Computacenter on track for another strong year

Few things are predictable in the channel, but when it comes to the financial results from the largest channel players it would be hard to envisage a moment when they disappointed.

Computacenter has been chief among those leading the way, with the firm managing to deliver 16 years of continual growth.

Its latest trading statement, covering six months to 30 June, indicated that the trend is set to continue with a robust performance from the Group.

With business improving in the second quarter, the firm is set to deliver adjusted pre-tax profits that are around 50% ahead of the same period last year. There has been a decent organic growth in both technology sourcing and services growth in the UK, Germany and the US.

As like the rest of the industry, Computacenter has been juggling supply chain issues, with the firm did noting that its results would have been on track to be even better had the situation been different.

“There have been substantial supply shortages in the industry caused by the shortage of key components, and we have seen a strengthening of the pound against other currencies. Without these two factors, our profitability would have been even further ahead,” the company said.

The UK fared okay, with the second quarter improving, but it is also going to be difficult to make comparisons with a period that was characterised by rapid spending from customers to enable flexible working during the height of the first lockdown in 2020.

Elsewhere across the Group, the German business got a mention with its base of industrial clients now being back online in a way they weren’t in the same period last year. The US business, which was bolstered by acquisition in 2020, also started to deliver to the bottom line.

Recent acquisitions also played a part in the French performance, with a contribution from the networking business addition late last year.

Those wondering what the second half holds will have scanned the trading update for comments about future performance and found that a mixed tone is being set by the firm.

“As we enter the second half of the year our services backlog and more particularly our product backlog, across all geographies, are at a record high which gives us a high degree of comfort,” said Computacenter. 

“We do, however, remain concerned about product shortages within the industry, and obviously further strengthening of the pound would create a stronger FX translation headwind, but we are not predicting either of these headwinds to get any worse.

“After a record breaking performance in 2020, as we entered into 2021, there was some understandable scepticism as to whether Computacenter could continue with its 16 years of uninterrupted earnings per share growth.

“Given the performance in the first half, the current backlogs and the forecast to the end of the year, while nothing in life is ever certain and we face a stronger comparative in the second half, it is highly likely that 2021 will be another year of substantial progress for the Group,” the trading statement added.