LSE:SCT

Stock Analysis Report

Executive Summary

Softcat plc primarily acts as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom.

Snowflake

Fundamentals

Flawless balance sheet with outstanding track record.


Similar Companies

Share Price & News

How has Softcat's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.0%

SCT

0.8%

GB IT

1.1%

GB Market


1 Year Return

26.9%

SCT

8.3%

GB IT

2.7%

GB Market

Return vs Industry: SCT exceeded the UK IT industry which returned 8.3% over the past year.

Return vs Market: SCT exceeded the UK Market which returned 2.7% over the past year.


Shareholder returns

SCTIndustryMarket
7 Day-1.0%0.8%1.1%
30 Day-3.1%-3.6%-1.7%
90 Day0.6%-6.7%-2.7%
1 Year32.5%26.9%11.0%8.3%7.8%2.7%
3 Year272.2%221.0%65.7%53.7%19.3%4.7%
5 Yearn/a72.3%56.6%38.0%8.1%

Price Volatility Vs. Market

How volatile is Softcat's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Softcat undervalued compared to its fair value and its price relative to the market?

29.83x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: SCT (£9.52) is trading above our estimate of fair value (£7.77)

Significantly Undervalued: SCT is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SCT is poor value based on its PE Ratio (29.8x) compared to the IT industry average (26.9x).

PE vs Market: SCT is poor value based on its PE Ratio (29.8x) compared to the UK market (16.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: SCT is poor value based on its PEG Ratio (6.7x)


Price to Book Ratio

PB vs Industry: SCT is overvalued based on its PB Ratio (22.9x) compared to the GB IT industry average (2.5x).


Next Steps

Future Growth

How is Softcat forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCT's forecast earnings growth (4.5% per year) is above the savings rate (1.2%).

Earnings vs Market: SCT's earnings (4.5% per year) are forecast to grow slower than the UK market (12.3% per year).

High Growth Earnings: SCT's earnings are forecast to grow, but not significantly.

Revenue vs Market: SCT's revenue (11% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: SCT's revenue (11% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SCT's Return on Equity is forecast to be very high in 3 years time (53.3%).


Next Steps

Past Performance

How has Softcat performed over the past 5 years?

19.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SCT's earnings have grown by 19.6% per year over the past 5 years.

Accelerating Growth: SCT's earnings growth over the past year (47.3%) exceeds its 5-year average (19.6% per year).

Earnings vs Industry: SCT earnings growth over the past year (47.3%) exceeded the IT industry 4.2%.


Return on Equity

High ROE: SCT's Return on Equity (76.9%) is considered outstanding.


Return on Assets

ROA vs Industry: SCT has a higher Return on Assets than the IT industry average last year.


Return on Capital Employed

ROCE Improving: SCT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Softcat's financial position?


Financial Position Analysis

Short Term Liabilities: SCT's short term assets (£328.6M) exceeds its short term liabilities (£254.0M)

Long Term Liabilities: SCT has no long term liabilities


Debt to Equity History and Analysis

Debt Level: SCT is debt free.

Reducing Debt: SCT has not had any debt for past 5 years.

Debt Coverage: SCT has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SCT has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: SCT has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if SCT's debt is covered by short term assets.


Next Steps

Dividend

What is Softcat's current dividend yield, its reliability and sustainability?

2.98%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%2.0%markettop25%5.4%industryaverage2.6%forecastin3Years2.4%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SCT's dividend (2.98%) is higher than the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: SCT's dividend (2.98%) is low compared to the top 25% of dividend payers in the UK market (5.44%).

Stable Dividend: Whilst dividend payments have been stable, SCT has been paying a dividend for less than 10 years.

Growing Dividend: SCT's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.7%), SCT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCT's dividends in 3 years are forecast to be covered by earnings (53.8% payout ratio).


Next Steps

Management

What is the CEO of Softcat's salary, the management and board of directors tenure and is there insider trading?

5.3yrs

Average management tenure


CEO

Graeme Watt (57yo)

1.5yrs

Tenure

UK£605,539

Compensation

Mr. Graeme A. Watt has been the Chief Executive Officer and Director of Softcat plc since April 1, 2018. Mr. Watt serves as the President for EMEA Operations at Tenva TS Holdings Limited (formerly, Avnet T ...


CEO Compensation Analysis

Compensation vs. Market: Graeme has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Insufficient data to compare Graeme's compensation with company performance.


Management Age and Tenure

5.3yrs

Average Tenure

Experienced Management: SCT's management team is seasoned and experienced (5.3 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

56.5yo

Average Age

Experienced Board: SCT's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£171,64311 Jul 19
Peter Ventress
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares18,202
Max PriceUK£9.43
SellUK£1,793,27725 Mar 19
Martin Hellawell
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares212,708
Max PriceUK£8.43
SellUK£396,82421 Mar 19
Graham Charlton
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares46,000
Max PriceUK£8.63

Ownership Breakdown


Management Team

  • Graeme Watt (57yo)

    CEO & Executive Director

    • Tenure: 1.5yrs
    • Compensation: UK£605.54k
  • Doug Fawell

    Chief Information Officer

    • Tenure: 0yrs
  • Sam Routledge

    Chief Technology Officer

    • Tenure: 0yrs
  • Colleen Kapase

    VP and Partner of Go To Market Strategy - Incentives & Programs

    • Tenure: 5.3yrs
  • Winifred Chime

    Company Secretary

    • Tenure: 0yrs
  • Colin Brown

    Managing Director

    • Tenure: 7.8yrs
    • Compensation: UK£93.36k
  • Stewart Hayward

    Head of Marketing & Bids

    • Tenure: 0yrs
  • Graham Charlton

    CFO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: UK£447.71k
  • Richard Lecoutre

    Finance Director

    • Tenure: 6.4yrs
    • Compensation: UK£104.56k
  • Rebecca Monk

    HR Director

    • Tenure: 0yrs

Board Members

  • Vin Murria (56yo)

    Independent Non-Executive Director

    • Tenure: 3.9yrs
    • Compensation: UK£47.74k
  • Graeme Watt (57yo)

    CEO & Executive Director

    • Tenure: 1.5yrs
    • Compensation: UK£605.54k
  • Peter Ventress (58yo)

    Independent Non-Executive Director

    • Tenure: 4yrs
    • Compensation: UK£58.35k
  • Martin Hellawell (54yo)

    Non-Executive Chairman

    • Tenure: 1.5yrs
    • Compensation: UK£583.55k
  • Robyn Perriss

    Independent Non-Executive Director

    • Tenure: 0.3yrs
  • Graham Charlton

    CFO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: UK£447.71k

Company Information

Softcat plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Softcat plc
  • Ticker: SCT
  • Exchange: LSE
  • Founded: 1993
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: UK£1.880b
  • Shares outstanding: 197.45m
  • Website: https://www.softcat.com

Number of Employees


Location

  • Softcat plc
  • Solar House
  • Fieldhouse Lane
  • Marlow
  • Buckinghamshire
  • SL7 1LW
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCTLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 2015
SCTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 2015
SF5DB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2015

Biography

Softcat plc primarily acts as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom. The company advices, designs, procures, implements, and manages technology for busine ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 21:27
End of Day Share Price2019/10/14 00:00
Earnings2019/01/31
Annual Earnings2018/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.