Softer market in the UK hits Computacenter in H1

Computacenter has shared its first-half (H1) year numbers with “soft” conditions contributing to a 11.6% decline in revenues.

The six months ending 30 June were always going to be difficult due to the channel player comparing numbers with a strong equivalent period last year.

The firm saw its gross invoiced income decline by 10.3% in constant currency to £4.5bn, with total revenues coming in at £3.1bn. Technology sourcing revenues fell by 14.8% and services was flat year on year (YoY).

Computacenter indicated that the demand for hardware in the UK had been weaker than expected, with customers cautious about making spending decisions. The move of some significant contracts in the US from H1 to the second half also didn’t help H1 numbers.

Computacenter benefitted from a wide geographic reach, and while the UK might have suffered software trading conditions, that was not the case elsewhere.

In the North American market, the firm was comparing H1 with a strong 2023, but there were continued signs that the business is developing and Computacenter was able to build its position in a fragmented market.

Germany was affected by the underperformance of a major managed service contract, but the business was continuing to lean on its networking and security expertise to keep the business moving forward in the second half.

Computacenter continued to invest in its business in H1, making sure it is well-positioned to support technologies such as artificial intelligence, with spending increasing operating costs by £5.7m YoY to £17.6m.

Computacenter CEO Mike Norris was realistic about how H1 had gone, but struck a more positive note about the prospects for the second half.

“Our performance in the first half largely reflected the expected normalisation of technology sourcing volumes against an exceptionally strong comparative,” he said.

“We have made an encouraging start to our third quarter and continue to expect stronger momentum in the second half, resulting in progress in the full year on a constant currency basis.”

Computacenter is pursuing a strategy of developing relationships with major customers, with Norris indicating that progress had been made on that front in the first half.

“We have executed well against our strategy by adding seven ‘podium’ customers in the half, broadening our customer base in North America. Professional services has also delivered good growth, leveraging our experience in Germany into other markets,” he said.

“We continue to invest in new systems and tools to ensure Computacenter’s continued success while maintaining our strong track record of delivering shareholder returns.”

Computacenter is expecting momentum will pick up in the second half, and Norris indicated it had already started Q3 positively. The firm stated that it was well-positioned with its technology sourcing and services businesses to tap into the growing interest from customers in technology innovations.