Computacenter and Softcat are the UKs biggest IT resellers. They’re also extremely profitable. Everything we know about their pasts indicates they are great businesses that should endure. The future may be less predictable.
Since my last update nearly a month ago, 17 shares have passed the minimum quality filter. After further scrutiny of their historical numbers, 6 scored less than three strikes.
5 Strikes
|
Name |
TIDM |
Prev AR |
Strikes |
# Strikes |
|---|---|---|---|---|
|
VOD |
Vodafone |
22/5/26 |
? Holdings – Debt – Growth – ROCE |
4 |
|
BMS |
Braemar |
21/5/26 |
? CROCI – Growth – ROCE |
3 |
|
CARD |
Card Factory |
21/5/26 |
– Holdings – Debt |
2 |
|
JD. |
JD Sports Fashion |
20/5/26 |
– Holdings – Acquisitions – Debt |
3 |
|
NFG |
Next 15 |
20/5/26 |
– Debt – Growth ? ROCE – Shares |
3 |
|
LDG |
Logistics Development |
19/5/26 |
? Holdings – CROCI – ROCE – Shares |
4 |
|
ASY |
Andrews Sykes |
18/5/26 |
– Holdings – Growth |
2 |
|
LSC |
London Security |
15/5/26 |
– Holdings |
1 |
|
ENW |
Enwell Energy |
13/5/26 |
– Holdings ? CROCI – Growth – ROCE |
4 |
|
KEYS |
Keystone Law |
13/5/26 |
0 |
|
|
ELCO |
Eleco |
9/5/26 |
– Holdings ? Growth |
1 |
|
ING |
Ingenta |
5/5/26 |
– CROCI – Growth – ROCE |
3 |
|
IOF |
Iofina |
1/5/26 |
? CROCI – ROCE ? Shares |
2 |
|
AEP |
AEP Plantations |
30/4/26 |
– Holdings – CROCI – Growth ? ROCE |
4 |
|
GMS |
Gulf Marine Services |
30/4/26 |
– Holdings – Debt – Growth – ROCE – Shares |
5 |
|
TLW |
Tullow Oil |
30/4/26 |
? Holdings ? CROCI – Debt – Growth – ROCE – Shares |
6 |
|
NOG |
Nostrum Oil & Gas |
29/4/26 |
? Holdings – CROCI – Debt – Growth – ROCE – Shares |
6 |
|
26/05/2026 |
||||
I will take a closer look at these shares later in the year, because I am working from a different list, all the shares that have achieved less than three strikes so far in 2026 (see below).
This enables me to prioritise the 0’s over the 1’s, and the 1’s over the 2’s.
Today, I am focusing on the remaining 0’s. I will be writing up Quartix and Keystone Law in more detail for Interactive Investor in the next fortnight. They are among the thirty shares I select from, for ii’s Share Sleuth model portfolio. Here, I will restrict myself to showing you how they passed 5 Strikes.
Computacenter is the other share to make it through the initial screening process unblemished.
Computacenter | CCC [0 strikes]
Normally, this is where I focus on what’s bad about a company’s numbers. Since there is nothing to show for Computacenter, I’ll show you what’s good about it instead:
Source: ShareScope custom table
This custom table shows all the financial 5 Strikes criteria. Computacenter has not been very acquisitive. Not only has it consistently achieved positive cash flow, which is all it takes to pass the CROCI (Cash Return on Capital Invested) criterion, it has achieved double digit CROCI in each of the last eight years, which is very impressive. Net borrowings are negative (I require them to be less than 25% of capital employed, excluding goodwill). Reported ROCE (Return on Capital Employed) has never fallen below 10%, which might have earned Computacenter a strike had it happened, in fact it hasn’t fallen below 20%. The share count has declined in recent years, which is good because it means holders have a proportionally bigger share of the businesses’ returns.
Growth was negative in one year (2021) but since it was a pandemic year and the company has otherwise grown fairly strongly I have given Computacenter a bye.
If you are wondering about the only non-financial factor that can earn a strike, Computacenter’s directors own just under 42% of the shares. Non-executive directors Peter Ogden and William Hulme own the bulk of them.
Source: ShareScope > Financials >DD
Sir Peter Ogden co-founded Computacenter with William Hulme in 1981. Ogden was chairman until 1998. Hulme was executive chairman when he stepped down in 2001. Both men are in their late 70’s so their influence on the company may be waning, however they have a controlling shareholding and are still active. Ogden attended 6 of 8 scheduled board meetings and Hulme attended all 8. Impressively, chief executive Mike Norris is a lifer with a 1% holding. He joined from university and has been chief executive since 1994.
As I hope my football team, Arsenal, will go on to demonstrate in future years, sticking with good management can yield truly impressive results. Computacenter, with a market capitalisation of £4.4bn, has.
