsequent delivery of the sold service days. As such, the
Group does not recognise revenue on a percentage completion basis as this would not have a material impact.
On rare occasions the Group will sell professional service days which cover an extended period. For these transactions,
management assesses the individual contract and, if required, recognises the revenue over time according to the output method.
Softcat recognises revenue on the basis of direct measurements of the value to the customer which for professional days would
be days completed as a percentage of total days. Revenue is recognised on a gross basis; the Group is deemed to be acting as
principal in these transactions as it is responsible for selecting the external party, where relevant, for the acceptability of the
services and for determining the price charged to the customer.
The Group also provides hosted managed services to its customers offering Infrastructure as a Service (‘IAAS’) and managed
print services among others. The Group hosts these services using internal resources and recognises revenue on a straight-line
basis over the contractual service period. The Group recognises the respective revenue on a gross basis as the Group is acting
as a principal in the transaction as it has both managerial involvement and effective control over the services being provided
throughout the contract period.
Softcat also sells extended or enhanced warranty products provided by third parties. These warranties are sold separately to
hardware and provide the customer with a service in addition to assurance that the product will function as expected. For these
enhanced warranty products, the Group is arranging for those services to be provided by the third party over an extended period
and therefore is acting as an agent in the transaction and records revenue on a net basis at the point of sale. Revenue from such
services is recognised in full at the point of service commencement as the Group has no ongoing obligation in relation to deliv ery
of the underlying service.
Payments for these goods are generally received on industry standard terms of 30 days from the date of invoice.
Public sector partner business revenue
The Group transacts with several partners in the public sector where the partner is responsible for the solution and customer
relationship. These transactions incorporate the provision of hardware, software or services to the end customer. For this
business, the Group’s responsibilities of invoicing and cash collection are more aligned to those of an agent and therefore this
business is recognised as agent and presented net of cost of sales.
Revenue is recognised in full on satisfactory completion of the work by the partner, as this is the point the Group has satisﬁed
its performance obligations. Payment is generally due within 30 days from completion of the work.
Deferred costs
IFRS 15 requires certain costs to fulﬁl a contract to be recognised as a separate asset. These costs are deferred until the
performance obligation to which they relate has been met. Deferred costs are measured at the purchase price of the associated
goods or services received. Deferred costs are released from the Consolidated statement of ﬁnancial position in line with the
recognition of revenue on the speciﬁc transaction. There are no signiﬁcant or material judgements made by management in the
measurement or recognition of these deferred costs, as costs are matched to an associated sale and the period of deferral is
typically short.
Commissions have been incurred in respect of contracts whereby the performance obligation has not yet been satisﬁed; however,
the Group has applied the practical expedient and recognised the commission as an expense when incurred given that the period
over which the commission would have been recognised is less than a year.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which Softcat has received consideration (or an
amount of consideration is due) from the customer. If a customer pays consideration before Softcat transfers goods or services to
the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). This occurs
infrequently and is usually to support the wishes of the customer who sometimes may prefer to provide funds up front which can
then be allocated to future orders. Contract liabilities are recognised as revenue when Softcat performs obligations under the
contract. Further details of contract balances are provided in note 13.
1.6 Cost of sales
The Group recognises cost of sales at the point at which it recognises revenue as explained above. Cost of sales predominantly
relates to the cost of goods or services purchased from suppliers and then sold to customers. In addition to these costs, the
following elements are also included within cost of sales:
Rebates
Included within cost of sales are rebates received from commercial partners. Further details are provided on rebates in note 1.7 below.
172 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
1 Material accounting policies continued
1.6 Cost of sales continued
Managed service infrastructure costs
The Group operates its own network operating centre which facilitates the selling of Softcat hosted managed services. The costs
of maintaining this capability include, but are not limited to, the rental of space in data warehouses, energy and licensing costs.
These costs represent the cost of sale of selling hosted managed service solutions and are included within cost of sales.
Funded training costs
The Group carries out numerous training programmes, activities and schemes that aim to educate its sales force and internally
promote the products the business resells. The costs of these activities are recognised within cost of sales.
Early settlement discounts
Through the normal course of business, the Group receives credits from distributors and suppliers for the prompt settlement of
invoices. Softcat recognises these discounts in cost of sales as they are considered to be a reduction in the cost of goods sold.
1.7 Rebates
Rebates from suppliers are accounted for in the period in which they are earned and are based on commercial agreements with
suppliers. Rebates earned are mainly sales volume related and are generally short term in nature, with rebates earned but not y et
received typically relating to the preceding quarter’s trading. Other forms of rebate received from commercial partners include
income from training provided to staff. Rebate income is recognised in cost of sales in the Consolidated statement of proﬁt or loss
and other comprehensive income and rebates earned but not yet received are included within accrued income in the
Consolidated statement of ﬁnancial position.
1.8 Interest income
Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate (‘EIR’)
applicable. The EIR is the rate that exactly discounts the estimated future cash payments or receipts through the expected life
of the ﬁnancial instrument or a shorter period, where appropriate, to the net carrying amount of the ﬁnancial asset or liabilit y.
Interest income is included in ﬁnance income in the income statement.
1.9 Property, plant and equipment
Property, plant and equipment other than freehold land is stated at cost, net of accumulated depreciation and/or impairment
losses, if any. If the costs of certain components of an item of property, plant and equipment are signiﬁcant in relation to th e total
cost of the item, they are accounted for and depreciated separately. Depreciation is provided at rates calculated to write off the
cost of each asset over its expected useful life, as follows:
Freehold buildings ﬁfty years straight line
Building improvements remaining period of lease – ten years straight line
Computer equipment three to ﬁve years straight line
Fixtures, ﬁttings and equipment six years straight line
Motor vehicles three years straight line
Land is not depreciated.
An item of property, plant and equipment and any signiﬁcant part initially recognised is derecognised upon disposal or when no
future economic beneﬁts are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or
retirement of an item of property, plant and equipment is determined as the difference between the net disposal proceeds and
the carrying amount of the asset and is recognised in the income statement when the asset is derecognised.
Building improvements relate to expenditure on improving both leasehold property and the freehold property of Solar House in
Marlow. Improvements to Solar House are depreciated over a ten-year period, which represents their useful life. Leasehold
improvements are depreciated over their useful life which is the lesser of the remaining length of the lease or ten years.
The residual values, useful lives and methods of depreciation are reviewed for reasonableness at each ﬁnancial year end and
adjusted for prospectively if appropriate.
1.10 Intangible assets
Intangible assets are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less
accumulated amortisation and accumulated impairment losses, if any. Intangible assets with a ﬁnite useful life are assessed for
impairment whenever there is an indication that the intangible asset may be impaired. Amortisation is provided for at rates
calculated to write off the cost of each asset over its expected useful life, as follows:
Computer software three to ﬁfteen years straight line
173Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1 Material accounting policies continued
1.10 Intangible assets continued
Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs that are
directly attributable to the design and testing of identiﬁable and unique software products controlled by the Group are
recognised as intangible assets where the following criteria are met:
• it is technically feasible to complete the software so that it will be available for use;
• management intends to complete the software and use it;
• there is an ability to use the software;
• it can be demonstrated how the software will generate probable future economic beneﬁts;
• adequate technical, ﬁnancial and other resources to complete the development and to use the software are available; and
• the expenditure attributable to the software during its development can be reliably measured.
The amortisation expense on intangible assets with ﬁnite lives is recognised in the income statement in the expense category
consistent with the function of the intangible assets. The amortisation period and the amortisation method are reviewed at least
at the end of each reporting period. Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the
asset is derecognised.
1.11 Cloud software licence agreements
Licence agreements to use cloud software are treated as service contracts and expensed in the Group’s income statement, unless
the Group has both a contractual right to take possession of the software at any time without signiﬁcant penalty, and the abili ty to
run the software independently of the host vendor. In such cases, the licence agreement is capitalised as software within intan gible
assets. Costs to conﬁgure or customise a cloud software licence are expensed alongside the related service contract in the Grou p’s
income statement, unless they create a separately identiﬁable resource controlled by the Group, in which case they are capitali sed.
1.12 Leases
A lease is a contract or part of a contract that conveys the right to control the use of an identiﬁed asset for a period of tim e in
exchange for consideration. The Group’s leases, which predominantly relate to property leases, are recognised in line with IFRS 16.
The leases policy under IFRS 16 is as follows:
i) Right-of-use assets
Softcat recognises right-of use assets at the commencement date of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised and lea se
payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
Property lease assets three to ten years straight line
The right-of-use assets are also subject to impairment reviews.
ii) Lease liabilities
At the commencement date of the lease, Softcat recognises lease liabilities measured at the present value of lease payments to
be made over the lease term adjusted for any termination options. The lease payments include ﬁxed payments, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. Payments to be
made under the reasonably certain extension option are also included.
In calculating the present value of the lease payments, Softcat uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reﬂect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modiﬁcation, a change in the lease term, a change in the lease payments from
a change in index or rate, or a change in the assessment of an option to purchase the underlying asset.
iii) Short-term leases and leases of low value assets
Softcat applies the short-term lease recognition exemption to any short-term leases it enters into (i.e. those leases that have a
lease term of twelve months or less from the commencement date and do not contain a purchase option). Softcat also applies the
lease of low-value assets recognition exemption to leases that are considered to be low value and under £5,000. Lease payments
