IT services reseller Softcat (SCT) has said it will reinstate the first half dividend that was originally cancelled in response to the Covid-19 outbreak.
The news came alongside an update telling investors that its full-year operating profit would be ‘slightly ahead’ of expectations.
The figure-free update also noted ongoing strong cash generation, an important factor in its decision to recommit to paying shareholder dividends. Full year results to 31 July 2020 will be released on 20 October, the company confirmed.
Market forecasts had been pitched at operating profit of around £93 million on roughly £1.13 billion revenue, implying double-digit growth on both measures.
Those estimates have today been nudged higher by more than one forecaster.
FORECASTS NUDGED HIGHER
‘With good cost management, profits have come in ahead for 2020, so we upgrade our earnings by 4% to 6%’, said Peel Hunt analyst James Lockyer, for full year 2020 and 2021.
‘Softcat is one of the few companies in our coverage where forecasts were left unchanged even after the pandemic hit, having already delivered a strong first half performance’, said Tintin Stormont of Numis.
‘We view the full-year 2020 performance as commendable and remain confident it can continue to deliver well owing to its strong vendor relationships, diversified customer base and proven strong sales execution’, she said.
Both analysts upped price targets for Softcat stock to £14.50 and £13.15 respectively.
Softcat shares rose more than 2% on Wednesday to £13.575, which means they have rallied close on 18% year to date.
The stock was a Shares investment Great Idea in August 2019 at 959.5p.
