Insider: finance chief bets heavily on this FTSE 250 tech stock

Softcat (LSE:SCT) shares worth £325,000 have been bought by its finance chief after the IT services firm’s recent upgrade to profit guidance failed to fully shake-off the City’s AI jitters.

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Katy Mecklenburgh picked up shares on several occasions last week at an average price of 1,332.5p, which compares with 1,443p prior to February’s sector-wide de-rating and the four-year high of 1,868p set in June 2025.

The FTSE 250-listed stock fell as far as 1,083p before a recovery in mid-March after better-than-expected interim results highlighted the company’s positioning as an “AI infrastructure enabler” rather than an application-layer story.

City firm Peel Hunt, which has a Buy stance and price target of 2,135p, said at the time: “We consider this an interesting positioning change, in our view an attempt to distance itself from the ‘AI kills software’ narrative.”

The broker added that the company was enjoying the “messy middle” of AI adoption, where complexity rises and customers need handholding in a multi-vendor environment.

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The UK’s largest valued-added reseller provides commercial and public sector organisations with support for their digital infrastructure through collaborations with more than 400 technology vendors including Microsoft and IBM.

Softcat said last month that AI was reshaping customer priorities and that organisations of all sizes are now prioritising the building of the data, infrastructure and security foundations needed to deploy it effectively and at scale.

It highlighted the benefit of last year’s acquisition of data and AI consultancy Oakland, which it said had enabled it to engage earlier in customers’ transformation journeys.

Chief executive Graham Charlton added: “The market is still only in the early stages of the AI adoption cycle, creating significant long-term opportunities for Softcat.”

He reported 33% growth in gross invoiced income to £2 billion and a 27% rise in underlying earnings to £93.8 million - up 9% and 15% respectively on City expectations. Softcat now expects high single-digit growth in underlying profit, from a low single-digit seen previously.

The company, which has a record of returning excess capital through buybacks or special dividends, increased the half-year award due for payment on 20 May by 11% to 9.9p a share. Softcat has returned £661.9 million to shareholders since its stock market flotation in 2015.

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Panmure Liberum, which has a price target of 1,920p, said last month that the recent AI sell-off had thrown up an opportunity to buy quality businesses in the sector such as Softcat.

Annual comparatives are set to toughen but it said this should not put off anyone considering a business capable of delivering 8-10% compound earnings growth in the 2026-28 period.

The shares traded at 1,360p on Friday after fellow IT re-seller Computacenter used its first-quarter trading update to upgrade guidance for the year.

Mecklenburgh, who joined the company in June 2023 after a spell as interim finance boss of ASOS, also bought £295,000 of shares in December at a price of 1,456p

AB Foods sheds clothes arm

A non-executive director of Associated British Foods (LSE:ABF) has shown her support for the company’s Primark demerger strategy by spending £20,000 on shares at a price of 1,852.5p.

The dealings by Loraine Woodhouse, who has been a board member since October 2024, took place on Wednesday after AB Foods confirmed that it intended to separate the fashion retail business before the end of 2027.

The company, whose remaining food operations span the divisions of grocery, ingredients, sugar and agriculture, also reported a 19% drop in half-year adjusted profits to £663 million.

This was slightly bigger than the City had expected in the six months to 28 February after sugar recorded a £27 million operating loss due to lower average selling prices in Europe. The division is set to remain in the red for the full year.

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Chief executive George Weston said of the wider group’s performance: "We knew the first half of this financial year was going to be challenging and that's borne out in our financial results. However, we still expect improved group performance in the second half.”

He added that Primark made progress re-energising its customer offer in a difficult clothing market, resulting in like-for-like sales growth and market share gains in the UK.

Shore Capital said there was “a lot to like” in the prevailing and emerging ABF investment theses, with the combined group trading on undemanding valuation multiples. However, the weakness of sugar markets means that the broker has retained its Hold stance.

The shares have fallen 15% in the past year, having been above 2,500p in May 2024.