on low-value assets and short-term leases are recognised as an expense on a straight-line basis over the lease term.
1.13 Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in th e
ordinary course of business, less estimated costs of completion and the estimated costs to sell.
Inventories include goods in transit and other products ordered to fulﬁl customer orders where the right of ownership is yet
to transfer.
174 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
1 Material accounting policies continued
1.14 Financial instruments
Financial assets
The Group’s ﬁnancial assets include cash and cash equivalents and trade and other receivables. All ﬁnancial assets are recognis ed
when the Group becomes party to the contractual provisions of the instrument.
i) Trade receivables
Trade receivables are recognised and measured at the transaction price less allowance for expected credit losses. Trade receiva bles
do not carry interest.
The simpliﬁed approach on expected credit losses (‘ECLs’) for trade receivables and contract assets has been used as there is not
a signiﬁcant ﬁnancing component to these assets. In accordance with the simpliﬁed approach for impairment of trade receivables
and accrued income under IFRS 9, the loss allowance for trade receivables is always measured at an amount equal to lifetime
expected credit losses and includes a forward-looking element as well as an assessment based on history and experience.
Factors considered when assessing the expected credit losses include prior experience, speciﬁc customer credit ratings,
communication quality, industry factors and the current economic climate.
Due to the size of the receivables ledger and the volume of smaller balances, it is not possible to review all balances individually
and therefore a portion of the ledger is reviewed collectively and provided for as such. More material or higher risk balances are
reviewed individually looking at speciﬁc circumstances including payment history, the forecast of economic conditions in the
sector the customer operates in, communication quality and responsiveness, to determine future expected credit losses, and are
provided for individually with respect to the perceived level of risk. In addition, any entities that are in administration or have been
passed to debt collection are provided for individually.
Unbilled receivables are recognised when a contract results in completion of a performance obligation in advance of the
customer being invoiced.
ii) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, call deposits and bank overdrafts. Cash and cash equivalent
balances have a maturity of three months or less and are subject to an insigniﬁcant level of risk to change in value.
iii) Accrued income
Accrued income predominantly relates to supplier rebates and is recognised according to both rebate agreements and supplier
spend in the ﬁnancial year.
As accrued income has a contractual right to receive cash, it is a ﬁnancial asset and therefore also subject to loss allowances under
IFRS 9. The loss allowance for accrued income is measured at an amount equal to lifetime expected credit losses and includes a
forward-looking element as well as an assessment based on history and experience. Factors considered when assessing the
expected credit losses include prior experience, supplier credit ratings, communication quality, industry norms and the current
economic climate.
Financial liabilities
Financial liabilities are classiﬁed according to the substance of the contractual arrangements entered into. The Group’s ﬁnanci al
liabilities comprise trade and other payables. All ﬁnancial liabilities are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.
i) Trade payables
Trade payables are initially measured at fair value. Trade payables due after one year are measured at amortised cost, using the
effective interest rate method.
Derecognised ﬁnancial instruments
For a small number of customers, Softcat acts as intermediary to provide ﬁnancing arrangements between the customer and a
third-party ﬁnancing provider. Following the delivery of the good s or services, which represents our performance obligation in
full, Softcat receives settlement of the customer invoice, by the third-party ﬁnancing company. Receivables are derecognised only
when Softcat has transferred the receivable, meaning that it has retained the contractual rights to the cash ﬂows, but has assumed
an obligation to pay those cash ﬂows to the ﬁnance provider, in the case where all three of the following conditions are met:
• Softcat has no obligation to pay amounts to the ﬁnance provider unless it collects equivalent amounts from the receivable;
• Softcat is prohibited from selling or pledging the receivable; and
• Softcat has an obligation to remit the cash received without material delay.
The transfer described above qualiﬁes for derecognition as Softcat has transferred substantially all the risks and rewards of o wnership
of the receivable. Its only continuing involvement following delivery is to act as agent in the receipt and transfer of cash payments
and, in line with the derecognition criteria set out above, the customer receivable is derecognised. Softcat does not retain or
regain ownership of any assets at the end of these arrangements and the ﬁnance provider takes on the credit risk of future cash
ﬂows from the customer.
Cash ﬂows in respect of these arrangements are recognised within cash generated from operations and typically result in
a £Nil impact given that the Group acts as agent in the receipt and transfer of cash payments.
175Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
1 Material accounting policies continued
1.15 Pensions
The pension costs charged in the ﬁnancial statements represent the contributions payable by the Group during the year on the
deﬁned contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently
administered fund. The amounts charged to the income statement represent the contributions payable to the scheme in respect
of the accounting period and represent the full extent of the Group’s liability.
1.16 Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the ﬁnancial statements and the corresponding tax bases used in the computation of taxable proﬁt and is accounted
for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable proﬁts will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the tax proﬁt nor the accounting proﬁt.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufﬁcient taxable proﬁts will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asse t is realised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
For deferred tax on leases, under the general approach of IAS 12, the depreciation of the right-of-use asset is regarded as
reducing the temporary difference that arose on initial recognition of the asset, and therefore gives rise to no tax effect. However,
the accretion of the ﬁnance costs on the liability gives rise to an additional deductible temporary difference arising after initial
recognition of the liability, requiring recognition of a deferred tax asset. This gives rise to an immaterial deferred tax asset for the
years ended 31 July 2023 and 31 July 2024.
1.17 Current taxation
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the
reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the Consolidated statement
of proﬁt or loss and other comprehensive income. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Softcat applies judgement in identifying uncertainties over income tax treatments and considered whether it has any uncertain
tax positions and determined that it is highly probable that its tax treatments will be accepted by the taxation authorities. Where
it is not probable that an uncertain tax treatment will be accepted the most likely amount or expected amount is recognised
depending on which method better predicts the resolution of the uncertainty.
1.18 Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into Pounds Sterling at the rates of exchange
ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transac tion.
All differences are taken to the income statement.
The assets and liabilities of foreign operations are translated into Pounds Sterling at the rates of exchange ruling at the balance
sheet date. Income and expense items are translated using average exchange rates, which approximate to actual rates, for the
relevant accounting period. Exchange differences arising, if any, are classiﬁed as other comprehensive income and recognised
in the foreign exchange translation reserve in the Consolidated statement of ﬁnancial position.
1.19 Share-based payments
During the year the Group operated the following equity-settled share option schemes:
Share Incentive Plan (‘SIP’)
The Group operates a SIP for employees who were awarded free shares following the initial public offering in November 2015.
Shares were allocated to employees on the basis of length of service. Free shares awarded to an employee under the SIP are
subject to a minimum holding period of three years following the date on which beneﬁcial interest in the relevant ordinary shar es
is conferred by the SIP Trustee to the employee.
The fair value of the SIP shares was determined by the share price at date of grant, on 9 December 2015. A fair value charge was
recognised as an expense in the income statement over the vesting period with a corresponding increase in equity. The charge
was recognised only on the expected number of shares to vest. The assumption used for expected leavers within three years from
the date of award was calculated with reference to historical employee retention rates.
In addition, the Group’s voluntary partnership share purchase programme, which is open to all eligible employees, is administered
through the SIP. Through this programme, employees have the option to purchase shares from their gross income, the cost of
which is not borne by the Group.
176 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
1 Material accounting policies continued
1.19 Share-based payments continued
Long Term Incentive Plan (‘LTIP’)
Details in relation to the Softcat LTIP awards to Executive Directors are included in the Directors’ Remuneration Report on page 139.
LTIP awards will only vest and become exercisable upon achievement of performance targets, linked to earnings per share and
total shareholder return, as well as being conditional upon continued employment with the Group. The fair value is measured
using a suitable valuation model where appropriate. Non-market vesting conditions are taken into account by adjusting the
number of LTIP shares expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of LTIP shares that will eventually vest. Market vesting conditions are factored into the fair
value of the LTIP shares granted. The cumulative expense is not adjusted for failure to meet a market vesting condition. The re sulting
fair value charge is charged as an expense in the income statement over the vesting period with a corresponding increase in equity.
Employer’s National Insurance contributions are payable, on exercise, on the market value of the award and are accrued for within
the share-based payments expense in the Consolidated statement of proﬁt or loss and other comprehensive income.
Deferred shares
One-third of the Executive Directors’ annual target bonus is paid in deferred shares. The Group accrues for the cost of the non-cash
bonus over a four-year period, including the year in which the bonus targets are assessed and the following three-year vesting
period. Employer’s National Insurance contributions are payable, on exercise, on the market value of the award and are accrued
for within the share-based payments expense in the Consolidated statement of proﬁt or loss and other comprehensive income.
1.20 Adjusted Performance Measures
The Group uses two non-Generally Accepted Accounting Practice (‘non-GAAP’) ﬁnancial measures in addition to those reported
in accordance with IFRS. The Directors believe that these non-GAAP measures, set out below, assist in providing additional usef ul
information on the underlying trends, sales performance and position of the Group. Gross invoiced income is a measure which
correlates closely to the cash received by the business and therefore aids the user’s understanding of working capital movements
in the Consolidated statement of ﬁnancial position and the relationship to sales performance and the mix of products sold.
Consequently, non-GAAP measures are used by the Directors and management for performance analysis, planning and
reporting and have remained consistent with the prior year. These non-GAAP measures comprise gross invoiced income and
cash conversion.
Gross invoiced income reﬂects gross income billed to customers adjusted for deferred and accrued revenue as reported in the
IFRS measure. A reconciliation of IFRS revenue to gross invoiced income is provided within note 2, Segmental information.
Cash conversion ratio comprises cash ﬂows from operations net of capital expenditure as a percentage of operating proﬁt.
Cash conversion is an indicator of the Group’s ability to convert proﬁts into available cash.
A reconciliation to the adjusted measure for cash conversion is provided below:

