Computacenter enjoys strong finish to 2022

Quarterly and full-year numbers from the likes of Computacenter, Softcat and Bytes are always pored over by market watchers, but more so now given the uncertain economic climate.

Updates provide investors and the rest of the channel an opportunity to gauge how inflation, high energy prices and general trepidation about IT spending are impacting financial performance.

Computacenter gave those market watchers plenty of food for thought as it released a pre-close trading update covering its fiscal year that ended on 31 December 2022.

The firm managed to close out the year with a strong fourth quarter and is set to add another fiscal year of growth to the growing tally.

“Computacenter finished the year with a record fourth quarter, which will result in an 18th consecutive year of underlying adjusted diluted earnings per share growth, and a 2022 full-year result which is slightly ahead of the guidance given by the group in its Q3 Trading Update,” the business stated in the update.

The strength of the US dollar contributed to the business but there were warnings that economic headwinds were having an impact.

Technology sourcing product sales were “extremely buoyant to the end of the year” and the firm also saw its services revenues hold up. Margin performance on that side of the business was impacted by a number of factors, including inflationary pressure, and that is set to continue this year.

Computacenter also provided an update on inventory levels and indicated that, after budding up stocks to deal with supply chain issues, the situation had improved in the back end of 2022 and would ease further as it moved deeper into a fresh fiscal year: “We expect our levels of inventory to reduce further in 2023, towards historical normal levels, as this trend continues.”

The impact of the coronavirus pandemic was reported to have “washed through” the results, with trading having returned to a normal footing.

Pre-tax profits dropped by almost 6% in the first half when compared to the previous period, but the update signalled that there had been a strong rebound in the second half of the year and that momentum was been carried through into the start of 2023.

Acquisitions the firm has made, particularly in the US, have contributed to the bottom line, and the update also talked up the prospects for the year ahead.

“Computacenter has an ambitious investment programme within the business, particularly in systems, to enhance our competitive position and sustain our long-term performance. Despite the uncertain macroeconomic outlook within a number of our core countries, and our substantial investment programme, we expect 2023 to be another year of progress,” the firm stated.

“We are encouraged by our customers’ continued investment in technology, and we are as bullish as we have ever been about our target market and competitive positioning,” it added.