Product not services hog Q1 limelight at Computacenter


Product not services hog Q1 limelight at Computacenter

Microscope contributor

Computacenter is flirting with the idea that the economic recovery may be more sustained after seeing renewed vigour in its UK product business during Q1 more than compensate for a slower start in its services operation.

In an interim management statement, the firm revealed group revenues grew 7% to £634.4m including the impact of disposals, acquisitions and minor currency movements, with product and services sales up 9% and 2% respectively.

"After a challenging 2009 for our product business, we saw a strong rebound in Q1 2010, particularly in the UK," said Computacenter boss Mike Norris, ahead of an AGM later today.

He said an 20% increase in product sales in the UK was "flattered" by one large project in the quarter but even without this impact and excluding CCD, revenues still managed to climb 10% while services growth was more modest at 3%.

"Whilst it is not certain that these [product] growth rates can be maintained throughout the year, the signs are encouraging. Our services business has seen slower growth than we have become used to, but we are expecting this to improve as the year progresses," said Norris.

This outlook for the hardware and software businesses is markedly improved on the picture Computacenter painted in January.

The start to 2010 in Germany was sluggish with services revenues down 3% and organic product sales growing just 1% (up 12% including the becom acquisition). The French operation grew services revenues 13% and product by 7%.

Despite the rise in the product business, Computacenter's net funds were £53.3m (£37.3m at the end of Q4) as it continued to benefit from an extended credit scheme with a major vendor valued in the region of £30m.

The next trading update is scheduled for 13 July.

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