|  | 2024 | 2023
| Notes | £’000 | £’000
Net cash generated from operating activities | 19 | 115,608 | 104,802
Income taxes paid | 19 | 39,226 | 29,793
Cash generated from operations |  | 154,834 | 134,595
Purchase of property, plant and equipment | 7 | (1,115) | (2,544)
Purchase of intangible assets | 9 | (6,017) | (701)
Cash generated from operations, net of capital expenditure |  | 147,702 | 131,350
Operating proﬁt |  | 154,064 | 140,898
Cash conversion ratio |  | 95.9% | 93.2%

2 Segmental information
The information reported to the Group’s Chief Executive, who is considered to be the chief operating decision maker for the
purposes of resource allocation and assessment of performance, is based wholly on the overall activities of the Group. The Group
has therefore determined that it has only one reportable segment under IFRS 8, which is that of ‘value-added IT reseller and IT
infrastructure solutions provider’. The Group’s revenue, results and assets for this one reportable segment can be determined
by reference to the Consolidated statement of proﬁt or loss and other comprehensive income and Consolidated statement
of ﬁnancial position. An analysis of revenues by product, which form one reportable segment, is set out below:

| 2024 | 2023
Revenue by type: | £’000 | £’000
Software | 213,520 | 188,797
Hardware | 561,238 | 610,638
Services | 187,875 | 185,865
| 962,633 | 985,300

177Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
2 Segmental information continued

| 2024 | 2023
Gross invoiced income by type: | £’000 | £’000
Software | 1,807,468 | 1,543,501
Hardware | 568,450 | 617,844
Services | 476,233 | 401,963
| 2,852,151 | 2,563,308

Revenue and gross invoiced income can also be disaggregated by type of business
1
:

| 2024 | 2023
Revenue by type of business: | £’000 | £’000
Small and medium | 473,985 | 555,541
Enterprise | 298,434 | 253,229
Public sector | 190,214 | 176, 530
| 962,633 | 985,300

Note:
1. Types of business are split by entity staff size. Small and medium business represents work forces of up to 2,000 seats. En terprise is above 2,000
seats and public sector represents government and other public bodies.

| 2024 | 2023
Gross invoiced income by type of business: | £’000 | £’000
Small and medium | 1,157,007 | 1,103,851
Enterprise | 597,320 | 512,839
Public sector | 1,097,824 | 946,618
| 2,852,151 | 2,563,308

Gross invoiced income reﬂects gross income billed to customers adjusted for deferred and accrued revenue items. Softcat
continues to report gross invoiced income as an alternative ﬁnancial KPI as this measure allows a consistent, year-on-year
understanding of gross income billed, business performance and position and correlates closely to working capital movements.
The impact of IFRS 15 and principal versus agent consideration is an equal reduction to both revenue and cost of sales.

| 2024 | 2023
| £’000 | £’000
Gross invoiced income | 2,852,151 | 2,563,308
Income to be recognised as agent under IFRS 15 | (1,889,518) | (1,578,008)
Revenue | 962,633 | 985,300

The total revenue for the Group for the year has been derived from its principal activity as an IT reseller. Substantially all of this
revenue relates to trading undertaken in the United Kingdom.
3 Operating proﬁt

| 2024 | 2023
Operating proﬁt is stated after charging/(crediting): | £’000 | £’000
Depreciation of property, plant and equipment | 2,631 | 2,466
Depreciation of right-of-use assets | 2,429 | 2,127
Amortisation of intangible assets | 1,564 | 1,525
Low value asset and short-term lease expense | 57 | 83
Foreign exchange gain | (757) | (1,052)
Inventories expensed in the year | 457,426 | 515,477
Movement in trade receivables provision as potentially uncollectable, recovered or written off during the year | (798) | (1,038)
Auditor’s remuneration |  |
Fees payable for the audit of the Company’s annual accounts and consolidated annual statements | 759 | 733
Fees payable for audit-related services | — | —
Total for statutory audit services | 759 | 733
Fees payable for the half-year review of the condensed ﬁnancial statements | 45 | 42
Total for non-audit-related services | 45 | 42

For details on employee numbers and employee costs, please see note 24.
178 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
4 Finance income and ﬁnance cost

| 2024 | 2023
| £’000 | £’000
Bank interest income | 5,778 | 1,171
Lease liability interest cost | (443) | (205)

5 Income tax
The major components of the income tax expense for the years ended 31 July 2024 and 31 July 2023 are:

| 2024 | 2023
| £’000 | £’000
Consolidated statement of proﬁt or loss |  |
Current income tax charge in the year | 40,338 | 30,414
Adjustment in respect of current income tax of previous years | (465) | (160)
Foreign tax relief/other relief | (39) | —
Foreign tax suffered | 123 | —
Total current income tax charge | 39,957 | 30,254
Deferred tax |  |
Current year | (49) | (275)
Adjustments in respect of prior periods | 447 | 229
Effect of changes in tax rates | — | (373)
Deferred tax charge/(credit) | 398 | (419)
Total tax charge | 40,355 | 29,835
Reconciliation of total tax charge |  |
Reconciliation of tax expense and accounting proﬁt multiplied by the Group’s domestic tax rate for 2024 |  |
and 2023: |  |
Proﬁt on ordinary activities before taxation | 159,399 | 141,864
Proﬁt on ordinary activities before taxation multiplied by the standard rate of UK |  |
corporation tax of 25% (2023: 21%) | 39,850 | 29,791
Effects of: |  |
Non-deductible expenses | 399 | 267
Adjustment to previous periods | (19) | 69
Effect of changes in tax rates | — | (373)
Effects of overseas tax rates | 69 | 1
Share options | 56 | 74
Other differences | — | 6
| 505 | 44
Income tax charge reported in proﬁt or loss | 40,355 | 29,835

In the year ended 31 July 2024, £211,310 (2023: £159,460) of current tax was credited to equity and £29,020 (2023: £69,825 cred it)
of deferred tax was debited to equity.
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate
of 15% for large groups for ﬁnancial years beginning on or after 31 December 2023.
Based on an initial analysis, all territories in which the Group operates are expected to qualify for one of the safe harbour exemptions
such that top-up taxes should not apply. To the extent that this is not the case, there is the potential for Pillar Two taxes t o apply,
but these are not expected to be material.
179Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
6 Dividends

| 2024 | 2023
| £’000 | £’000
Declared and paid during the year |  |
Special dividend on ordinary shares (12.6p per share (2023: 12.6p)) | 25,113 | 25,122
Final dividend on ordinary shares (17.0p per share (2023: 16.6p)) | 33,965 | 33,098
Interim dividend on ordinary shares (8.5p per share (2023: 8.0p)) | 16,970 | 15,955
| 76,048 | 74,175

A ﬁnal dividend of 18. 1 p per share has been recommended by the Directors and if approved by shareholders will be paid on
17 December 2024. The ﬁnal ordinary dividend will be payable to shareholders whose names are on the register at the close
of business on 8 November 2024. Shares in the Company will be quoted ex-dividend on 7 November 2024. The dividend
reinvestment plan (‘DRIP’) election date is 26 November 2024.
In line with the Group’s stated intention to return excess cash to shareholders, a further special dividend payment of 20.9p has
been proposed. If approved, this will also be paid on 17 December 2024 alongside the ﬁnal ordinary dividend.
The Board recommends the ﬁnal and special dividend for shareholders’ approval.
Softcat’s ordinary dividend policy remains a progressive one which targets an annual dividend of between 40% and 50% of the
Group’s proﬁts after tax in each ﬁnancial year before any exceptional items. In determining the level of dividend in any year in
accordance with the policy, the Board considers a number of other factors that inﬂuence the proposed dividend, which include
but are not limited to:
• the level of available distributable reserves in the Company;
• future cash commitments and investment needs to sustain the long-term growth prospects of the business; and
• potential strategic opportunities.
Softcat’s constitution does not limit or oblige the Group to any minimum or maximum dividend payments. However, no dividend
may exceed the amount recommended by the Directors and all dividends shall be paid in accordance with any relevant legislation.
The Audit Committee on behalf of the Board reviews the distributable reserves of the Group as part of its half-year and full-year
reviews. The Board then considers the Audit Committee’s review as part of its process to approve or recommend dividends.
Softcat intends to continue to fund its dividends through the cash generated by the business. Details of the Group’s continuing
viability and going concern can be found on page 89 and pages 166 to 168 respectively.
7 Property, plant and equipment

| Freehold |  |  | Fixtures, |  |
| land and | Building | Computer | ﬁttings and | Motor |
| buildings | improvements | equipment | equipment | vehicles | Total
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Cost |  |  |  |  |  |
At 1 August 2022 | 2,649 | 8,060 | 1,940 | 4,803 | 215 | 17,667
Additions | 168 | 966 | 324 | 528 | 558 | 2,544
At 31 July 2023 | 2,817 | 9,026 | 2,264 | 5,331 | 773 | 20,211
Additions | 556 | 34 | 315 | 210 | — | 1,115
D i s p o s a l s | — | — | — | — | ( 1 0 3 ) | ( 1 0 3 )
At 31 July 2024 | 3,373 | 9,060 | 2,579 | 5,541 | 670 | 21,223
Depreciation |  |  |  |  |  |
At 1 August 2022 | 256 | 3,075 | 1,135 | 1,783 | 148 | 6,397
Charge for the year | 25 | 1,151 | 514 | 717 | 59 | 2,466
At 31 July 2023 | 281 | 4,226 | 1,649 | 2,500 | 207 | 8,863
D i s p o s a l s | — | — | — | — | ( 1 0 3 ) | ( 1 0 3 )
Charge for the year | 46 | 1,143 | 488 | 743 | 211 | 2,631
At 31 July 2024 | 327 | 5,369 | 2,137 | 3,243 | 315 | 11,391
Net book value |  |  |  |  |  |
At 31 July 2024 | 3,046 | 3,691 | 442 | 2,298 | 355 | 9,832
At 31 July 2023 | 2,536 | 4,800 | 615 | 2,831 | 566 | 11,348

Freehold land amounting to £1.4m (2023: £1.4m) has not been depreciated. No assets are subject to restrictions on title or are
pledged as security for liabilities (2023: £Nil).
180 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
8 Right-of-use assets and lease liabilities
Leases – as a lessee
Softcat has lease contracts for various ofﬁces across the country used for its operations. Property leases generally have lease terms
of between 3 and 10 years. A number of these contracts include extension and termination options which are discussed below.
Set out below are the carrying amounts of right-of-use assets recognised and movements during the year:

| 2024 | 2023
Property Leases | £’000 | £’000
Opening right-of-use asset as at 1 August | 9,969 | 6,162
Lease additions and modiﬁcations | 2,526 | 5,934
Depreciation | (2,429) | (2,127)
Closing right-of-use asset as at 31 July | 10,066 | 9,969

