Computacenter provides investor cheer with H1 update

Computacenter has seen its share price rise on the back of a trading update that signaled it would finish the year ahead of expectations.

The channel player followed up on a strong Q1 with a trading update that covered the period to the end of June and has kept the momentum going.

The update indicated that the Technology Sourcing business was performing well and that had helped it deliver pre-tax profits ahead of the first half of last year.

"The strong 2019 performance is coming from Computacenter's established businesses. In fact, the acquired business in the US has underperformed our expectations to date. Although it remains profitable and the recent US performance has been encouraging, it has been immaterial to the Group and more than compensated by the strong organic performance from the rest of Computacenter," the update stated.

Computacenter splashed out $70m on San Francisco-based professional services player FusionStorm in October 2018. That deal came just a month after it had snapped up Misco’s operations in the Netherlands.

The firm is looking forward with a degree of confidence into its second half because it is dealing with different conditions compared to last year.

"The negative impact in 2018 due to contract provisions was substantially incurred in the second half of that year, which makes the comparative in the second half of 2019 significantly easier to achieve if this is not repeated. The Group considers that, based on the current information, the provisions on certain contracts will reduce significantly in the second half of 2019 and this forms part of a recent encouraging reforecast of the second half of the year reviewed by the Board," it stated.

That has left investors looking at a good end to the fiscal year with Computacenter forecasting that both profits and earnings per share will be ahead of market expectations.