Computacenter talks up market recovery as 2010 sales rise


Computacenter talks up market recovery as 2010 sales rise

Microscope contributor

Computacenter is bullish that the economic recovery is sustainable after reporting rises in product and services sales across the group for 2010.

The London-based firm today issued a trading update revealing services revenue on a constant currency grew 6% year-on-year as product sales boomed 15%.

Customers' appetite to reduce operating costs underpinned services growth and it was clear that improvements in corporate capital expenditure, noted last spring, were not temporary but proved to be more fundamental, said CC.

"Customers are refreshing, upgrading, improving and investing in their IT infrastructure," said Computacenter chief executive Mike Norris.

In the UK, total revenues grew 10% excluding the impact of offloading CCD to Ingram Micro, with services up 11% boosted by a stronger H2.

Product sales in the UK were more modest, up 9% due to a slowdown in Government spending in the second half of the year and a large product supply deal in late 2009 that was not repeated.

Market conditions in Germany strengthened quarter-on-quarter throughout 2010 after a challenging start, resulting in 8% growth excluding acquisitions. Services and product sales grew 4% and 18% respectively.

Computacenter said its operation in France had its best year for some time and was even likely to break into a small operating profit for the year with sales in local currency up 17%, as product rose 20% and servies grew 5%.

Cost reductions largely made in 2009 - restructuring the organisation with the loss of jobs and selling off CCD - increased the operational leverage of the business, said CC, but Norris said the market had also moved in its favour.

"There was a slight product revenue decline in 2009, mainly due to the economic environment. However in 2010 we have seen strong product revenue recovery and we anticipate that product revenue will grow steadiy in 2011, subject to the overall economic environment," he said.

Long-term servies contracts grew 8% last year and Norris claimed this remained "fundamental to the long term success for Computacenter".


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