The weighted average incremental borrowing rate as used for the period is 3.9%.
Set out below are the carrying amounts of lease liabilities included under current and non-current liabilities and the movements
during the period:

| 2024 | 2023
Property Leases | £’000 | £’000
Opening lease liability as at 1 August | 9,761 | 6,666
Lease additions and modiﬁcations | 2,526 | 5,934
Accretion of interest | 443 | 205
Payments | (2,372) | (3,044)
Closing lease liability as at 31 July | 10,358 | 9,761
Split as: |  |
Short term | 2,253 | 2,734
Long term | 8,105 | 7,027

Lease modiﬁcations in the year were in respect of extension of speciﬁc lease terms of existing property leases.
Softcat had no variable lease expenses charged or income from sub-leases credited to the Consolidated statement of proﬁt or
loss and other comprehensive income, nor any sale and leaseback transactions.
Softcat has several lease contracts that include termination options. These options are negotiated by management to provide
ﬂexibility in managing the leased-asset portfolio to align to business needs. Management exercises signiﬁcant judgement in
determining whether these options are reasonably certain to be exercised.
As at 31 July 2024, the undiscounted potential future rental payments relating to periods following the exercise date of
termination options that are not included in the lease term were £Nil (2023: £Nil).
Following the lease modiﬁcations above, the termination options on existing property leases were no longer expected to be utilised.
The total value of lease charges for low-value and short-term leases to the Consolidated statement of proﬁt or loss and other
comprehensive income for the year was £56,811 (2023: £82,569).
181Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
9 Intangible assets

| Software |  |  |  |
| under | Computer |  |  |
| development | software |  |  | Total
| £’000 | £’000 |  |  | £’000
Cost |  |  |  |  |
At 1 August 2022 | — | 9 , 0 5 5 |  |  | 9 , 0 5 5
Additions | — | 7 0 2 |  |  | 7 0 2
At 31 July 2023 | — | 9 , 7 5 7 |  |  | 9 , 7 5 7
Additions | 3,804 | 2,213 |  |  | 6,017
At 31 July 2024 | 3,804 | 11,970 |  |  | 15,774
Amortisation |  |  |  |  |
At 1 August 2022 | — | 1 , 0 7 7 |  |  | 1 , 0 7 7
Charge for the year | — | 1 , 5 2 5 |  |  | 1 , 5 2 5
At 31 July 2023 | — | 2 , 6 0 2 |  |  | 2 , 6 0 2
Charge for the year | — | 1 , 5 6 4 |  |  | 1 , 5 6 4
At 31 July 2024 | — | 4 , 1 6 6 |  |  | 4 , 1 6 6
Net book value |  |  |  |  |
At 31 July 2024 | 3,804 | 7,804 |  |  | 11,608
At 31 July 2023 | — | 7 , 1 5 | 5 | 7 , 1 5 | 5

Software under development capitalised relates to enhancements to existing capitalised software, along with new systems being
designed and built internally. This includes the implementation of a new IT service management and customer service system.
The material asset included within computer software relates to the enterprise resource planning (ERP) system that went live in
FY2022. The net book value on this asset as at the end of the year was £6.075m (2023: £6.549m). The remaining useful economic
life is 5 years.
The amortisation of intangible assets is included in administrative expenses within the Consolidated statement of proﬁt or loss
and other comprehensive income. See note 3.
10 Inventories

| 2024 | 2023
| £’000 | £’000
Finished goods and goods for resale | 2,916 | 3,591

The amount of any write down of inventory recognised as an expense in the year was £Nil (2023: £Nil).
182 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
11 Trade and other receivables

| 2024 | 2023
| £’000 | £’000
Trade and other receivables | 504,488 | 429,569
Provision against receivables | (3,122) | (3,920)
Net trade receivables | 501,366 | 425,649
Unbilled receivables | 40,487 | 34,508
Prepayments | 6,982 | 6,344
Accrued income | 10,279 | 9,270
Deferred costs | 26,188 | 14,270
| 585,302 | 490,041

The provision against receivables follows the expected credit loss model under IFRS 9. The Directors consider that the carrying
amount of trade and other receivables approximates to their fair value.
The ageing proﬁle of trade receivables was as follows:

|  | Related |  |  | Related |
| 2024 | provision | Net | 2023 | provision | Net
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Current | 396,096 | (1,691) | 394,405 | 309,006 | (2,478) | 306,528
0–30 days | 65,936 | (416) | 65,520 | 76,269 | (396) | 75,873
31–60 days | 18,255 | (127) | 18,128 | 22,331 | (194) | 22,137
61–90 days | 12,954 | (152) | 12,802 | 11, 892 | (140) | 11,752
Over 90 days | 11,247 | (736) | 10, 511 | 10,071 | (712) | 9,358
Total due | 504,488 | (3,122) | 501,366 | 429,569 | (3,920) | 425,648

The Group provides against its trade receivables using the forward-looking expected credit loss model under IFRS 9. An impairment
analysis is performed at each reporting date. Provisions against future recoverability are set to reﬂect probability-weighted
outcomes, analysis of prior events and current conditions. Further details on how the Group manages its credit risk can be found
in note 21. Movement in the provision for trade receivables was as follows:

| 2024 | 2023
| £’000 | £’000
Balance at beginning of year | 3,920 | 4,958
Increase for trade receivables regarded as potentially uncollectable | 1,193 | 604
Decrease in provision for trade receivables recovered, or written off, during the year | (1,991) | (1,642)
Balance at end of year | 3,122 | 3,920

Set out below is the information about the credit risk exposure on Softcat’s trade receivables:

| Current | <30 days | 31–60 days | 61–90 days | >91 days | Total
31 July 2024 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Expected credit loss rate | 0.43% | 0.63% | 0.69% | 1.17% | 6.54% | 0.62%
Estimated total gross carrying amount at default | 396,096 | 65,936 | 18,255 | 12,954 | 11,247 | 504,488
Expected credit loss | (1,691) | (416) | (127) | (152) | (736) | (3,122)

| Current | <30 days | 31–60 days | 61–90 days | >91 days | Total
31 July 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Expected credit loss rate | 0.80% | 0.52% | 0.87% | 1.18% | 7.07% | 0.91%
Estimated total gross carrying amount at default | 309,006 | 76,269 | 22,331 | 11,892 | 10,071 | 429,569
Expected credit loss | (2,478) | (396) | (194) | (140) | (712) | (3,920)

Unbilled receivables and accrued income have been reviewed by management and have been determined to have an immaterial
impact on our expected credit losses. The Group does not hold collateral as security.
As part of our assessment of expected credit losses, we assess for speciﬁc potentially uncollectable debt as well as wider
macro-economic factors that may require provision. See note 21 for details on how the Group approaches its exposure to
credit risk.
183Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
12 Trade and other payables

| 2024 | 2023
| £’000 | £’000
Trade payables | 290,869 | 254,907
Other taxes and social security | 17,009 | 13,699
Accruals | 121,919 | 90,222
Other creditors | 285 | 799
| 430,082 | 359,627

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
13 Contract liabilities

| 2024 | 2023
| £’000 | £’000
Deferred income | 41,131 | 26,883

Deferred income is split as follows:

| 2024 | 2023
| £’000 | £’000
Short-term deferred income | 31,980 | 23,851
Long-term deferred income | 9,151 | 3,032
| 41,131 | 26,883

Contract balances
Deferred income includes short-term and long-term goods or services to be delivered to a customer by Softcat for which there is a
contractual obligation arising from receipt of consideration or amounts due from the customer. The outstanding balances on these
accounts have moved in line with the activity of the business and customer base. During the current year, £23.851m (2023: £31.564m)
has been recognised in revenue resulting from these contract liabilities existing as at 31 July 2023. As at 31 July 2024, £38.099m
remains on the Consolidated statement of ﬁnancial position as a contract liability resulting from transactions arising from the year
to 31 July 2024. Softcat expects that £31.980m of the balance as at 31 July 2024 will be released in FY2025 with the balance
released within two to ﬁve years of the end of FY2024.
14 Cash and cash equivalents

| 2024 | 2023
| £’000 | £’000
Cash at bank and in hand | 158,454 | 122,621

Cash and cash equivalents comprise cash at bank and cash in hand. Cash at bank earns interest at ﬂoating rates based on daily
bank deposit rates. All cash held is accessible and is not restricted for any period of time.
15 Deferred tax
The deferred tax asset is made up as follows:

| 2024 | 2023
| £’000 | £’000
Accelerated capital allowances | (572) | (313)
Share-based payments | 2,231 | 1,969
Other temporary differences | 912 | 1,341
Deferred tax assets | 2,571 | 2,997

| 2024 | 2023
| £’000 | £’000
Reconciliation of deferred tax asset |  |
Balance at 31 July 2023 (PY: 31 July 2022) | 2,997 | 2,508
Adjustment in respect of prior years | (446) | (229)
Proﬁt and loss account | 49 | 648
Credit/(charge) to equity | (29) | 70
Balance at 31 July 2024 (PY: 31 July 2023) | 2,571 | 2,997

The Group recognises all deferred tax movements in the year within the income statement, except for £29,020 (2023: £69,825 cred it)
debited to equity in relation to deferred tax movements on share-based payments.
The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current
tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authorit y.
184 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
15 Deferred tax continued

|  | 2024 |  |  |  | 2023 |
| Income |  |  |  | Income |  |
| statement | SOCIE | Total |  | statement | SOCIE | Total
| £’000 | £’000 | £’000 |  | £’000 | £’000 | £’000
Current tax |  |  |  |  |  |  |
Movement in respect of prior years | (465) | — | (465) |  | (160) | — | (160)
Movement in respect of current year | 40,422 | (211) | 40,211 |  | 30,414 | (160) | 30,254
Total current tax | 39,957 | (211) | 39,746 |  | 30,254 | (160) | 30,094
Deferred tax |  |  |  |  |  |  |
Movement in respect of prior years | — | — | — | — | — | — |
Movement in respect of current year: |  |  |  |  |  |  |
Share options | (291) | 29 | (262) |  | (458) | (70) | (528)
Fix ed assets | 260 | — | 260 |  | 408 | — | 408
Other temporary differences | 429 | — | 429 |  | (369) | — | (369)
Total deferred tax | 398 | 29 | 427 |  | (419) | (70) | (489)
Total tax | 40,355 | (182) | 40,173 |  | 29,835 | (230) | 29,605

