Evolutio

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

onpages 2 and 3

Evolved for

success

onpages 22 and 23

Leading the

evolution

onpages 12 to 15

1Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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

iew more on

For more

informationvisit:

www.softcat.com

Sustained performance

Gross proﬁt £m

£417.8

417.8

373.8

327.2

276.4

235.7

Operating proﬁt £m

£154.1

154.1

140.9

136.1

119.4

93.7

Customer base ’000

10.3

10.1

9.9

9.7

9.5

Gross invoiced income £m

£2,852.2

2,852.2

2,563.3

2,507.5

1,938.4

1,646.2

Cash conversion %

95.9

93.2

76.2

89.9

88.0

Revenue £m

£962.6

962.6

985.3

1,077.9

784.0

Gross proﬁt per customer £’000

£40.6

40.6

37.0

33.0

28.4

24.8

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

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

2002

3Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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

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 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 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.

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 how we engage with our

stakeholders onpages 42 to 49

Chairman’s statement

9Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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 statementsGovernanceStrategic 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.

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

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 ahead.

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 statementsGovernanceStrategic report

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.

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

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.

‘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 statementsGovernanceStrategic report

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

Our employees

Our customers

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 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 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 statementsGovernanceStrategic 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

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 some

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

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 statementsGovernanceStrategic 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 delays 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 statementsGovernanceStrategic 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

962.6

Gross invoiced income £m

2,852.2

962.6

2,852.2

985.3

2,563.3

1,077.9

2,507.5

784.0

1,938.4

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 %

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

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

• 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

• 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

37Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic report

Non-ﬁnancial

Employee engagement score %

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

• 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 %

Link to strategy:

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

• 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

37.0

33.0

28.4

24.8

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

10.1

9.9

9.7

9.5

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.

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 statementsGovernanceStrategic 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

£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

14.6% 14.6% — pts

Operating proﬁt £154.1m £140.9m 9.3%

Operating proﬁt margin

5.4% 5.5% (0.1) pts

Gross proﬁt per customer

£40.6k £37.0k 9.7%

Customer base

10.3k 10.1k 1.8%

Cash conversion

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.

FY2024

FY2023 Change

FY2024

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 statementsGovernanceStrategic 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.

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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page 53

51Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

2,315

1,921

1,681

1,534

1,330

1,188

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 statementsGovernanceStrategic 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.

Best Workplaces™

2024 (Super Large)

Best Workplaces™

for Wellbeing 2024

(Super Large)

Best Workplaces™

for Development

2024 (Super Large)

Best Workplaces™

for Women 2024

(Super Large)

57Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

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

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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

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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 statementsGovernanceStrategic 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

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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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

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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 statementsGovernanceStrategic 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 Board.

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 years

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 statementsGovernanceStrategic 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

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 commits 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 statementsGovernanceStrategic 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 CRN

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 statementsGovernanceStrategic 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

e/£m 0.14 0.22 0.21 0.20 0.30 0.51

tCO

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

2.59

2.75

1.79

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

96 0 96

342

563

386

184 158

229 334

82 304

Key: Scope 1 Scope 2

Scope 3 emissions

tCO

e ’000

366

357

383

249

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 statementsGovernanceStrategic 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 across 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 strong

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.

Business strategy

Risks which have the potential to impede

the achievement of our strategic goals

orimpact our business model.

Operational

Risks (both external and internal) that

could impact day-to-day operations and

prevent business-as-usual activities.

Financial

Risks that could impact the proﬁtability

or ﬁnancial viability of the Group

orincrease economic exposure.

People

Risks that could impact our ability

toattract, retain and motivate the

verybest employees.

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 statementsGovernanceStrategic 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

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 statementsGovernanceStrategic 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

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 statementsGovernanceStrategic 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

Introduction to corporategovernance

Governance report

Board leadership and Companyfocus

91Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic 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 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 statementsGovernanceStrategic report

Board leadership and Company focus

Your Board of Directors

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:

Graeme Watt

Non-Executive Chairman

Appointed to the Board:

1 April 2018 (and became

Chairon 1 August 2023)

Committee membership:

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.

Graham Charlton

Chief Executive Ofﬁcer

Appointed to the Board:

19 March 2015 (and became

CEOon 1 August 2023)

Committee membership:

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.

Katy Mecklenburgh

Chief Financial Ofﬁcer

Appointed to the Board:

19 June 2023

Committee membership:

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.

Jacqui Ferguson

Senior Independent

Non-Executive Director

Appointed to the Board:

1 January 2024

Committee membership:

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

Audit Committee

Nomination Committee

Remuneration Committee

Disclosure Committee

Sustainability Committee

Chair

95Annual Report and Accounts 2024 Softcat plc

Financial statementsGovernanceStrategic report

Vin Murria OBE

Independent Non-Executive

Director and Designated NED

for Workforce Engagement

Appointed to the Board:

3 November 2015

Committee membership:

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.

