Computacenter delivers solid third quarter

Digital transformation is driving the numbers in the right direction for Computacenter with the channel giant reporting a decent third quarter.

The firm issued a trading update this morning for the three months ended 30 September with it "well ahead" of the same period last year. This will not have come as much of a surprise to investors that had been given indications that after the first half Computacenter had been expecting things to upturn in the second half.

"Following the challenging first-half comparison, the Group has, as expected, comfortably beaten its prior year third quarter comparative with the positive momentum seen in the first six months of the year continuing throughout the quarter. The Board's outlook remains in line with its existing expectations, which were upgraded as per the Group's Trading Update on 31 July 2019," the firm stated.

The UK got a mention for decent revenue growth in its technology sourcing division and germany and France also made strong contributions. The firm has been building up its presence in the US and saw that territory return to both revenue and profitability growth in Q3.

There was a sense that managed services revenues were continuing to ramp up, although losing out on a bid in France was a sore point, and the focus was on closing out the year strongly, with digital transformation continuing to spur customer spending.

"Well publicised challenging economic conditions are affecting some of our customers however, to-date, this has been more than compensated by the drive to digitalise across the entire marketplace," the firm stated.

"While the fourth quarter is always the most critical to the year's performance, the Board's confidence with its current expectations continues to strengthen as we progress through the year," it added.

The Computcenter numbers follow on from a similarly solid performance from Softcat last week, with the firm reporting its full year numbers.

Softcat ended the year to 31 July with revenues up by 34% to £991.8m and operating profits of £84.5m.

"It's been another great year for Softcat in which we have delivered strong growth and financial success, but most importantly we have continued to strive to provide a first class service to our customers while at the same time expanding our offerings to them," said Graeme Watt, Softcat CEO.

"This success demonstrates how our straightforward strategy continues to be well-executed by the team. Whilst our key aims of winning new customers and selling more to existing customers remain unchanged, we are doing much to further expand our addressable market and as a result the Company enters the new financial year in a strong position and with good momentum," he added.