16 Pension and other post-retirement beneﬁt commitments
Deﬁned contribution pension scheme
The Group operates a deﬁned contribution pension scheme. The assets of the scheme are held separately from those of the
Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the
fund. At the year end, pension contributions of £868,511 (2023: £738,372) were outstanding.

| 2024 | 2023
| £’000 | £’000
Contributions payable by the Group for the year | 4,422 | 3,671

17 Share capital
Authorised share capital
In accordance with the Companies Act 2006, the Company no longer has authorised share capital. The Company’s Articles
of Association have been amended to reﬂect this change.

|  | 2024 | 2023
|  | £’000 | £’000
Allotted and called up 199,764,461 | (2023: 199,555,082) ordinary shares of 0.05p each | 100 | 100
18,933 | (2023: 18,933) deferred shares of 1p each | — | —
|  | 100 | 100

Note:
At 31 July 2024 deferred shares had an aggregate nominal value of £189.33 (2023: £189.33).
In the year ended 31 July 2024, 216,014 (2023: 174,791) new ordinary shares were issued to satisfy the exercise of share options
and 28,095 ordinary shares (2023: 26,215) were issued to satisfy exercises under the Deferred Share Bonus Plan.
No issued ordinary shares of 0.05p each were unpaid at 31 July 2024 (2023: nil unpaid).
All ordinary shares rank pari passu in all respects.
Deferred shares do not have rights to dividends and do not carry voting rights.
Own share transactions
In the year ended 31 July 2024, the SIP Trust returned £Nil (2023: £Nil) to the Group through share recycling.
18 Earnings per share

| 2024 | 2023
| p | p
Earnings per share |  |
Basic | 59.7 | 56.2
Diluted | 59.4 | 56.0

185Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
18 Earnings per share continued
The calculation of the basic earnings per share and diluted earnings per share is based on the following data:

| 2024 | 2023
| £’000 | £’000
Earnings |  |
Earnings for the purposes of earnings per share, being proﬁt for the year | 119,044 | 112,029

The weighted average number of shares is given below:

| 2024 | 2023
| ’000 | ’000
Number of shares used for basic earnings per share | 199,490 | 199,237
Number of shares expected to be issued at nil consideration following exercise of share options | 1,026 | 922
Number of shares used for diluted earnings per share | 200,516 | 200,159

19 Notes to the Consolidated statement of cash ﬂows
Reconciliation of operating proﬁt to net cash inﬂow from operating activities

| 2024 | 2023
| £’000 | £’000
Operating proﬁt | 154,064 | 140,898
Depreciation of property, plant and equipment | 2,631 | 2,466
Depreciation of right-of-use assets | 2,429 | 2,127
Amortisation of intangibles | 1,564 | 1,525
Dividend equivalents paid | (98) | (66)
Cost of equity-settled employee share schemes | 3,612 | 3,330
Operating cash ﬂow before movements in working capital | 164,202 | 150,280
Decrease in inventory | 675 | 1,513
(Increase)/decrease in trade and other receivables | (95,261) | 51,383
Increase/(decrease) in trade and other payables and contract liabilities | 85,218 | (68,581)
Cash generated from operations | 154,834 | 134,595
Income taxes paid | (39,226) | (29,793)
Net cash from operating activities | 115,608 | 104,802

20 Financial commitments
Guarantees
As at the reporting date, Softcat plc has a class guarantee facility of £Nil (2023: £Nil) with HSBC UK Bank plc.
21 Financial instruments and ﬁnancial risk management
The Group’s principal ﬁnancial liabilities comprise trade and other payables and lease liabilities. The primary purpose of these
ﬁnancial liabilities is to ﬁnance the Group’s operations. The Group’s principal ﬁnancial assets comprise trade and other
receivables and cash that derive directly from its operations.
Financial assets
The ﬁnancial assets of the Group were as follows:

| 2024 | 2023
| £’000 | £’000
Cash at bank and in hand | 158,454 | 122,621
Trade and other receivables | 552,132 | 469,427
| 710,586 | 592,048

The Directors consider that the carrying amount for all ﬁnancial assets approximates to their fair value.
Financial liabilities
The ﬁnancial liabilities of the Group were as follows:

| 2024 | 2023
| £’000 | £’000
Trade payables | (290,869) | (254,907)
Accruals | (121,919) | (90,222)
Lease liabilities | (10,358) | (9,761)
| (423,146) | (354,890)

The Directors consider that the carrying amount of ﬁnancial liabilities (excluding lease liabilities) approximates to their fai r value.
186 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
21 Financial instruments and ﬁnancial risk management continued
Financial risk management
The Group is exposed to interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group’s senior management
oversees the management of these risks and ensures that the Group’s ﬁnancial risk taking is governed by appropriate policies and
procedures and that ﬁnancial risks are identiﬁed, measured and managed in accordance with Group policies and Group risk
appetite. During the year, no external debt was required and no facilities were entered.
The Board of Directors reviews and agrees the policies for managing each of these risks, which are summarised below:
Interest rate risk
Interest rate risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in
market interest rates. At the year end, the Group has no borrowings and therefore the exposure to interest rate risk is limited to
the rates received as interest income on cash deposits. The Group accepts the risk of losing interest on deposits. Due to the
limited exposure to interest rate risk, no sensitivity analysis has been prepared.
Foreign currency risk
The Group is exposed to foreign currency risk when dealing with customers and suppliers who wish to be billed in a currency
other than Pounds Sterling. As the vast majority of transactions are with UK customers and are denominated in Pounds Sterling,
the Directors consider this foreign currency risk to be small and do not hedge this risk due to the limited exposure. The level of
foreign currency transactions is monitored closely to ensure that the level of exposure is manageable.
Details of the material foreign currencies in which the Group’s trade receivables, cash and cash equivalents, and trade payables
are denominated are set out below:

| 2024 |  | 2023 |
| USD | EUR | USD | EUR
| £’000 | £’000 | £’000 | £’000
Trade receivables | 72,276 | 12,208 | 30,271 | 14,668
Cash and cash equivalents | 41,627 | 5,112 | 12,486 | 6,812
Trade payables | (78,231) | (7,076) | (31,853) | (5,405)
| 35,672 | 10,244 | 10,904 | 16,075

The following table demonstrates the proﬁt before tax sensitivity to possible changes in currency exchange rates with GBP, all
other variables held constant.

| 2024 |  | 2023 |
| USD | EUR | USD | EUR
| £’000 | £’000 | £’000 | £’000
5% increase in rate | (1,699) | (488) | (519) | (765)
5% decrease in rate | 1,877 | 539 | 574 | 846

The aggregate net foreign exchange gains recognised in the proﬁt or loss were:

| 2024 | 2023
| £’000 | £’000
Total net foreign exchange gain in proﬁt or loss | 757 | 1,052

Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a ﬁnancial instrument or customer contract, lea ding
to a ﬁnancial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and fro m
its ﬁnancing activities, including deposits with banks and ﬁnancial institutions.
Trade receivables
Credit risk from trade receivables is managed in accordance with the Group’s established policy, procedures and control relating
to customer credit risk management. A customer’s credit quality is assessed based on an extensive credit rating scorecard and
individual credit limits are deﬁned in accordance with this assessment.
Outstanding customer receivables are regularly monitored. At 31 July 2024, the Group had 2,189 customer accounts (2023: 2,151)
that owed the Group more than £25,000 each. These accounts accounted for approximately 23% (2023: 22%) of total customers
and 91% (2023: 91%) of the total value of amounts receivable. There were 800 customers (2023: 778 customers) with balances
greater than £100,000 accounting for just over 8% (2023: 8%) of the total number of receivable accounts and 77% (2023: 75%) of
the total value of amounts receivable.
The Group continues to monitor the impact of the current macro-economic environment, for example the cost of living crisis, and
how this impacts our customer base. The receivables balance continues to be well diversiﬁed and individual customers typically
represent a very small proportion of the outstanding balance.
The requirement for impairment is analysed at each reporting date. The calculation is based on actual incurred historical data and
expected credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of each class of ﬁnancial
assets. The Group does not hold collateral as security. The Group has evaluated the concentration of risk with respect to trade
receivables, as there is limited reliance on single or few customers; instead, sales are typically small in size but large in v olume
as are the number of customers; therefore, the Group considers concentration risk to be low. This is reﬂected by the fact that as
at 31 July 2024, no more than 3.8% (2023: 3.3%) of receivables are due from any one customer.
The Group provides against its trade receivables using the forward-looking expected credit loss model under IFRS 9.
187Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
21 Financial instruments and ﬁnancial risk management continued
Financial risk management continued
Financial instruments and cash deposits
Credit risk from cash balances with banks and ﬁnancial institutions is managed in accordance with Group policy. The Group has
signiﬁcant cash reserves which are accessible immediately and without restriction. Credit risk with respect to cash deposits is
managed by carefully selecting the institutions with which cash is deposited and spreading its deposits across more than one
such institution to ease concentration risk. Cash balances are only held across a number of ﬁnancial institutions and only with
ﬁnancial institutions with a credit rating at least one grade above investment grade. Credit ratings are reviewed on a regular basis.
Liquidity risk
The Group generates positive cash ﬂows from operating activities and these fund short-term working capital requirements.
The Group aims to maintain signiﬁcant cash reserves and none of its cash reserves are subject to restrictions. Access to cash is
not restricted and all cash balances could be drawn upon immediately if required. The Board carefully monitors the levels of ca sh
deposits and is comfortable that for normal operating requirements, no external borrowings are currently required.
The following table details the Group’s remaining contractual maturity for its ﬁnancial liabilities based on undiscounted
contractual payments:

| Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | Total
| £’000 | £’000 | £’000 | £’000 | £’000
2024 |  |  |  |  |
Trade payables | (290,869) | — | — | — | (290,869)
Accruals | (121,919) | — | — | — | (121,919)
Lease liabilities | (2,253) | (2,132) | (4,950) | (2,207) | (11,542)
| (415,041) | (2,132) | (4,950) | (2,207) | (424,330)
2023 |  |  |  |  |
Trade payables | (254,907) | — | — | — | (254,907)
Accruals | (90,222) | — | — | — | (90,222)
Lease liabilities | (2,734) | (2,162) | (5,060) | (1,232) | (11,188)
| (347,863) | (2,162) | (5,060) | (1,232) | (356,317)