Robyn Perriss

Independent

Non-Executive Director

Appointed to the Board:

1 July 2019

Committee membership:

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.

Lynne Weedall

Independent

Non-Executive Director

Appointed to the Board:

3 May 2022

Committee membership:

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.

Mayank Prakash

Independent

Non-Executive Director

Appointed to the Board:

1 September 2023

Committee membership:

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

Audit Committee

Nomination Committee

Remuneration Committee

Disclosure Committee

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

Meetings held 75332

Meetings attended

Graeme Watt

7—3—2

Graham Charlton

7———2

Katy Mecklenburgh

7———2

Vin Murria 75332

Robyn Perriss 75332

Lynne Weedall 75332

Mayank Prakash 75332

Jacqui Ferguson

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 statementsGovernanceStrategic 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 material

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 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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

Oversight and Compliance Committee)

monitors use of the gifts and hospitality

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

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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’.

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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

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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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 337.5% 2 7 63.6%

Women 5 62.5% 2 4 36.4%

Not speciﬁed/prefer not to say ———— —

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%

Mixed/multiple ethnic groups ———— —

Asian/Asian British 2 25% — — —

Black/African/Caribbean/Black British — — — 1 9.1%

Other ethnic group, including Arab ———— —

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 various

inclusion activities. More information about diversity, equality and inclusion in the business can be found in the report on social

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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attract

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 philosophy. 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 statementsGovernanceStrategic 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 77.5%£660,611 £430,369

Portion of overall

outcome paid in cash

£378,630 £246,667

Portion of overall

outcome deferred

intoshares

£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 statementsGovernanceStrategic 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

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 period.

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)

£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 statementsGovernanceStrategic 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 Annual

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%

976

26%

37%

1,548

22%

31%

47%

1,834

405

41%

29%

1,496

26%

37%

2,374

22%

31%

47%

2,812

619

2,800

2,400

2,000

1,600

1,200

£’000

800

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

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

Salary, beneﬁts and pension Included Included Included Included

Annual

bonus

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 statementsGovernanceStrategic 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

Pension Total ﬁxed

Bonus

2,4

LTIP

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)

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)

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 respective

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

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

£236,345 — Chairman

M Hellawell

— £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

£56,650 — Independent Non-Executive Director

J Ferguson

£39,425 — Senior Independent Director

R Perriss £76,800 £75,000 Independent Non-Executive Director and Chair of the Audit Committee

K Slatford

— £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. Options

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 statementsGovernanceStrategic 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

price

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

price

G Watt

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

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 statementsGovernanceStrategic report

Statement of Directors’ shareholding and share interests (audited)

Other shares held

Options

Shareholding

requirement

met? Director

Shareholding

requirement

(% of salary)

Current

shareholding

(% of salary)

Beneﬁcially

owned

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

139,735 52,303

———Yes

K Mecklenburgh

200 5 79 44,758 2,019

———No

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

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

— £1,837,361 £2,867,134 £2,588,093 £991,372 £919,518 £305,539 — —

M Hellawell

— — — — — — £532,716 £774,908 £562,117

G Charlton Annual bonus

payment level

achieved

(%ofmaximum

opportunity)

78 ————————

G W

att

— 83 96 100 72 100 100 — —

M Hellawell

— —————10010099

G Charlton LTIP vesting

levelachieved

(%of maximum

opportunity)

92 ————————

G W

att

— 97 100 100 n/a n/a n/a n/a n/a

M Hellawell

— — 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

rom proﬁt in 2023

ﬁnancial year

Proﬁt distributed by way of dividend £76.0m £74.2m

Total tax contributions

£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 statementsGovernanceStrategic 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

Beneﬁts

Salary or

fees Bonus

Beneﬁts

Graeme Watt

3% 12% 0% 3% 43% 37%

Graham Charlton

3% 12% (9)% 3% 43% 37%

Martin Hellawell 3% 0% 1% 0% 0% 1%

Vin Murria

23% 0% 0% 4% 0% 0%

Robyn Perriss 0%0%0% 3%0%0%

Karen Slatford

n/a n/a n/a 6% 0% 0%

Lynne Weedall

n/a n/a n/a n/a n/a n/a

All employees

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

Beneﬁts

Salary or

fees Bonus

Beneﬁts

Salary

or fees Bonus

Beneﬁts

Graeme Watt

10% 6% 12% 5% (9)% (1)% (57)% — (5)%

Graham Charlton

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

(7)% — — 18% — — 2%——

Robyn Perriss 3% — — 18% — — 2%——

Karen Slatford

11% — — 12% — — n/a n/a n/a

Lynne Weedall

n/a n/a n/a 42% — — 13%——

Mayank Prakash

n/a n/a n/a n/a n/a n/a n/a——

Jacqui Ferguson

n/a n/a n/a n/a n/a n/a n/a——

All employees

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 FY2022. 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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 ‘Articles’).

