Computacenter see strong 2019 as revenues and profits grow

Computacenter PLC (LON:CCC) have dipped following a trading update published today.

Shares in Computacenter trade at 1,388p (-5.06%). 12/3/20 16:44BST.

Mike Norris, Chief Executive of Computacenter plc, commented: ‘As we stated back in January, the results for 2019 set a high bar for the business in 2020. It is too early to predict the outcome for the year as a whole and there is still much work to be done, particularly as we have not yet completed our first quarter. Our Services pipeline is the strongest we have seen for some time in both Professional and Managed Services. While we still believe customers will continue to invest in product, particularly in the areas of Security, Networking and Cloud, it may well be difficult to achieve the same growth rates we have seen in recent years.

Our current focus is on maintaining continuity for our customers for the services and products we supply as well as doing whatever we can to protect the health of our employees, customers and the wider community.’

Across 2019, the firm reported that revenue had risen by 16% to £5.05 billion – which the firm said was largely down to new acquisitions and merger deals.

Notably, Computacenter also noted that pretax profit surged 30% to £141 million – while the adjusted pretax profit figure was 24% higher at £146.3 million.

The firm added that its’ performance in France was particularly strong. In this sector, revenue growth of 16% was recorded totaling €644.9 million. Germany also performed strongly – seeing revenue growth of 5.2% to €2.23 billion.

Looking at UK performance – this market saw revenue fall 1.8% to £1.58 billion, whilst revenue in America surged to $986.6 million due to an acquisition at the end of 2018.

The firm also said that trading going forward will be more tough, with the recent outbreak of the coronavirus.

Computacenter commented: ‘The current COVID-19 outbreak makes forecasting the future even more challenging. In the short term, we are urgently supporting our customers focused on their business continuity plans which involves the need for a greater degree of remote working. We have seen a surge in demand for laptop computers for this purpose. To-date, supply constraints from our Technology Providers have been minimal, although there are some concerns going forward. We do however have some concerns that in the medium-term, customers may postpone significant IT infrastructure projects while the current uncertainty remains’.

Third quarter shows strong gains for Computacenter

In October, the firm saw its’ shares in green following a confident third quarter update.

The FTSE 250 listed firm said that their outlook remains in line with its existing expectations, which were upgraded back in July.

“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.”

Additionally, the group saw ‘pleasing’ revenue growth over the comparative quarter within technology sourcing in the UK.

In Germany and Europe, it continued to perform strongly throughout the quarter, with shortfalls from its international sector customers significantly exceeded by increases from the public sector, it said.

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 company said.

Expectations pay off

A few weeks on, the firm once again saw their shares in green as they remained confident to deliver a strong set of full year results.

Profitability and earnings per share are on track to beat full year expectations, the IT supplier said, which spiked shares.

“The strong 2019 performance is coming from Computacenter’s established businesses and, in the second half of the year, from the acquired business in the US which is now performing in line with our expectations following a difficult start to the year,” the board said.

The firm said that it has not suffered a blow from existing difficult contracts, that bruised performance in the second half of 2018.

“The group has not seen a repeat of the negative impact that occurred in the second half of 2018 due to contract provisions and these existing difficult contracts continue to perform in line with, or slightly ahead of, our expectations,” said Computacenter.

In fact, they “continue to perform in line with, or slightly ahead of our expectations”, the company said.

“Computacenter’s board acknowledge, as is the case every year, that there is still a significant amount to do in December, which is always our busiest month of the year,” it added.

The cyber security firm said revenue rose 9% year on year for the quarter ending in September. Revenues were totaled at £170 million.

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