In both the current year and the prior year, materially all of the ﬁnancial liabilities above, other than lease liabilities, have a
contractual settlement date of between zero and three months.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while also maximising the operating
potential of the business. The capital structure of the Group consists of equity attributable to equity holders of the Group,
comprising issued capital, reserves and retained earnings as disclosed in the Consolidated statement of changes in equity.
The Group is not subject to externally imposed capital requirements.
22 Capital commitments
At 31 July 2024, the Group had £Nil capital commitments (2023: £Nil).
23 Directors’ remuneration

| 2024 | 2023
| £’000 | £’000
Remuneration for qualifying services | 2,486 | 2,521
Company pension contributions to deﬁned contribution schemes | 50 | 3
| 2,536 | 2,524

During the year ended 31 July 2024, the Directors of the Group were awarded a total of 113,461 LTIP shares (2023: 107,110)
at an average exercise price of £Nil (2023: £Nil) and 18,632 shares (2023: 52,591) under the FY2017 Deferred Share Bonus Plan.
The number of Directors for whom retirement beneﬁts are accruing under deﬁned contribution schemes amounted to two
(2023: one). The number of Directors who are entitled to receive shares under long-term incentive schemes during the year was
two (2023: two).
Gains on share options exercised in the year were £1,120,841 (2023: £1,155,578).
Share-based payment charges include £1,322,926 (2023: £1,163,390) in respect of Directors.
For further information on Directors’ remuneration, please also see pages 125 to 146.
188 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
24 Employees
Number of employees
The average monthly number of employees (including Directors) during the year was:

| 2024 | 2023
| Number | Number
Sales | 1,658 | 1,415
Services | 389 | 377
Administration | 412 | 359
| 2,459 | 2,151

Employment costs

| 2024 | 2023
| £’000 | £’000
Salaries, commissions and bonus | 180,849 | 157,680
Social security costs | 22,024 | 18,535
Other pension costs | 4,422 | 3,671
Employment costs – subtotal | 207,295 | 179,886
Share option charge | 3,612 | 3,330
Total employment costs including share option charge | 210,907 | 183,216

25 Share option schemes
The Group operates a Long Term Incentive Plan (‘LTIP’) for Executive Directors and senior management and a Share Incentive Plan
(‘SIP’) for all employees.
The Group recognised the following expenses related to equity-settled share-based payment transactions:

| 2024 | 2023
| £’000 | £’000
LTIP | 3,612 | 3,330
Share option charge | 3,612 | 3,330
Employer’s National Insurance contributions payable on all plans | 820 | 464
Share option charge including employer’s National Insurance | 4,432 | 3,794

All options vest at the end of the vesting period relating to that option or on the occurrence of a contingent event. This includes
substantial sale or substantial business asset sale. If the options remain unexercised after a period of ten years from the date of
grant, the options expire. Furthermore, the vesting of these share options is dependent on continued employment.
Following the public listing of shares in the Company, share options become readily convertible assets for which the Group is
liable for employer’s National Insurance contributions. The Group accrues for National Insurance contributions on a straight-line
basis from the date of award to the vesting date.
LTIP
The LTIP provides share awards to Executive Directors and senior management.
Executive Directors
Details in relation to the Softcat LTIP awards to Executive Directors are included in the Directors’ Remuneration Report on page 139.
During the year, 113,461 (2023: 107,110) share awards related to LTIP schemes were issued to two Executive Directors at nil
exercise price with a performance period of three years. The fair value of these awards was £1,060,633 (2023: £1,082,899).
Performance conditions are linked to earnings per share and total shareholder return over the vesting period. The EPS linked
element of the LTIPs awarded in the year were valued using the Black-Scholes model and a Monte-Carlo simulation was used
for the TSR linked element of the award. The following assumptions were used to reach the below fair value:

| 31 July 2024 |  | 31 July 2023 |
| EPS | TSR | EPS | TSR
Proportion of LTIP award | 60% | 40% | 60% | 40%
Share price at grant date (£) | 12.26 | 12.26 | 12.59 | 12.59
Weighted average exercise price at grant date | — | — | — | —
Risk-free interest rate | 5.26% | 5.26% | 3.00% | 3.00%
Expected volatility | 31% | 31% | 51% | 51%
Dividend yield | —% | —% | —% | —%
Performance period (years) | 3 | 3 | 3 | 3
Fair value (£) | 12.26 | 4.98 | 12.59 | 6.40

189Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
25 Share option schemes continued
LTIP continued
Executive Directors continued
Expected volatility has been determined using historical data reﬂecting share price movements covering the ﬁnancial year.
During the year, 58,201 (2023: 70,035) LTIP options were exercised with an average weighted share price at the date of exercise
of £13.00 (2023: £11.99).
Deferred Share Bonus Plan
One-third of the Executive Directors’ annual bonus is paid in deferred shares. In the year, 42,577 (2023: 52,591) deferred shares
relating to the 2020 Deferred Share Bonus Plan were issued to one Executive Director and one former Executive Director with
a £Nil exercise price and a further vesting period of three years. The fair value is calculated using the share price on the da te
of grant and the number of shares awarded. The fair value of deferred shares issued in the year is £527,962 (2023: £726,451).
During the year, 28,095 (2023: 26,215) options arising from deferred share bonus plans were exercised with an average weighted
share price at the date of exercise of £13.00 (2023: £12.01).
Senior management
An award of 297,399 (2023: 242,263) shares was made to members of the Executive Leadership Team and other senior management
in the year. These shares had an exercise price of £Nil at the date of grant and a performance period of three years. The fair value
of these awards was £3,165,978 (2023: £2,672,247). As the exercise price of the options awarded in the year was £Nil, the charge
has been calculated by multiplying the number of shares issued by the share price on the date of grant, adjusted for an expected
forfeiture rate. The share price is the fair value of the equity instrument granted, which was £11.75 (2023: £12.59) at grant date.
The resultant fair value is then recognised over the performance period.
During the year, 107,847 shares (2023: 50,082) were forfeited as members of senior management left the business prior to
completion of the vesting period.
The weighted average remaining contractual life under the exercise period of all LTIP awards is 8.38 years (2023: 8.19 years).
Share Incentive Plan
The Group awarded free shares to its employees following the initial public offering in November 2015. Shares were allocated
to employees on the basis of length of service. Free shares awarded to an employee under the SIP were subject to a minimum
holding period of three years.
Historical employee attrition rates were used to calculate the expected number of shares expected to vest. The resulting income
statement charge was spread over the three-year vesting period with a corresponding entry in equity.
In addition, the Group’s voluntary partnership share purchase programme, which is open to all employees, is administered
through the SIP.
As at 31 July 2024, the SIP Trust held 554,092 (2023: 579,582) ordinary shares in the Company. The market value of the shares h eld
by the SIP Trust as at 31 July 2024 was £9.0m (2023: £8.7m).
The weighted average remaining contractual life of share-based payment arrangements at the year end was 1.36 years (2023: 3.36 years).
All share-based payment arrangements
The number and weighted average exercise price of all share-based payment arrangements (including LTIP) are as follows:

| Weighted average | No. of | Weighted average | No. of |  |
| exercise price | shares as at | exercise price | shares as at |  |
| £ | 31 July 2024 | £ | 31 July 2023 |  |
Outstanding at 1 August | — | 1,061,222 | — | 9 2 7 , 0 2 1 |  |
Granted during the year | — | 4 5 5 , 4 5 6 | — | 4 | 0 1 , 9 6 | 4
Forfeited during the year | — | ( 1 0 7 , 8 4 7 ) | — |  |  | ( 5 0 , 0 8 2 )
Exercised during the year | — | ( 2 7 0 , 5 7 7 ) | — |  |  | ( 2 1 7 , 6 8 1 )
Outstanding at 31 July |  | 1,138,254 |  |  |  | 1,061,222
Exercisable at 31 July |  | 183,795 |  |  |  | 241,560

The fair value of share-based payment arrangements granted in the year was £4,544,775 (2023: £4,222,307), relating entirely to
Long Term Incentive Plan awards.
The weighted average remaining contractual life of share-based payment arrangements at the year end was 7.68 years (2023: 7.43 years).
190 Softcat plc Annual Report and Accounts 2024
Notes to the consolidated ﬁnancial statements continued
For the year ended 31 July 2024
26 Post balance sheet events
Dividend
A ﬁnal dividend of 18.1p per share has been recommended by the Directors and if approved by shareholders will be paid on
17 December 2024. The ﬁnal ordinary dividend will be payable to shareholders whose names are on the register at the close
of business on 8 November 2024. Shares in the Company will be quoted ex-dividend on 7 November 2024. The dividend
reinvestment plan (‘DRIP’) election date is 26 November 2024.
In line with the Group’s stated intention to return excess cash to shareholders, a further special dividend payment of 20.9p has
been proposed. If approved, this will also be paid on 17 December 2024 alongside the ﬁnal ordinary dividend.
Contractual obligations
On 27 September 2024, the Group signed a property lease in relation to relocating the London sales hub. The right-of-use asset
and lease liability from this contract will be £17.1m.
27 Related party relationships and transactions
Transactions with key management personnel
The remuneration of key management personnel, which consists of persons who have been deemed to be discharging
managerial responsibilities, is set out below in aggregate for each of the categories speciﬁed in IAS 24 Related Party Disclosures.

