Softcat hikes dividend by 18.5% to 6.4p per share

Softcat (LON:SCT) outperformed its own upgraded forecasts at the halfway stage of the financial year as the IT company remained resilient during the pandemic.

The FTSE 250 company expects to surpass its full-year expectations too as it has further invested in its growth strategy during the past 12 months.

Total headcount was 1,658 at the end of January, up 12% from the year before, while the IT company said it did not make use of government support.

While cost savings on account of the coronavirus pandemic are expected to shrink over the second half of the year, Softcat said it is positive over its potential to grow its market.

During H1 to 31 January 2021, Softcat’s revenue rose by 10% to £577m, while pre-tax profit jumped up 29% to £57m as reduced costs increased the company’s operating profit.

The interim dividend, which will be paid out in May, was raised by 18.5% to 6.4p per share.

Despite the widespread move to remote working, Softcat’s customer base rose to 9,600 by 1.5%, as the public sector held steady and corporate demand resurged following a dip early on in 2020.

The Sofcat share price rose by 11% to 1,731p on Wednesday as markets opened.

Graeme Watt, chief executive of Softcat, commented on the results:

“We are pleased with the strong performance in the first half of the financial year in which we continued to grow and take share in a market that has remained relatively resilient during the pandemic. We did see a reduction in income from some corporate customers during the last quarter of our previous financial year, but during the current period that effect has gradually diminished.”

“In addition, the business has benefitted from a temporary reduction to some elements of the cost base, although we expect this to normalise as the second half develops. The Company has taken no form of government support during the pandemic nor made any headcount reductions and we expect that to continue to be the case. We have been delighted to be able to put part of our Marlow head office to good use as a Covid vaccination centre over the past few months and this will continue into the summer.”

Oriole Resources narrows pre-tax loss

Oriole Resources (LON:ORR) is strongly positioned for the year ahead as the company confirmed active drilling campaigns at its core projects in Cameroon and Senegal, in addition to its investment projects in Djibouti and Turkey, in its full-year results.

The AIM-listed exploration company posted a loss before tax of £320,000, down from £1.67m loss the year before.

The improved performance came about as a result of a £317,000 foreign exchange gain on its Senala asset in Senegal, successful growth of its Turkish consultancy business and cost-saving measures that reduced the group’s administrative overheads by 35%.

The company confirmed it ended the year with a cash balance of £1.75m.

Just recently, Oriole Resources revealed it was making progress on its 3,080 metre drill programme at the Bibemi gold project.

Tim Livesey, chief executive of Oriole Resources, commented on the diffciculties faced by the company during 2020 while looking ahead.

“Whilst 2020 was a difficult and unprecedented year at a global level, at Oriole we succeeded in advancing the Company’s pre-stated development goals of signing of a drill contract and securing the necessary funds to allow us to finish the year poised for the commencement of our maiden drilling programme at Bibemi in Cameroon. With initial results anticipated in Q1, and continuing into Q2, we look forward to building our knowledge of the extensive gold mineralisation on the licence.”

“We also secured, alongside our partner, a district-scale package of eight new licences in central Cameroon covering 3,592 km². We believe the area to be highly prospective for gold, both from historic results and from our initial remote sensing studies on the area. A reconnaissance visit has already been completed ahead of an upcoming stream sediment sampling programme, which we anticipate will commence in Q2.”

“The next stage of exploration at Faré will be an RC and DD programme, which is planned for completion by the end of Q2, and we also look forward to the planned RC and DD programme at Madina Bafé later in the year.”

The FTSE 100 shrank below 6,700 on early Tuesday morning as it fell 0.6%. This was despite cable also shedding 0.4% as it ducked under $1.381.

The fall came on the back of employment news which “broadly disappointed” according to Connor Campbell, financial analyst at Spreadex. “Though the unemployment rate covering the 3 months to January unexpectedly fell from 5.1% to 5.0%, the more recent data paints a less rosy picture, with February’s claimant count change number hitting 86,600 against the 9,000 forecast,” Campbell said.

Extending Germany’s partial lockdown over the Easter period, Merkel stated that the country was in a ‘very serious’ situation, going as far to say that it is ‘basically in a new pandemic’ thanks to the new found dominance of the British variant. 

“Britain should perhaps prepare itself for similar news. After all, yesterday Boris Johnson warned that we would feel the effects of the European third wave ‘in due course’,” said Campbell.

FTSE 100 Top Movers

At the top of the FSTE 100, Imperial Brands (1.97%), Reckitt Benckiser (1.88%) and Severn Trent (1.70%) are the day’s biggest risers so far.

Air travel companies IAG (-4.33%) and Rolls-Royce (-4.24%) are the day’s top fallers so far, closely followed by JD Sports (-3.08%).

£5,000 for Going on Holiday

Fines of £5,000 are set to be introduced for people from England who travel abroad before the end of June as the country is taking measures to control its borders.

While the government is still reviewing the possibility of international travel in April, ahead of a possible return in May, health minister Matt Hancock said travel fines were a part of legislation in the event that a resumption of travel is not possible.