Good companies often promote from within, because they know internal candidates well, it creates opportunities for ambitious people in the business, and preserves a winning culture. Computacenter’s chief financial officer was appointed last September. He joined Computacenter in 1999.
Computacenter is an IT reseller. It sells hardware and software to businesses and public sector organisations.
We have history. I rejected Computacenter in favour of rival Softcat in 2018. Softcat is also a substantial IT reseller (market capitalisation £3.2bn).
Since 2018, the shares have broadly tracked each other, although in 2025 Computacenter’s share price broke out:
I put this down to the fact that Softcat’s business is skewed towards smaller and medium sized companies in the UK, while Computacenter’s is skewed towards large multinationals and it earns a small majority of revenue in the USA.
Source: ShareScope > Financials > Company
Both companies are making hay because of extraordinary demands from ‘hyperscalers’, big cloud computing companies building AI infrastructure.
The businesses that manufacture components for this infrastructure, most notoriously memory, have switched to producing the high bandwidth products required for AI. This has led to widespread shortages, even for components for established products like smartphones and desktop computers. In turn, prices have gone up across the board and customers are having to order further and further in advance.
Computacenter is closer to the heart of the boom. The big hyperscalers are American.
Last week it moved even closer, by acquiring Government Acquisitions, a US reseller. It supplies the US federal Government with IT. In 2025 it was AI chipmaker Nvidia’s “US Public Sector Partner of the Year for 2025.”
But traders have realised that the boom is rippling outwards, and Softcat’s share price has responded too.
This puts a contrarian investor like me in a bit of a bind. These are impressive businesses, but it would be easy for traders to get carried away. Opinion is divided on how long the good times will roll.
While Computacenter’s valuation metrics are not particularly high for a business that have performed so well, they’re a lot higher than they have been in recent years, and might look high in retrospect if demand ebbs away:
Source: ShareScope > Financials > Summary
The low three year average probably reflects a fear that has gradually emerged since ChatGPT first shocked us with its capabilities: In the long-term resellers may lose business as advances in AI make it easier for customers to buy direct and for IT suppliers to sell direct.
In other words, by helping build AI infrastructure, the middlemen may be sowing the seeds of their disruption. That would be contrary to their experience from previous disruptive technologies, like cloud computing, which increased choice and complexity for customers and stoked their businesses.
I am going to come back to this conundrum another time. Today, the best I can do is lay out the problem! If you want to get ahead of me, Computacenter and Softcat have much to say on component shortages.
Keystone Law | KEYS [0 strikes]
Keystone Law is unique among listed law firms because it is a network of self-employed lawyers. Each pays the listed mothership a proportion of revenue for use of the brand, and networking and administrative services. It is also unusually profitable for a listed law firm. And there are no blemishes in its eight year financial track record.
Founder James Knight owns almost 29% of the firm.
Quartix | QTX [0 strikes]
Quartix provides a vehicle tracking service for small and medium sized commercial fleets.
Like Computacenter and Keystone Law, Quartix has a pretty impeccable financial track record. I forgive it two small contractions in turnover in 2019 and 2021 because it was exiting a side hustle selling tracking systems to insurance customers through a big supplier. Now the company is focused on what it does best, commercial fleets, it should not be so encumbered.
