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Computacenter has issued a pre-close statement prior to announcing its full first half results at the end of August. Group revenue for the the six months to end June declined 2%, while Group services revenue increased 2%. Supply chain revenue (i.e. resale) was down 4%. Computacenter’s cash position remains strong. In May the company said it would return an extra £75m to shareholders (see Computacenter deals the dosh). Excluding that outflow of cash, the company would have achieved a £9m increase on a like-for-like basis versus last year.
Computacenter has long been preparing the City and industry analysts for a more subdued performance in the UK services business. The second quarter of 2012 was always going to be very hard to improve upon following a “substantial volume of take-on billing” during the period. As a result, Computacenter says Q2 in 2013 will be flat versus last year. However, the services business continues to perform strongly and the company reports that in the past few weeks it has “reached exclusive negotiations” on a number of new contracts. If those do indeed flow through, growth in the services business will be assured into next year and beyond.
Computacenter’s services strategy has served it very well (the UK services business grew a commendable 15% in FY12). In particular, my view is that the UK team has become very good at picking the right contracts and then bringing those contracts on-stream in a very efficient manner. TechMarketView subscribers can read this recent research note on the company: Computacenter: Focus and growth. If you would like to become a subscriber, please contact Deb Seth (dseth@techmarketview.com).
