17th Oct 2018 08:50
LONDON (Alliance News) - IT infrastructure firm Softcat PLC on Wednesday hiked both its final and special dividend after a year of "strong growth and cash generation".
Softcat shares, however, were trading 7.6% lower at 731.00 pence on Wednesday morning.
For the financial year that ended July 31, the company's pretax profit rose to GBP68.1 million from GBP50.3 million a year prior, on revenue up 30% to GBP1.08 billion from GBP832.5 million.
Softcat proposed a final dividend of 8.8p, up 44% from 6.1p a year ago, taking the total dividend for the year to 27.2p, up 20% from 22.5p. It also hiked its special dividend by 12% to 15.1p from 13.5p, which, if approved, will see shareholders receive a 42.3p per share total payout.
Gross profit margins dipped by 0.2 percentage point to 16.2% from 16.4% year-on-year. Gross profit increased GBP175.2 million from GBP136.3 million of which GBP2.0 million was to due to foreign exchange-related procurement savings, which the company does not expect "to repeat in 2019".
Chief Executive Officer Graeme Watt said: "I'm delighted to report on a very successful year for Softcat with revenue surpassing GBP1 billion for the first time, net profit margin rising, and cash conversion being maintained at close to 100%.
"Revenue growth was 30% and operating profit was up on the prior year by 36%, driven by successful execution of our simple strategy but also supported by exceptionally good market conditions."
Looking ahead, Softcat said it is confident of achieving "further profitable growth in 2019", despite current political and economic uncertainty.
Watt added: "Whilst the macro-economic picture is far from clear I believe the key issue surrounding Brexit will be business confidence. If prices rise due to new tariffs or weakened sterling then we will seek to pass them on as is normal for the industry.
"We are working with our vendor and distribution partners to make sure that in the event of any supply chain impacts from changes in processes that we are prepared so that there is minimal impact to our customers."
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