| 2024 | 2023
| £’000 | £’000
Short-term employee beneﬁts | 3,098 | 2,955
Post-employment beneﬁts | 60 | 6
Key management personnel share-based payment charges | 1,524 | 1,391
| 4,682 | 4,352

Key management personnel received a total of 151,307 share awards (2023: 177,283) at a weighted average exercise price of £Nil
(2023: £Nil).
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel.
Dividends to Directors and former Directors

| 2024 | 2023
| £’000 | £’000
M Hellawell | — | 1,563
G Watt | 44 | 32
G Charlton | 53 | 44
R Perriss | 6 | 6
V Murria | 63 | 62
K Mecklenburgh | — | —
J Ferguson | — | —
M Prakash | — | —
L Weedall | — | —
| 166 | 1,707

Katy Mecklenburgh started on 19 June 2023.
Jacqui Ferguson became a Non-Executive Director on 1 January 2024.
Mayank Prakash became a Non-Executive Director on 1 September 2023.
Martin Hellawell resigned as Non-Executive Chairman on 31 July 2023.
191Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
Notes
2024
£’000
2023
£’000
Non-current assets
Property, plant and equipment D 9,654 11,348
Right-of-use assets E
9,991 9,969
Intangible assets F
11,608 7,155
Investment in subsidiaries Q 1,752 —
Deferred tax asset C 2,571 2,997
35,576 31,469
Current assets
Inventories G 2,916 3,591
Trade and other receivables H 576,409 490,041
Cash and cash equivalents K 156,180 122,621
735,505 616,253
Total assets 771,081 647,722
Current liabilities
Trade and other payables I (420,539) (359,627)
Contract liabilities J (31,904) (23,851)
Income tax payable
(1,141) (6)
Lease liabilities E
(2,204) (2,734)
(455,788) (386,218)
Non-current liabilities
Contract liabilities J (9,151) (3,032)
Lease liabilities E (8,105) (7,027)
(17,256) (10,059)
Total liabilities (473,044) (396,277)
Net assets 298,037 251,445
Equity
Issued share capital M 100 100
Share premium account 4,979 4,979
Cash ﬂow hedge reserve
(285) (799)
Foreign exchange translation reserve
2,763 3,358
Retained earnings 290,480 243,807
Total equity 298,037 251,445
As permitted by Section 408 of the Companies Act 2006, the Company’s Statement of proﬁt or loss has not been included
inthese ﬁnancial statements.
The Company generated a proﬁt for the year to 31 July 2024 of £119.0m (2023: £112.0m).
Dividend payments are disclosed in notes 6 and 26 to the consolidated ﬁnancial statements.
The notes on pages 191 to 198 are an integral part of these ﬁnancial statements.
The ﬁnancial statements on pages 191 to 198 were approved by the Board of Directors and authorised for issue on 23 October 2024.
On behalf of the Board
Graham Charlton Katy Mecklenburgh
Chief Executive Ofﬁcer Chief Financial Ofﬁcer
Softcat plc company registration number: 02174990
Company statement of ﬁnancial position
As at 31 July 2024
192 Softcat plc Annual Report and Accounts 2024
Equity attributable to owners of the Company
Share
capital
£’000
Share
premium
account
£’000
Cash ﬂow
hedge reserve
£’000
Foreign
exchange
translation
reserve
£’000
Retained
earnings
£’000
Total
£’000
Balance at 1 August 2022 100 4,979 — 3,562 202,459 211,100
P r o ﬁ t f o r t h e y e a r ————1 1 2,0 2 9 1 1 2,0 2 9
Impact of foreign exchange on reserves — — — (204) — (204)
Net loss on cash ﬂow hedge — — (799) — — (799)
Total comprehensive income for the year — — (799) (204) 112,029 111,026
S h a r e-b a s e d p a y m e n t t r a n s a c t i o n s ————3,3 3 0 3,3 3 0
D i v i d e n d s p a i d ————(7 4,1 7 5)(7 4,1 7 5)
D i v i d e n d e q u i v a l e n t s p a i d ————(6 6)(6 6)
T a x a d j u s t m e n t s ————2 3 0 2 3 0
Balance at 31 July 2023 100 4,979 (799) 3,358 243,807 251,445
P r o ﬁ t f o r t h e y e a r ————1 1 9,0 2 0 1 1 9,0 2 0
Impact of foreign exchange on reserves — — — (595) — (595)
Net gain on cash ﬂow hedge — — 514 — — 514
Total comprehensive income for the year — — 514 (595) 119,020 118,939
S h a r e-b a s e d p a y m e n t t r a n s a c t i o n s ————3,6 1 2 3,6 1 2
D i v i d e n d s p a i d ————(7 6,0 4 8)(7 6,0 4 8)
D i v i d e n d e q u i v a l e n t s p a i d ————(9 8)(9 8)
T a x a d j u s t m e n t s ————1 8 2 1 8 2
O t h e r ————5 5
Balance at 31 July 2024 100 4,979 (285) 2,763 290,480 298,037
The share capital and share premium accounts represent the nominal value and premium arising on the issue of equity shares.
The reserve for own shares refers to ordinary shares held by a Share Incentive Plan (‘SIP’) Trust.
During the year ended 31 July 2024, 244,109 share options (2023: 174,791) were exercised and new shares were issued to satisfy
this exercise. Proceeds of £Nil (2023: £Nil) were realised from the exercise of these share options.
As at 31 July 2024, the SIP Trust held 133,538 shares (2023: 159,996) awarded to employees as part of the free share award,
subject to service conditions. A further 369,513 shares (2023: 368,545) were held on behalf of employees who have taken part
inthe Group’s voluntary partnership share purchase programme. The SIP also held 51,041 unallocated shares (2023: 51,041).
Company statement of changes in equity
For the year ended 31 July 2024
193Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
A. Accounting policies
A.1. Corporate information
The ﬁnancial statements of Softcat plc (the ‘Company’) for the year ended 31 July 2024 were authorised for issue in accordance
with a resolution of the Directors on 23 October 2024.
Softcat plc is a public limited company incorporated and domiciled in England and Wales and whose shares are publicly traded.
The registered ofﬁce is Solar House, Fieldhouse Lane, Marlow, Buckinghamshire, SL7 1LW, in the United Kingdom.
The principal activity of the Company continued to be that of a value-added IT reseller and IT infrastructure solutions provider to
the corporate and public sector markets.
The Directors of the Group manage the Group’s risks at a Group level, rather than at an individual entity level. These risks ar e
detailed in note 21 of the Group’s ﬁnancial statements (see pages 185 to 187).
A.2. Basis of preparation
From 1 August 2023, the Company, which previously prepared its ﬁnancial statements in accordance with IFRS, has elected to
prepare its ﬁnancial statements in accordance with the Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’)
in order to take advantage of the available disclosure exemptions. The relevant recognition and measurement criteria of FRS 101
are the same as those within IFRS, but with reduced disclosure requirements. Accordingly, there have been no restatements to
theﬁnancial statements of the Company in the year ended 31 July 2023 as a result of the change to FRS 101.
The Company’s ﬁnancial statements are included in the Softcat plc (the ‘Group’) consolidated ﬁnancial statements for the period
ended 31 July 2024.
The following disclosure exemptions from the requirements of IFRS have been applied in the preparation of the Company
ﬁnancial statements, in accordance with FRS 101:
• The requirements of IFRS 7 Financial Instruments Disclosures
• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment
• The requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement
• The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect
of paragraph 79(a)(iv) of IAS 1 and paragraph 73(e) of IAS 16 and paragraph 118(e) of IAS 38
• The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136 of IAS 1
Presentation of Financial Statements
• The requirements of IAS 7 Statement of Cash Flows
• The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
• The requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures
• The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more
members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
• The requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets,
provided that equivalent disclosures are included in the consolidated ﬁnancialstatements of the group in which the entity
isconsolidated
• The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and
129 of IFRS 15 Revenue from Contracts with Customers
• The requirements of IFRS 16 Leases paragraph 52 and 58, the second sentence of paragraph 89 and paragraphs 90, 91 and 93
of IFRS 16 Leases
Where required, equivalent disclosures are given in the consolidated ﬁnancial statements of Softcat plc.
SIP Trust
The Company operates an SIP Trust for the beneﬁt of eligible employees. The Company recognises the assets and liabilities of
this trust asitsown until such assets held vest unconditionally with identiﬁed beneﬁciaries. The Company meets all costs incu rred
bythe trust. The SIP Trust is treated as an extension of the Company and included in these Company accounts.
Notes to the Company ﬁnancial statements
194 Softcat plc Annual Report and Accounts 2024
B. Auditor’s remuneration
2024
£’000
2023
£’000
Fees payable for audit-related services 759 733
Total for statutory audit services 759 733
Fees payable for the half-year review of the condensed ﬁnancial statements
45 42
Total for non-audit-related services 45 42
C. Income tax
The Company recognises all deferred tax movements in the year within the income statement, except for £29,020 (2023: £69,825
credit) debited to equity in relation to deferred tax movements on share-based payments.
Deferred tax
The deferred tax asset is made up as follows:
2024
£’000
2023
£’000
Accelerated capital allowances (572) (313)
Share-based payments
2,231 1,969
Other temporary differences 912 1,341
Deferred tax assets 2,571 2,997
2024
£’000
2023
£’000
Reconciliation of deferred tax asset
Balance at 31 July 2023 (PY: 31 July 2022) 2,997 2,508
Adjustment in respect of prior years (446) (229)
Proﬁt and loss account 49 648
Credit/(charge) to equity (29) 70
Balance at 31 July 2024 (PY: 31 July 2023) 2,571 2,997
D. Property, plant and equipment
Freehold
land and
buildings
£’000
Building
improvements
£’000
Computer
equipment
£’000
Fixtures,
ﬁttings and
equipment
£’000
Motor
vehicles
£’000
Total
£’000
Cost
