It is starting to look that if you had money in Computacenter, you would be laughing all the way to the bank this year as there are good signs that the company is going to do better than anyone expected.
The outfit has put out a few hints over the last few weeks and the third quarter numbers were pretty good – there was also some spare cash to set up shop in Dublin to serve the Irish market. Third quarter numbers showed that there had been revenue growth of eight percent in the UK business as customers started to spend. While the figures showed the UK was still growing slightly slower than the group’s international units, but third-quarter sales of £335 million, up from £310 million a year ago, improved its year-to-date position to grow six percent.
This is in sharp contrast to last year which was rather unpleasant for the channel player.
The latest note from Computacenter has arrived the form of a trading update which says:
“Following a strong start to the fourth quarter and the visibility of a growing pipeline for the rest of 2017, Computacenter’s Board believes that the Group’s trading result for the 2017 financial year will now be comfortably more than its previous expectations,” the firm stated in a trading update.”
Shareholders should be happy that they will see a one-off return in Q4 of £100 million. The full-year results are due out towards the end of January, where the firm will provide more details.
Reseller giant Computacenter is seeing a resurgence in its UK business.
The reseller and IT services giant announced its half-year results for the six months ending 30 June, with revenue up 15 percent year-on-year to £1.7 billion.
In the first part of the year the UK business had been highlighted as a company weak spot. Year-on-year sales sliding one percent, while Germany had soared 23 percent and France six percent.
CEO Mike Norris said that services revenue in the UK showed good improvement during the first half of 2017.
“Whilst the managed services pipeline has been rebuilding, the UK business has defended its contract base by completing a number of significant contract renewals.
“Services margins have improved in the UK, partly as a result of the increased mix of professional services, a business once again operating at sustainable levels of utilisation, and partly because of across-the-board execution in line with expectations within the managed services portfolio.”
Computacenter shares rose as much as 19 percent on the London Stock Exchange on the back of the announcement.
However, the outfit’s German business pulled further away from the UK in terms of revenue, coming in 26 percent up on the previous year at £762.6 million.
The French arm of the business grew 14 percent to £228.6 million, while Belgium was up 24 percent to £30.5 million.
Computacenter has issued an interim statement for 2016 where it said that it had done OK in a miserable period of UK history.
Computacenter said it had a lot to be happy about with a strong pipeline of managed services opportunities. The channel giant said that the 12 months ending 31 December had been ok overall the Group’s numbers will be in line with board expectations.
Group revenue was up by six percent for the year, service turnover improved by five percent and supply chain revenue was up by seven percent. Currency falls had been a real killer. Currency fluctuations with the pound and the dollar have been felt strongly in the UK, with some vendors increasing prices over the last few months and, not surprisingly, the numbers from Computacenter for the performance of this country were slightly down on last year.
UK revenue was down a percent, services dropped by eight percent with supply chain on the rise by three percent – some of that was as a result of a particularly strong Q4.
The outfit did much better in Germany with three percent growth and services up by seven percent and supply chain by one percent.
“We are encouraged by our performance in 2016 in Germany and pleased with the progress we have made in France. In the UK, the second half performance has been in line with our revised expectations, set at half year after a disappointing first half performance,” stated the firm in the update.
“We expect 2017 to be another year of progress for the Group as we continue our momentum in Germany, maintain our position in France and marginally improve on our 2016 performance in the UK. While in the UK we are reliant on a small number of large opportunities, our Managed Services pipeline across the Group is strong,” the statement added.
Computacenter has reported a four percent profit loss for the full year claiming it “stumbled in Germany”.
The British company said its profits stood at £71.3 million in 2012, compared to £74.2 million in 2011.
It blamed the loss on higher costs from new contracts, which bled into margins in the services business in Germany, its second-largest market by revenue.
And 2013 doesn’t look to be an easy road with the company claiming that this year would be dependant on the speed of recovery from the “problem contracts” in Germany, which it said was unpredictable.
However, it wasn’t all doom and gloom with the company reporting group revenues jumping 2.2 percent to £2.91 billion compared to 2011’s £2.85 billion.
Mike Norris, Chief Executive of the company said: “We expect 2013 to be a year of progress for Computacenter. While the Group financial outcome for 2013 will be dependent on the in-year performance of Germany and the speed at which we recover from our problem contracts, which is unpredictable, we are confident that these contracts will improve.
“More importantly, winning, contracting and taking on new contracts successfully, is more fundamental to the long-term growth of the business and its strategic development. This will be underpinned by our new Group operating model, which has taken effect in the UK and Germany, since the start of 2013.”