Computacenter has released a trading update which signals a decline in year-on-year sales for the first half of 2024.
Despite rising technology sourcing in North America, the company foresees that overall technology sourcing volumes have stabilised compared to the exceptionally robust performance in H1 2023.
The resale and services behemoth reported a solid underlying performance in Germany and North America. However, it noted a weaker-than-anticipated demand for hardware in the UK, with customers exhibiting greater caution and taking longer to finalise purchasing decisions.
Computacenter’s committed product order backlog has grown significantly since the start of the year, driven by notable technology sourcing successes in North America.
The company projects that H1 2024 figures will be lower than the previous year’s. The adjusted profit before tax for H1 2024 is expected to be approximately £87 million, down from £121.8 million in H1 2023. This decline is attributed to adverse currency translation effects and the timing of specific large orders in North America, which have been deferred to the year’s second half.
The reseller highlighted an increase in strategic initiative investments, with an additional £6 million spent compared to the same period in 2023. The full-year investment is expected to remain unchanged at £28 million to £30 million.
Computacenter anticipates stronger momentum in the second half of the year, bolstered by the size of its committed product order backlog and a broader pipeline of opportunities.
While remaining cognisant of the ongoing geopolitical and macroeconomic uncertainties across its markets, the company continues to expect progress for 2024 at constant currency.
Computacenter will publish its half-year results for the period ending 30 June 2024 on Monday, 9 September 2024.
In light of the group’s strong favourable adjusted net funds position and currently anticipated capital needs, Computacenter has announced a share buyback programme worth up to £200 million.
The revenue decline continues a trend observed in the first quarter but has accelerated in the first half results. Technology sourcing revenue in the first quarter was down, returning to ‘more normal levels’ compared to last year’s period. This ‘normalisation’, coupled with the growth achieved in Germany in the prior year, impacted the quarterly performance.
On the services front, revenue during the quarter was below the previous year, with continued growth in professional services offset by the expiry of specific managed services contracts.
Additionally, Computacenter commenced a significant four-year public sector contract in the UK at the beginning of the second quarter, secured at the start of 2024.
