26th Mar 2024 11:56
(Alliance News) - Softcat PLC's interim results demonstrated its ability to deliver in "challenging" markets, according to Jefferies on Tuesday.
Shares in Softcat jumped 9.0% to 1,619 pence each in London on late Tuesday morning.
The Marlow, Buckinghamshire-based IT infrastructure and services provider said pretax profit increased 8.1% to GBP68.2 million in the six months to January 31, from GBP63.1 million a year prior.
Chief Executive Officer Graham Charlton said: "The breadth, depth and progressive nature of our offering, delivered via our exceptional people and their relentless dedication to customer service, remains a compelling proposition. We continue to execute against our key objectives to win new customers and sell more to existing customers."
Revenue declined 8.8% to GBP467.2 million from GBP512.4 million.
The company declared an interim dividend of 8.5 pence per share, up 6.3% from 8.0p a year prior.
Jefferies said the results "demonstrate the company's ability to (over) deliver on expectations, even in more challenging markets."
The broker said full-year forecasts remain unchanged and "following the robust [first-half] performance, they now appear de-risked."
"Following volatility elsewhere in the sector, these results should serve as a reminder that Softcat is a premium operator that is fully deserving of a premium multiple," Jefferies said.
The broker has a 'buy' rating on Softcat with a 1,800p share price target.
Jefferies said the results were ahead of expectations with the performance broad-based.
Shore Capital analyst Martin O'Sullivan was also positive, reiterating a 'buy' rating.
"The interim results and outlook overall reflect to us the strengths of the group’s diverse, market-leading and well-honed business model, on top of a significant and expanding opportunity in its chosen markets," he said.
He noted forward-looking commentary indicates that the company expects to deliver on full year guidance of double-digit gross profit and high-single digit operating profit growth, in line with current market consensus.
O’Sullivan said his checks corroborate this positive tone in terms of market demand.
"Why? Because the requirements on IT systems to remain current, supported, and secure are necessities not ‘nice to have’. We believe this applies, in particular, to cyber security, cloud adoption, digital transformation, hybrid datacentres and remote working solutions," he added.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
Softcat