Software Circle

SFT.L

Specialty Business Services · Industrials

Price

16.00 GBp

+0.00 (+0.00%)

Market Cap

£62.4M

Exchange

London Stock Exchange

Winston Score

Winston is serious

Below-average fundamentals — multiple weak pillars.

Data as of Aug 23, 2026 · filings through Mar 31, 2026

How the score breaks down

Quality

Weak

Growth

Mixed

Cash Flow

Mixed

Stability

Mixed

Valuation

Data not available

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Share count rising — dilution

+240.7% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 114.5M (2022) → 390.1M (2026)

Winston Score History

The full picture

Software Circle plc is a UK-based company that buys and runs small software businesses. It targets niche, vertical software companies — meaning software built for specific industries like construction, healthcare, or professional services. The company acts as a permanent owner of these businesses rather than buying and selling them quickly.

Software Circle makes money from the recurring software fees and licenses that its acquired businesses charge their customers. It operates primarily in the United Kingdom and is a small company with a market value of around £100 million. Its strategy relies on finding undervalued software businesses and improving them over time, but the company is currently unprofitable at the operating level, and its very low gross margin of around 3% suggests it is still in an early and costly stage of building its portfolio. The main risk is that it must keep acquiring and integrating businesses efficiently before it runs out of financial runway.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+29.0% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+125.0% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

£0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

59.0%ownership

↑ Rising

Insiders increasing their stake — aligned with shareholders

Cash Position

Cash flow positive

£4M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Software Circle grew revenue 29% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

21.9%

Thin — 21.9% gross margin

Profit after running costs

Operating Margin

11.1%

Modest — 11.1% operating margin

Return on the money invested

ROCE

1.9%

Weak — 1.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth

Sales YoY

+21.8%

Fast-growing sales (+21.8% YoY)

Profit growth

EPS YoY

N/A

Data not available

How steady the profit is

EPS Consistency

3/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash

Cash Conversion

N/A

Data not available

Spare cash per sale

FCF Margin

22.7%

Converts sales into free cash efficiently (22.7%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.49

Conservative — low debt load (0.49)

Covers its interest

Interest Cover

0.33x

Dangerous — barely covers interest (0.3x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

Price vs profit

P/E Ratio (TTM)

N/M

Negative earnings — P/E not meaningful

Cheaper or dearer next year

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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