Computacenter gives investors early birthday present

Computacenter is celebrating its 40th birthday next month and has given investors early reasons to cheer with half-year numbers that show the business is emerging from the pandemic in fine fettle.

The channel player’s half-yearly numbers for the six months ended 30 June included a 31.4%  rise in revenues and a 59.4% increase in adjusted profits before tax to £118.9m.

The business enjoyed the return of significant expenditure from industrial customers, along with momentum in the public and financial service sectors holding up.

In the UK, the business delivered revenue improvements of 9.4%, with technology service sales a particular highlight and professional services also benefiting from customers continuing to invest in digital transformation. A decent services margin and stable technology sourcing margins helped operating profit improve by 12.6% in H1.

German revenues improved by 10.5%; France, harder hit by the pandemic, saw a decrease in organic revenues of 8.5%; but the company’s US acquisitions have started to deliver, with 18.1% growth year on year.

“Computacenter is 40 years old next month and our ability to adapt to an ever-changing market has been paramount to our continued success,” said Mike Norris, chief executive of Computacenter. “This ability has been particularly prevalent over the last 18 months during the pandemic.

“The vast majority of our customers have returned to business as normal and, other than the reduction to our cost base due to the inability to travel and a continued improvement in the utilisation of our technical resources, Covid-19 is now having very little impact on our business.”

The pandemic’s impact might be easing, but supply shortages are becoming a bugbear for the industry, and Norris warned that it had now become its major challenge.

“While there has been, and will continue to be, pressure on our revenues, our position in the market as one of the larger players in most of the geographies in which we operate has enabled us to gain market share,” he said. “While we look forward to the supply chain issues being behind us, we are not expecting this until well into 2022 but, as you can see by the performance in the first half, we are rising to this challenge.”

Making comparisons with a year that was impacted heavily by the pandemic is difficult for any financial director, but Computacenter said it was determined to at least match the numbers it delivered in the second half of 2020.

“Computacenter is well set for our 17th year of uninterrupted earnings-per-share growth,” said Norris. “Customer demand is strong, we have record order backlogs for both technology sourcing and services, and we continue to push into new geographies and new markets both through acquisition and organic growth – all supported by our strong balance sheet.”

He concluded his statement to the market in a confident tone that is increasingly being echoed across other parts of the channel. “We are confident that the markets we serve will remain buoyant for the foreseeable future, and we believe that the range of service offerings we deliver have never been of such a high quality,” he said. “We embrace the future with optimism and confidence.”