Is this UK innovation business set for FTSE 100 addition?
Softcat, the UK’s biggest reseller of IT facilities innovation and services, appears on track to get in the FTSE 100 as earnings and earnings continue to grow through the implementation and usage of AI.
The business updated its full-year earnings expectations for the 2nd time in 3 months previously this year, pointing out continual need for AI-enabled facilities and a tailwind from an industry-wide memory scarcity.
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Softcat has a story comparable to Computacenter, which got in the FTSE 100 this year: a veteran steady, growing company has actually been turbo charged by brand-new innovation.
In a trading upgrade for the 3rd quarter to 30 April 2026, the Marlow- based group stated it now anticipates mid-teens development in underlying operating earnings for the complete year, having actually assisted to high single-digit development at the half-year in March and low single-digit development before that.
What Softcat does
Softcat sits in between the world’s biggest innovation suppliers and the organisations that purchase from them. It sources, recommends on, carries out and handles IT facilities for around 10,400 consumers, covering small companies through to big business throughout the business and public sectors.
Its proposal ranges from the datacentre to the edge and covers hybrid platforms, the modern-day work environment, cyber security, networking and, significantly, information, automation and AI.
Softcat deals with more than 400 suppliers, consisting of Microsoft, Hewlett Packard Enterprise, Cisco, Dell, NVIDIA, AWS and Google, enabling its account supervisors to offer throughout hardware, software application and services instead of press a single line of product.
That vendor-agnostic position, integrated with a big and varied client base, is main to the business’s competitive argument. Alongside its core UK and Ireland operations, the group runs workplaces in the United States and Singapore, in addition to a handful of worldwide branches.
Top line development
For the 6 months to 31 January 2026, gross invoiced earnings increased 33.3% to ₤ 2.01 bn and gross earnings climbed up 22.6% to ₤ 269.9 m. Underlying operating earnings was up 27.3% at ₤ 93.8 m, and underlying standard profits per share increased 25.8% to 36.1 p. The interim dividend was raised 11.2% to 9.9 p.
Hardware led the charge, with gross invoiced earnings up 78.7% as bigger, lower-margin options tasks and some order pull-forward from memory scarcities flattered the leading line. Services and software application grew 29.0% and 18.6%, respectively.
AI has actually been an important consider assisting increase monetary efficiency.
Management describes AI offer ‘2 unique’ chances forSoftcat First, what it offers: AI work position much heavier needs on calculate, storage, networking and security; 2nd, how it offers, through internal tools such as its CatNav sales navigator and a growing set of analytics and automation representatives.
A ten-year performance history of substance development and a progressive dividend policy targeting 40– 50% of post-tax earnings would make this a welcome addition to the FTSE 100, which does not have innovation business.
Despite having a market cap of ₤ 3.6 bn, practically the like Burberry and a little more than Persimmon, it is not likely to get in the FTSE 100 in September’s rejig as Softcat does not rather have actually the assessment required to get it there right now. However, a great set of lead to the coming months might see Softcat sign up with the FTSE 100 soon.
