Softcat PLC (LON:SCT) is proposing a special dividend of 7.6p on top of its total ordinary dividend for the full-year.
The special distribution was calculated to increase the approximate minimum cash holding of the business from £30mln to £45ml, partly reflecting the increase in the size and scale of the business since IPO.
READ: Softcat to resume dividend payments as profits come in slightly ahead of forecasts
The total ordinary dividend of 16.6p includes the previously cancelled interim dividend of 5.4p, and is 11.4% up on the combined interim and final dividend of last year.
The current financial year has started well but the software provider expects corporate customers to remain tight with their spending over the coming months, though it will continue following its strategy of organic investment in new capabilities.
In the year to July 31, 2020, Softcat's revenue advanced 9% to £1bn for profit before tax up 10% to £93mln. Cash and cash equivalents at end of year were £80mln.
Analysts at Peel Hunt increased their gross profit growth forecast to mid-single-digits but given Softcat is going to ramp hiring, kept profit estimates unchanged.
Shares dropped 9% to 1,132.99p on Tuesday morning.