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Softcat Plans to Float on LSE

Buckinghamshire-based Softcat is to float on the Stock Exchange this November for an estimated £500m initial public offering. The move will result in huge windfalls for key figures who own large stakes in the software reseller.

Peter Kelly, its founder, owns a 52pc stake in the company, while Martin Hellawell, its chief executive, owns 12pc. The entire company is owned by around 180 staff and founders, and the float will consist entirely of selling existing equity, meaning some of the bigger shareholders will dispose of stakes worth millions of pounds.

Under rules for premium listings, at least 25pc of the company will be floated, meaning a minimum of around £125m being sold. The company itself will not be able to issue new shares for at least 180 days after the listing.

Softcat, which resells software from Microsoft, Apple, Cisco and others to businesses, as well as providing its own data centre infrastructure, has grown rapidly since Mr Kelly founded it in 1993.

In the year ended 31 July 2015, revenues grew to £596.1m from £504.8m in the prior year and operating profit came in at £40.6m, climbing from £35.5m. Profit after tax was £31.1m, up 13.8 per cent year-on-year.

Softcat’s flotation, expected in November, is the latest in a hot streak for technology company listings in London, following the likes of Sophos and Worldpay.

“The board believes that the company's plan for an IPO provides a natural step forward for the business, while retaining its culture and ethos,” said Brian Wallace, its non-executive chairman.

“The IPO will enhance the public profile of Softcat, help attract new customers and support growth through the ability to attract and retain high quality employees.”

Martin Hellawell, CEO, said in a statement “We have successfully grown Softcat with a clear vision and purpose. Softcat is a people-centric, sales driven organisation, focused on delivering world class customer service in the attractive IT infrastructure market."

"For the last decade we've done just that, delivering a track record of strong financial performance and demonstrated an ability to evolve our customer offerings," he added.

"Our growth model is simple but effective: grow our business with existing customers and win new customers, while continuing to offer a world class service. By continuing to focus on these key areas, we believe that we can continue to drive the growth of our business and, as a consequence, create shareholder value,” concluded Hellawell.