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 statementsGovernanceStrategic 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

rdinary

Voting

rights

Peter Kelly

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 statementsGovernanceStrategic 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

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 statementsGovernanceStrategic 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 year

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 ended

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

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 statements

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 statementsGovernanceStrategic 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 statementsGovernanceStrategic 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 ﬁnancial

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).

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 management’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 statementsGovernanceStrategic 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 ﬁnancial

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 that

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 ﬁnancial 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 meets

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 statementsGovernanceStrategic 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 our

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 assume

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 statementsGovernanceStrategic 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
Proﬁt for the year	—	—	—	—	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
Share-based payment transactions	—	—	—	—	3,330	3,330
Dividends paid	—	—	—	—	(74,175)	(74,175)
Dividend equivalents paid	—	—	—	—	(66)	(66)
Tax adjustments	—	—	—	—	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
Proﬁt for the year	—	—	—	—	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
Share-based payment transactions	—	—	—	—	3,612	3,612
Dividends paid	—	—	—	—	(76,048)	(76,048)
Dividend equivalents paid	—	—	—	—	(98)	(9 8)
Tax adjustments	—	—	—	—	182	182
Other	—	—	—	—	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 statementsGovernanceStrategic 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 1LW, 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 statements 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

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

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 concern

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.

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 the

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 statementsGovernanceStrategic 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 making

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 investee);

• 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 statementsGovernanceStrategic 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 standards.

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

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 transferred

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 recognised

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, or

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 the speciﬁed

goods or service; (ii) inventory risk before the speciﬁed good or service has been transferred to a customer; and (iii) discretion 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 satisﬁed

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

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

roducts are recognised on a gross basis as the Group is acting as a principal in these transactions, with the gross value of the

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 provision

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 partners

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 transaction

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 statementsGovernanceStrategic 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 delivery

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 yet

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 liability.

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 the 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

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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 ability to

run the software independently of the host vendor. In such cases, the licence agreement is capitalised as software within intangible

assets. Costs to conﬁgure or customise a cloud software licence are expensed alongside the related service contract in the Group’s

income statement, unless they create a separately identiﬁable resource controlled by the Group, in which case they are capitalised.

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 time 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 lease

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 the

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 recognised

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 receivables

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 ﬁnancial

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 goods 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 ownership

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

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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 asset 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 transaction.

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 shares

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 resulting

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 useful

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

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Financial statementsGovernanceStrategic 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

	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. Enterprise 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 credit)

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 to apply,

but these are not expected to be material.

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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. 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.

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).

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Financial statementsGovernanceStrategic 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.

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Financial statementsGovernanceStrategic 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 credit)

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 authority.

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

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Financial statementsGovernanceStrategic 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 fair 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, leading

to a ﬁnancial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from

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 volume

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 statementsGovernanceStrategic 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 cash

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 statementsGovernanceStrategic 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 date

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 held

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 statementsGovernanceStrategic 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

capital

£’000

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

Proﬁt for the year ————112,029112,029

Impact of foreign exchange on reserves — — — (204) — (204)

Net loss on cash ﬂow hedge — — (799) — — (799)

Total comprehensive income for the year — — (799) (204) 112,029 111,026

Share-based payment transactions ————3,3303,330

Dividends paid ————(74,175)(74,175)

Dividend equivalents paid ————(66)(66)

Tax adjustments ————230230

Balance at 31 July 2023 100 4,979 (799) 3,358 243,807 251,445

Proﬁt for the year ————119,020119,020

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

Share-based payment transactions ————3,6123,612

Dividends paid ————(76,048)(76,048)

Dividend equivalents paid ————(98)(98)

Tax adjustments ————182182

Other ————55

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 statementsGovernanceStrategic 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 are

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 incurred

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

Additions 55634315——905

Disposals ————(103)(103)

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

Disposals ————(103)(103)

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 statementsGovernanceStrategic 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 —9,0559,055

Additions —702702

Reclassiﬁcations ———

At 31 July 2023 —9,7579,757

Additions 3,804 2,213 6,017

Reclassiﬁcations ———

At 31 July 2024 3,804 11,970 15,774

Amortisation

At 1 August 2022 —1,0771,077

Charge for the year —1,5251,525

At 31 July 2023 —2,6022,602

Charge for the year —1,5641,564

At 31 July 2024 —4,1664,166

Net book value

At 31 July 2024 3,804 7,804 11,608

At 31 July 2023 —7,1557,155

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 statementsGovernanceStrategic 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 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 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

USA Ordinary 100% — Management company

Softcat US LLC

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