Softcat Shares Surge on Upbeat Earnings and Guidance

Softcat plc (SCT.L) shares have jumped over 7% on Wednesday morning following the release of its half-year results for the period ending January 31, 2026.

The IT infrastructure provider reported exceptional growth, leading to an upgraded full-year profit outlook.

Headline Numbers:

• Gross Invoiced Income: £2,008.6 million, a 33.3% increase year-over-year.
• Gross Profit: £269.9 million, up 22.6% compared to the same period last year.
• Underlying Operating Profit: Rose by 27.3% to £93.8 million.
• Underlying Basic Earnings Per Share: Increased to 36.1p, a 25.8% jump.

The company showcased strong cash generation, with an underlying cash conversion rate of 147.6%. This robust financial performance allowed Softcat to increase its interim dividend by 11.2% to 9.9p and complete a £45 million share buyback program in February.

The markets reacted positively to Softcat’s double-digit gross profit growth, which was fueled by advancements across all technologies and customer segments, particularly within the corporate sector.

These results were supported by prior investments in headcount, capabilities, systems, and data. The company is currently focused on modernizing operations through data and digital projects, new sales and HR systems, and investments in its workforce and office network.

Driver Breakdown:

• Broad-Based Growth: Strong performance across various technologies and customer groups.
• Strategic Investments: Prior investments in headcount, capabilities, and systems are paying off.
• AI Adoption: Increasing customer demand for AI-enabled infrastructure is boosting sales.

AskTraders Takeaway: The upgraded guidance suggests continued positive momentum for Softcat. However, investors should be aware of a potentially tougher comparative in the second half of the fiscal year and uncertainties related to ongoing memory shortages.

CEO Graham Charlton commented, “Softcat delivered terrific progress in the first half… AI is reshaping customer priorities at pace… and we remain in the very best position to deliver sustainable growth and further market share gains.”

Looking ahead, Softcat now anticipates high single-digit growth in underlying operating profit for the full fiscal year 2026, a significant upgrade from its previous low single-digit forecast. While the first half benefited from pull-forward of some customer orders due to memory shortages, the company faces a more challenging comparison in the second half due to larger solutions projects in the prior year.