IT provider Softcat on Wednesday upgraded annual earnings guidance after reporting double-digit revenue growth in the third quarter.
Softcat delivered further double-digit third-quarter year-on-year growth in revenue, gross profit and operating profit, reflecting performance “that was generally more broad-based than that seen in the first half”.
“Run-rate transaction volumes strengthened in the latest period and cash collections and conversion have remained good, in line with normal trends,” the company said in a trading update.
However, it warned that cost savings related to Covid were expected to reverse as it entered the next financial year and noted that the first half of the 2021 financial year contained a number of the largest deals it had ever transacted, significant elements of which were one-off in nature.
“These two factors combine to contribute around £12m to earnings before interest and tax (EBIT) in the 2021 financial year, the majority of which was seen in the first half,” Softcat said.
“We remain confident of the road ahead and expect to see further growth on normalised EBIT in the 2022 financial year, likely to result in reported EBIT being broadly in line with the upgraded performance now anticipated for the 2021 financial year.”
