Such was the way that Greg Lock, chairman of the Europe’s largest reseller/services company, Computacenter, described 2012. The ‘pain’ as such was mainly confined to Germany (‘wrong sort of contracts’ – or at least, ‘wrong sort of time for contracts’) and France (restructuring and investment).
The ‘gain’ was definitely in the UK, where revenues grew by 8.5% to £1.2bn, 41% of the group. Services were the UK stars – revenues rose by 15% to £431m (36% of UK total) and service margins expanded even faster. Indeed, services gross profit comprised over half the UK total for the first time (which also speaks volumes about product margins, of course).
At the headline level, group revenues increased by 2.2% to £2.91bn (+6.5% in constant currency) in line with January's trading update (see here). Gross profit fell 2% trimming 60bps off the gross margin, to 12.8%. Operating margins declined 30bps to 2.2%, reducing pre-tax profit by 10% to £64.8m. EPS was 18% light at 32.4p.And there's good news for shareholders - Computacenter will return another £75m in cash over and above the normal div.
CEO Mike Norris was, as ever, pragmatic about the future. At group level it will basically all depend on Germany, a business now equal to that of the UK in revenue terms (it was larger!) but with little over 20% of the profit.
We will be speaking with management and will write more in due course.