At 1 August 2023 2,817 9,026 2,264 5,331 773 20,211
A d d i t i o n s 5 5 6 3 4 3 1 5——9 0 5
D i s p o s a l s ————(1 0 3)(1 0 3)
At 31 July 2024 3,373 9,060 2,579 5,331 670 21,013
Depreciation
At 1 August 2023 281 4,226 1,649 2,500 207 8,863
Charge for the year 46 1,134 488 720 211 2,599
D i s p o s a l s ————(1 0 3)(1 0 3)
At 31 July 2024 327 5,360 2,137 3,220 315 11,359
Net book value
At 31 July 2024 3,046 3,700 442 2,111 355 9,654
At 31 July 2023 2,536 4,800 615 2,831 566 11,348
Freehold land amounting to £1.4m (2023: £1.4m) has not been depreciated. No assets are subject to restrictions on title or are
pledged as security for liabilities (2023: £Nil).
Notes to the Company ﬁnancial statements continued
195Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
E. Right-of-use assets and lease liabilities
Property Leases
2024
£’000
2023
£’000
Opening right-of-use asset as at 1 August 9,969 6,162
Lease additions and modiﬁcations 2,290 5,934
Depreciation (2,268) (2,127)
Closing right-of-use asset as at 31 July 9,991 9,969
Property Leases
2024
£’000
2023
£’000
Opening lease liability as at 1 August 9,761 6,666
Lease additions and modiﬁcations 2,348 5,934
Accretion of interest
435 205
Payments (2,235) (3,044)
Closing lease liability as at 31 July 10,309 9,761
Split as:
Short term 2,204 2,734
Long term 8,105 7,027
F. Intangible assets
Software
under
development
£’000
Computer
software
£’000
Total
£’000
Cost
At 1 August 2022 —9,0 5 59,0 5 5
Additions —7 0 27 0 2
Reclassiﬁcations ———
At 31 July 2023 —9,7 5 79,7 5 7
Additions 3,804 2,213 6,017
Reclassiﬁcations ———
At 31 July 2024 3,804 11,970 15,774
Amortisation
At 1 August 2022 —1,0 7 71,0 7 7
Charge for the year —1,5 2 51,5 2 5
At 31 July 2023 —2,6 0 22,6 0 2
Charge for the year —1,5 6 41,5 6 4
At 31 July 2024 —4,1 6 64,1 6 6
Net book value
At 31 July 2024 3,804 7,804 11,608
At 31 July 2023 —7,1 5 57,1 5 5
Software under development capitalised relates to enhancements to existing capitalised software, along with new systems being
designed and built internally. This includes the implementation of a new IT service management and customer service system.
Please refer to Note 9 of the Group notes to the consolidated ﬁnancial statements for details of material assets included within
intangible assets.
G. Inventories
2024
£’000
2023
£’000
Finished goods and goods for resale 2,916 3,591
The amount of any write down of inventory recognised as an expense in the year was £Nil (2023: £Nil).
196 Softcat plc Annual Report and Accounts 2024
H. Trade and other receivables
2024
£’000
2023
£’000
Trade and other receivables 493,850 429,569
Provision against receivables (3,122) (3,920)
Net trade receivables
490,728 425,649
Amounts owed from Group undertakings
1,913 —
Unbilled receivables
40,332 34,508
Prepayments 6,973 6,344
Accrued income 10,279 9,270
Deferred costs 26,184 14,270
576,409 490,041
The provision against receivables follows the expected credit loss model under IFRS 9. The Directors consider that the carrying
amount oftrade and other receivables approximates to their fair value.
I. Trade and other payables
2024
£’000
2023
£’000
Trade payables 288,668 254,907
Other taxes and social security
16,978 13,699
Accruals 114,608 90,222
Other creditors 285 799
420,539 359,627
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
J. Contract liabilities
2024
£’000
2023
£’000
Deferred income 41,055 26,883
Deferred income is split as follows:
2024
£’000
2023
£’000
Short-term deferred income 31,904 23,851
Long-term deferred income
9,151 3,032
41,055 26,883
K. Cash and cash equivalents
2024
£’000
2023
£’000
Cash at bank and in hand 156,180 122,621
Cash and cash equivalents comprise cash at bank and cash in hand. Cash at bank earns interest at ﬂoating rates based on daily
bank deposit rates. All cash held is accessible and is not restricted for any period of time.
L. Pension and other post-retirement beneﬁt commitments
Deﬁned contribution pension scheme
The Company operates a deﬁned contribution pension scheme. The assets of the scheme are held separately from those of the
Company in an independently administered fund. The pension cost charge represents contributions payable by the Company
tothe fund. At the year end, pension contributions of £867,236 (2023: £738,372) were outstanding.
2024
£’000
2023
£’000
Contributions payable by the Company for the year 4,414 3,671
Notes to the Company ﬁnancial statements continued
197Annual Report and Accounts 2024 Softcat plc
Financial statements Governance Strategic report
M. Share capital
Authorised share capital
In accordance with the Companies Act 2006, the Company no longer has an authorised share capital. The Company’s Articles
ofAssociation have been amended to reﬂect this change.
2024
£’000
2023
£’000
Allotted and called up
199,764,461 (2023: 199,555,082 ) ordinary shares of 0.05p each 100 100
18,933 (2023: 18,933) deferred shares1 of 1p each — —
100 100
Note:
At 31 July 2024 deferred shares had an aggregate nominal value of £189.33 (2023: £189.33).
In the year ended 31 July 2024, 216,014 (2023: 174,791) new ordinary shares were issued to satisfy the exercise of share option s
and 28,095 ordinary shares (2023: 26,215) were issued to satisfy exercises under the Deferred Share Bonus Plan.
No issued ordinary shares of 0.05p each were unpaid at 31 July 2024 (2023: nil unpaid).
All ordinary shares rank pari passu in all respects.
Deferred shares do not have rights to dividends and do not carry voting rights.
Own share transactions
In the year ended 31 July 2024, the SIP Trust returned £Nil (2023: £Nil) to the Company through share recycling.
N. Financial commitments
Guarantees
As at the reporting date, Softcat plc has a class guarantee facility of £Nil (2023: £Nil) with HSBC UK Bank plc.
O. Capital commitments
At 31 July 2024, the Company had £Nil capital commitments (2023: £Nil).
P. Employees
Number of employees
The average monthly number of employees (including Directors) during the year was:
2024
Number
2023
Number
Sales 1,653 1,415
Services 386 377
Administration 410 359
2,449 2,151
Employment costs
2024
£’000
2023
£’000
Salaries, commissions and bonus 180,593 157,680
Social security costs 21,998 18,535
Other pension costs 4,414 3,671
Employment costs – subtotal 207,005 179,886
Share option charge
3,612 3,330
Total employment costs including share option charge
210,617 183,216
Details of Directors’ remuneration are provided within the Group Directors’ Remuneration Report. The Directors’ Remuneration
Report, on pages 125 to 146, includes details on salary, beneﬁts, pension and share plans. These disclosures form part of the
ﬁnancial statements.
198 Softcat plc Annual Report and Accounts 2024
Q. Investment in subsidiaries
2024
£’000
2023
£’000
Opening investment 169 —
Capital contribution 1,583 —
1,752 —
R. Related parties
Details of Directors’ emoluments and interests are provided within the Group Directors’ Remuneration Report. The Directors’
Remuneration Report, on pages 125 to 146, includes details on salary, beneﬁts, pension and share plans. These disclosures form
part of the ﬁnancial statements.
S. Subsidiary undertakings
The registered address and principal place of business of each subsidiary undertaking are shown in the footnotes below the
table. The ﬁnancial performance and ﬁnancial position of these undertakings have been consolidated in the consolidated
ﬁnancial statements.
Nature of Investment
Name Country of registration Class of share capital Direct Indirect Nature of business
Softcat US (Holdings) Inc
1
USA Ordinary 100% — Management company
Softcat US LLC
1
USA Ordinary — 100% Trading
1. 1300 N 17th Street, Suite 1020, Arlington, VA 22209-3803.
T. Information included in the notes to the consolidated ﬁnancial statements
Some of the information included in the notes to the consolidated ﬁnancial statements is directly relevant to the ﬁnancial
statements of the Company. Please refer to the following:
6 Dividends
25 Share option schemes
26 Post balance sheet events
Notes to the Company ﬁnancial statements continued
Company number 02174990
Registered ofﬁce
Softcat plc
Solar House
Fieldhouse Lane
Marlow
Buckinghamshire
SL7 1LW
United Kingdom
Tel: 01628 403 403
Website
www.softcat.com
Directors
Graeme Watt (Non-Executive Chairman)
Graham Charlton (CEO)
Katy Mecklenburgh (CFO)
Jacqui Ferguson (Senior Independent NED)
Robyn Perriss (Independent NED)
Vin Murria OBE (Independent NED)
Lynne Weedall (Independent NED)
Mayank Prakash (Independent NED)
Company Secretary
Luke Thomas
Investor relations contact
investors@softcat.com
Softcat LEI
213800N42YZLR9GLVC42
Registrar
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
enquiries@linkgroup.co.uk
Tel: 0371 664 0300
Calls are charged at the standard geographic rate and will vary
by provider. Calls outside the United Kingdom will be charged
at the applicable international rate. Lines are open between
09:00 and 17:30, Monday to Friday excluding public holidays in
England and Wales.
Corporate advisers
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
Joint corporate broker
J.P. Morgan Securities plc
25 Bank Street
London E14 5JP
Numis Securities Limited
45 Gresham Street
London EC2V 7BF
Legal advisers
Ashurst LLP
London Fruit & Wool Exchange
1 Duval Square
London E1 6PW
Company information and contact details
Softcat plc’s commitment to environmental issues is reﬂected in this Annual Report, which
has been printed on Arena Extra White Smooth, an FSC® certiﬁed material.
This document was printed by Pureprint Group using its environmental print technology,
with 99% of dry waste diverted from landﬁll, minimising the impact ofprinting on the
environment. The printer is a CarbonNeutral® company.
Both the printer and the paper mill are registered to ISO 14001.
Softcat plc
Fieldhouse Lane
Marlow
Buckinghamshire SL7 1LW
Tel: 01628 403 403
www.softcat.com