- IT group Softcat upgraded its annual earnings guidance after it achieved double-digit revenue growth in the third quarter, though it also warned of a flat performance in the following financial year.

Softcat said it now expected results for the year through July to be 'ahead of expectations'.

The company delivered further double-digit year-on-year growth in revenue, gross profit and operating profit in the three months through April.

The improvements reflected performance that was generally more broad-based than that seen in the first half, it added.

Looking further ahead, however, Softcat said cost savings related to Covid were expected to reverse as it entered the next financial year.

It also noted that the first half of the 2021 financial year contained a number of the largest deals it had ever transacted, significant elements of which were one-off in nature.

'These two factors combine to contribute around £12 million to earnings before interest and tax (EBIT) in the 2021 financial year, the majority of which was seen in the first half,' Softcat said.

'We remain confident of the road ahead and expect to see further growth on normalised EBIT in the 2022 financial year, likely to result in reported EBIT being broadly in line with the upgraded performance now anticipated for the 2021 financial year.'

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