Softcat delivers 30% organic growth for Financial Year 2013

Posted on Tuesday, April 15, 2014
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By The Softcat News Team


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Today Softcat posts its full audited financial results for the financial year ending 31 July 2013.
The IT infrastructure provider is pleased to report on another year of strong progress. Revenues reached £395.8m, 30% up on the previous financial year. Gross profit grew 25% year-on-year, in line with growth in operating expenditure of 27%, resulting in ?28.2m normalised operating profit. This represents an increase of 22% on the previous year and a 7.1% return on sales.

In the last three financial years alone Softcat has increased turnover by 172% from £145.8m to £395.8m and operating profit has increased 174% in the same period, representing 40% CAGR (Compound Annual Growth Rate) for both metrics. This has been achieved entirely organically and against the backdrop of an industry showing low single digit growth figures for the period.

Softcat’s growth has largely been achieved by maintaining and growing its existing accounts, by continually developing its offering and by winning large numbers of new accounts. In the last financial year the company traded with a record 1,750 new accounts, which bodes well for the future as it expects business levels from these customers to grow significantly over time as these relationships deepen, in the same pattern we’ve observed over many previous years.

Softcat continues to enjoy strong growth in its traditional small and medium sized business (SMB) and commercial mid-market heartland, and this is now being rapidly augmented by very strong growth in the public sector market and increasingly larger enterprise customers in the commercial sector.

In the last financial year the company achieved double-digit growth in all of its core areas of business. Particularly strong growth was achieved in the data centre infrastructure and managed services areas. This was partially due to the transition in the market to cloud-based and notably private cloudbased solutions. Softcat offers the component parts and services for customers to build their own clouds and equally the company offers managed services to provide cloud-based infrastructure for customers. The company also benefited from the shift in the market to more centralised computer solutions and increasingly diverse mobility solutions, with the resulting high demand for world-class connectivity, networking and security solutions.

Softcat constantly requests feedback from its customers on service levels and overall customer satisfaction and conducts a formal annual survey to measure customer satisfaction. In this financial year’s extensive annual customer survey conducted in July 2013, 99.2% of customers surveyed were either satisfied or very satisfied with Softcat as a company to do business with. Within that collective group it saw a 6% shift upwards of those that were satisfied to very satisfied, with this latter category now amounting to over 76% of its customers.

The company recruited over two hundred new employees, the majority of which joined on its graduate?intake programme. It recruited new staff in all areas of the business and for each of its Marlow, Manchester and London locations. In the annual Softcat employee survey, in answering the question “Overall how do you feel about Softcat as your employer?” 81% answered with the highest achievable rating of very positive, while a further 17% answered positive. The company was proud to be named as the 4th Best Workplace in the UK and the 10th Best Workplace in Europe by the Best Workplaces organisation for its size category. Staff numbers increased from 432 on 31 July 2012 to 558 on 31 July 2013.

Softcat and its employees are highly engaged with a number of charities. Amongst many different activities, achievements included: raising £200,000 for the charity Dreams Come True at the Softcat May Ball; turning Softcat into a Comic Relief contact centre for a night, as well as raising an additional £30,000 for Comic Relief from a company fun day.

Momentum is very strong within the company and it is confident of continued success and increased opportunity in the current financial year. The company has enjoyed a strong first half of the current financial year 2014. It has committed to further investment in people, with plans to recruit over 200 sales and services resources during FY2014. A number of those will be located in Bristol, the fourth Softcat office, which was opened in January 2014. Moreover, there is some evidence that the market in general is picking up after some five years of very low growth in corporate and public sector IT spend.

“We are pleased with another set of stellar top and bottom line results showing strong organic growth in a challenging market. Our formula remains very much the same: employ lots of great people with the right attitude, strive to be a great place to work for our employees and provide world-class customer service. That’s our focus as well as constantly and relentlessly trying to improve every part of the business and taking full advantage of every opportunity the changing market gives us. The financials are just a result of sticking to that formula. Bringing in Colin Brown as our Managing Director at the beginning of the financial year has significantly strengthened the Softcat leadership team and I have been incredibly impressed by the commitment, adaptability and enthusiasm demonstrated by all the Softcat employees throughout the financial year. There is tremendous momentum running throughout the company and while we still have so much to improve on, the outlook looks extremely positive,” commented Martin Hellawell, Executive Chairman.

Colin Brown, Managing Director, said: “2013 was a year of great progress for Softcat. We won a record number of new customers, recruited more new talent into the business than ever before, and delivered our best ever customer satisfaction results. As the new man on the block I have been taken aback by the dynamism of the company, the friendliness of the employees and the overall spirit that is pervasive in Softcat. The relationships we enjoy with one another as team members as well as with customers and partners are second to none and I am sure that is fuelling our growth. But we have just started our journey in many aspects of the business and we have a very clear road map ahead with absolutely no shortage of opportunity or work to do. I’m personally relishing the challenge ahead of us and thank all the Softcat employees, customers and partners for their fantastic support in my first year at Softcat.”

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