Founder and chief executive Andy Walters owns just over 22% of the shares. But as I reported recently, there is a wrinkle in the form of the unconventional board he leads.
All the 0’s, 1’s and 2’s
So far in 2026, 7 shares have achieved 0 strikes, 16 shares have achieved 1 strike, and 33 shares have achieved 2 strikes:
|
Name |
TIDM |
Prev AR |
Strikes |
# Strikes |
Link |
|---|---|---|---|---|---|
|
KEYS |
Keystone Law |
13/5/26 |
0 |
||
|
FOUR |
4imprint |
14/4/26 |
? Holdings |
0 |
|
|
CCC |
Computacenter |
8/4/26 |
0 |
||
|
QTX |
Quartix |
25/3/26 |
? ROCE |
0 |
|
|
PRV |
Porvair |
11/3/26 |
? Holdings |
0 |
|
|
HWDN |
Howden Joinery |
25/2/26 |
? Holdings |
0 |
|
|
CER |
Cerillion |
12/1/26 |
0 |
||
|
LSC |
London Security |
15/5/26 |
– Holdings |
1 |
|
|
ELCO |
Eleco |
9/5/26 |
– Holdings ? Growth |
1 |
|
|
BAG |
Barr (AG) |
21/4/26 |
? Acquisitions ? Growth |
1 |
|
|
SAG |
Science |
21/4/26 |
? Growth |
1 |
|
|
NXT |
Next |
16/4/26 |
– Debt |
1 |
|
|
FDM |
FDM Group |
10/4/26 |
– Growth |
1 |
|
|
HILS |
Hill & Smith |
10/4/26 |
– Holdings ? Acquisitions |
1 |
|
|
IMI |
IMI |
31/3/26 |
? Holdings – Debt ? Growth |
1 |
|
|
CKN |
Clarkson |
30/3/26 |
? Growth – ROCE |
1 |
|
|
RMV |
Rightmove |
30/3/26 |
– Holdings |
1 |
|
|
ROR |
Rotork |
27/3/26 |
– Holdings ? Growth |
1 |
|
|
ALFA |
Alfa Financial Software |
24/3/26 |
– Growth |
1 |
|
|
GAMA |
Gamma Communications |
24/3/26 |
? Acquisitions – Holdings |
1 |
|
|
INCH |
Inchcape |
24/3/26 |
– Growth |
1 |
|
|
MEGP |
Me Group |
23/3/26 |
– Growth ? ROCE |
1 |
|
|
BOWL |
Hollywood Bowl |
5/1/26 |
– Debt |
1 |
|
|
CARD |
Card Factory |
21/5/26 |
– Holdings – Debt |
2 |
|
|
ASY |
Andrews Sykes |
18/5/26 |
– Holdings – Growth |
2 |
|
|
IOF |
Iofina |
1/5/26 |
? CROCI – ROCE ? Shares |
2 |
|
|
EKF |
EKF Diagnostics |
27/4/26 |
? CROCI – Growth ? ROCE |
2 |
|
|
WINK |
M Winkworth |
24/4/26 |
– Holdings – Growth |
2 |
|
|
JDG |
Judges Scientific |
22/4/26 |
? Acquisitions – Debt – Growth |
2 |
|
|
FEVR |
Fevertree Drinks |
20/4/26 |
– CROCI – Growth |
2 |
|
|
CAML |
Central Asia Metals |
15/4/26 |
– Growth ? ROCE |
2 |
|
|
PAGE |
Page |
13/4/26 |
– Holdings? CROCI – Debt – Growth – ROCE |
2 |
|
|
MACF |
Macfarlane |
10/4/26 |
– Holdings – Debt ? Growth |
2 |
|
|
SVS |
Savills |
9/4/26 |
– Holdings – CROCI ? Growth ? ROCE |
2 |
|
|
APTD |
Aptitude Software |
8/4/26 |
– Holdings ? Acquisitions – Growth |
2 |
|
|
IGG |
IG Group |
8/4/26 |
– Holdings – Growth |
2 |
|
|
SPX |
Spirax |
8/4/26 |
– Holdings – Debt ? Growth |
2 |
|
|
BBY |
Balfour Beatty |
2/4/26 |
– Holdings ? CROCI ? Growth – ROCE |
2 |
|
|
LUCE |
Luceco |
25/3/26 |
? Acquisitions – Debt ? Growth ? ROCE |
2 |
|
|
BA. |
BAE Systems |
24/3/26 |
? Holdings ? Acquisitions – Debt ? Growth |
2 |
|
|
DOM |
Domino’s Pizza |
24/3/26 |
– Holdings – Debt ? Growth |
2 |
|
|
ITRK |
Intertek |
20/3/26 |
? Holdings – Debt ? Growth |
2 |
|
|
JSG |
Johnson Service |
19/3/26 |
– Holdings – Debt |
2 |
|
|
HIK |
Hikma Pharmaceuticals |
18/3/26 |
? Acquisitions – Debt |
2 |
|
|
YU. |
Yu |
18/3/26 |
– CROCI ? ROCE |
2 |
|
|
BNZL |
Bunzl |
17/3/26 |
? Holdings – Debt – Growth |
2 |
|
|
CTEC |
ConvaTec |
10/3/26 |
? holdings – Debt ? Growth ? ROCE |
2 |
|
|
MONY |
Mony |
9/3/26 |
– Holdings ? Growth |
2 |
|
|
STEM |
SThree |
9/3/26 |
– Holdings – Growth |
2 |
|
|
GSK |
GSK |
6/3/26 |
? Holdings – Debt ? Growth |
2 |
|
|
DATA |
GlobalData |
2/3/26 |
? Acquisitions – Debt ? ROCE |
2 |
|
|
IHG |
InterContinental Hotels |
26/2/26 |
? Holdings – Debt |
2 |
|
|
REL |
RELX |
19/2/26 |
? Holdings – Debt ? Growth |
2 |
|
|
RFX |
Ramsdens |
15/1/26 |
– CROCI ? Growth ? ROCE |
2 |
|
|
IHP |
IntegraFin |
9/1/26 |
– CROCI |
2 |
|
|
RWS |
RWS |
8/1/26 |
? Acquisitions – Growth – ROCE |
2 |
Richard Beddard
Contact Richard Beddard by email: richard@beddard.net, web: beddard.net
This article is for educational purposes only. It is not a recommendation to buy or sell shares or other investments. Do your own research before buying or selling any investment or seek professional financial advice.
