“I don’t know what else to tell you. Clients are spending. The business is growing. I’m not seeing any impact from Brexit.”
With the weary look of someone who has answered the same question one too many times, that’s how the CEO of Softcat Plc, Graeme Watt, answered my question about Brexit’s impact on his business.
His head office in the City of London also doubles as one of the company’s 8 regional offices. As our meeting started, staff were pouring in for a 9am start. A bell rang, sales boards lit up and Watt shrugged his shoulders. “All I can say is it’s going well”.
That was early September. Softcat has since released results that reiterated his sentiment. The business grew more than 20% in the last financial year.
Brexit woes not obvious
Softcat should theoretically be doing it tough. It resells IT equipment to small and medium businesses all over the UK. If business sentiment is bad, clients spend less money.
Instead, Softcat’s spend per client was up 17% for the year.
That sentiment wasn’t uncommon. Forager’s Gareth Brown followed my UK trip with some portfolio visits of his own and came back with the same message: good businesses seem to be doing just fine.
What you gonna blame now?
The obvious corollary to that is that many of the businesses blaming Brexit for their woes have a convenient excuse for their poor performance.
An election will be held in the UK on the 12th of December, with Boris Johnson seeking the numbers he needs to force his latest Brexit agreement through parliament. The bookies are saying a Boris win is likely. We are hoping he is successful.
There might be more than a few UK CEOs praying that he is not.
I am surprised that Forager would not be smart enough to steer clear of politics in their blog posts. Telling me you hope a confirmed liar and charlatan like Boris Johnson wins the next election makes me think I need to have my money invested elsewhere. Should we assume you are fans of Trump as well?
Hi Corey. I wouldn’t take my comments as a sign of political preferences. Our aim is to make money for the investors in our fund and we have a strong view that, with regards our portfolio, a Johnson government would be better than a Corbyn government. The version of Brexit they are likely to approve is fairly mild and the alternative is many more years of delay and a finance minister who thinks Cuba is a well-run economy (I heard that from the horse’s mouth on a recent FT podcast). So, financially, I’ll take the charlatan.