This week in the IT Channel...

Every Friday morning, IT Europa compiles a summary of the week's most significant news from the channel.

In this week's news...

Softcat reports good profits growth despite big dip in sales

Sales were down and profits were up at VAR and infrastructure services player Softcat for the half year.

This morning’s results at the FTSE 250 firm for the six months ended 31 January, show sales slumped almost 9% to ￡467.2m.

A shining light is that gross invoiced income – increasingly popular to show off among VARs and services players – was up 4% to ￡1.263 billion.

The gross profit for the six months was up 11% to ￡196.5m, and the operating profit went up 5.8% to ￡66.7m.

The interim dividend was increased by 6.3% on the back of these results to 8.5p, with earnings per share creeping up 2.4% to 25.6p. The increased dividend no doubt helped bolster Softcat’s share price on the day, which is currently over 7% higher.

Softcat said the lower overall sales were primarily down to lower hardware purchases. While the emphasis across the reselling space is marked by a push to more services growth, be in no doubt that hardware means plenty to Softcat.

It says it expects hardware sales to recover going forward, and they will be important to enabling the company to return as an annual ￡1 billion-turnover player again. The ￡1 billion was breached in 2022, but slipped back under that line last year.

Softcat’s headcount continued to grow, with almost 15% extra bodies now floating around the group.

Graham Charlton, Softcat CEO, said: “We continue to execute against our key objectives to win new customers and sell more to existing customers.

“The future opportunity in our industry remains incredibly exciting. AI, data management and cyber security, amongst other technologies, continue to drive rapid transformation in technology, and this will generate growth across all areas from the cloud and data centre to the edge.”

Computacenter share price falls despite results growth

Computacenter has reported its nineteenth year of growth in a row, for the 12 months ending 31 December, 2023, with sales, gross profits and earnings per share all up. But the market was obviously looking for a bit more in the details, as the share price was down this morning.

Total group sales were up 7% annually to almost ￡7 billion. The gross profit was up over 10% to over ￡1 billion, and the gross margin rose 0.5%.

The adjusted profit before tax went up 5.4% to ￡278m.

There was gross invoiced income of over ￡10 billion, up 11.4%, driven by “strong growth” in Technology Sourcing and “solid growth” in Services, said the international VAR and cloud services player.

The proposed final dividend is 47.4p, increasing the full year dividend by 3.1% to 70p.

“Given the strength of our balance sheet, we continue to evaluate a number of capital allocation options,” said the firm. Maybe the market thought the dividend should have been higher?

The company added: “[We] expect to make further progress in 2024, with growth weighted to the second half of the year, reflecting a significantly more challenging comparison in the first half of the year than in the second half.” Maybe that spooked the market too?

For his part, Mike Norris (pictured), chief executive officer of Computacenter plc, said: "We delivered our nineteenth consecutive year of growth in adjusted earnings per share, outperforming our markets in 2023, as our large customers continued to invest heavily in new technology.

“We managed an uncertain macroeconomic backdrop and inflationary pressures effectively, and reduced our inventory significantly, resulting in a record net cash position. As planned, we stepped up our investment in strategic initiatives to underpin our competitiveness and future growth.”

As of 1pm GMT today, the share price of Computacenter is down over 7%.

IT Channel Awards announces new categories

The IT Europa Channel Awards, a prestigious event now in its 16th edition, will take place on the 26th of June at the Marriott Grosvenor Square Hotel, London.?Co-located alongside the annual Channel-Sec conference, the Awards recognise excellence the channel community.

This year's event encompasses multiple?categories including Partner Solutions, Cyber Security, Suppliers, and Distribution, alongside special areas such as leadership, talent, and culture.

Will Garside, IT Europa’s Editorial Director, said: “Our awards consistently celebrate the expertise and outstanding achievements of both IT service providers and vendors. We have several new awards this year and true to our tradition, entry is free of charge, and we invite the channel community from across Europe to participate.”

Award sponsors include industry leaders such as ConnectWise, Kaseya, Pax8, Cofense, and Threatlocker with awards judged by an independent 5-person panel of IT and communications experts.?

The nomination window is open until April 24th, inviting entries across a broad range of categories including technology, services, projects and individuals that have helped the European IT channel to excel over the last year.

For entry details and sponsorship information, visit: https://www.iteawards.com/

TD Synnex enhances circular economy with Cisco Refresh stock

Distributor TD SYNNEX ?is advancing its circular economy initiative by stocking Cisco Refresh products for immediate dispatch in its logistics centres.?

This effort? will speed up deliveries and improve product visibility, helping partners incorporate sustainable solutions into their offerings

The latest TD Synnex?Technology Directions Report highlights that 69% of channel players consider ESG factors in IT purchases, with 33% planning to invest in product lifecycle management in the next year.

Sam Paris (pictured), VP, security and networking at TD Synnex, said: “While the products may be pre-owned, there is no compromise on quality, performance or upgrade status.?

“We are bringing our corporate commitment to circular economy principles to life, helping our industry partners to minimise waste and win in the market.”

Vodafone seeks 300+ partners for SME-focused IT Hubs in UK

UK telecom?firm Vodafone is actively seeking over 300 franchise partners throughout the UK to establish its newly introduced Vodafone Business IT Hubs locally.

This new initiative is part of Vodafone's strategic effort to assist SMEs in better managing and maximising the benefits of their IT solutions.

Each Vodafone Business IT Hub will serve a designated local area, providing a comprehensive, outsourced solution for IT and communications managed services.

Miryem Salah , Chief Data Officer & Head of Vodafone Business IT Hubs, said: “We can offer our franchisees the capability, scale and confidence that comes from working with a large global brand, as well as finance and marketing support, while they can offer the technical skills and local knowledge to build a successful business that supports the local SME community.”

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