Softcat reports strong annual sales despite growth warning

Softcat, a UK-based IT services provider, reported strong financial results despite issuing a warning regarding slower future growth. For the 12 months ending in July, sales increased 35.4% to £2bn, while gross invoiced income rose 30.5% to £4.7bn. Underlying operating profit grew 19.7% year-on-year to £215m. The company attributed the income boost to broad-based performance and large solutions projects in areas such as cloud computing, networking, and cybersecurity.

Following the announcement, Softcat shares fell 6% to £18.09. Financial analysts have provided mixed outlooks on the stock. Jefferies Financial Group reaffirmed a ‘hold’ rating with a price objective of GBX 1,700. Conversely, JPMorgan Chase & Co. issued an ‘overweight’ rating with a target of GBX 2,300, and Berenberg Bank provided a ‘buy’ rating with a target of GBX 2,400. Deutsche Bank maintained a ‘hold’ rating while raising its price objective to GBX 2,140.