Softcat shares jump on special dividend, upbeat outlook

24th Oct 2024 09:04

(Sharecast News) - London-listed IT infrastructure services provider Softcat impressed investors with its annual results on Thursday as the company revealed a special dividend payment following strong cash generation in the year to 31 July.

Softcat shares were up nearly 12% at 1,710.78p by 0943 BST after the company said it would pay out 20.9p per share by way of a special dividend, two thirds higher than last year, alongside a 6.5% increase in the final dividend to 18.1p.

Revenues were down 2.3% at £963m as weak UK economic conditions dampened customer demand through the year, resulting in longer sales cycles and deferred spending.

However, operating profits improved 9.3% to £154.1m, beating company-compiled consensus forecasts of £152.2m, helped by a 1.8% increase in customer numbers and a 9.7% jump in gross profit per customer.

Looking forward, Softcat predicted another year of high single-digit operating profit growth in the current fiscal year.

"I'm delighted to report another record year for Softcat, delivering strong growth ahead of market expectations, despite challenging market conditions," said chief executive Graham Charlton.

"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."