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Computacenter files solid 2010 financials

Microscope contributor

Computacenter (CC) released a solid set of 2010 financials this morning that were underpinned by corporate customers replacing ageing infrastructure kit and a steady growth in services.

The services-based reseller group made an operating profit of £66.1m, helped in no small part by the £30m cost reduction in 2009, and posted a 6.9% rise in revenues to £2.68bn.

"After the significant product revenues decline experienced in 2009, during 2010 customers embarked on refreshing, upgrading and improving their IT infrastructure," said CC chief executive Mike Norris.

Group product sales jumped 14.7% in constant currency excluding the impact of the CCD disposal in late 2009 but including the acquisitions around the same timeframe of Thesaurus and becom.

Services sales across the group grew 8.7% and the annual services contract base at year-end jumped 9.3%.

The dynamics in the services market played to CC's strengths it said: "As customers choose to outsource IT infrastructure support selectively, rather than opting for a comprehensive IT outsourcing contract or undertaking the work in-house."

CC ended the year with net cash of £110m including customer specific financing but it said the "figures are flattered" by the continuation of extended credit terms from one major vendor of around £38m. 

UK revenues went up 10.8% to £1.27bn excluding the numbers from the CCD distribution business and operating profit was up 14.5% to £43.3m.

CC said the operation saw "healthy" sales of product and services as customers ramped capital expenditure, however the reseller noted the VAT increase this January did not serve to drive a spike in Q4 demand.

In particular, UK services grew 13.9% to £380m in a market that remained largely flat according to number crunchers Gartner.

It was a "year of two halves" for CC's German business, which pushed up revenues 12.2% to £1bn and operating profit by 8.8% to £20.4m, as the  "general hesitancy in the market" for cap-ex in H1 improved dramatically in the second half.

The operation in France returned to an operating profit of £1m compared to a loss of £2.65m in 2009, though the numbers were boosted by a change in tax expenses of £857,000. Sales went up 16.9% to £360m.

CC revealed earlier this year that it plans to use its stockpile of cash to fund acquisitions and has already splashed £17.6m on French reseller Top Info.

It is also investing in a group-wide ERP implementation, completed in Germany last month with migration in the UK scheduled to follow in Q3, and has made the first tentative steps into cloud-based services with the January launch of C3Mail.

Norris said the market outlook also provided reasons to be cheerful.

"The early indication of improving corporate capital expenditure, first detected some 12 months ago, has persisted, to the extent that we have now gained a high level of confidence that Computacenter's progress is sustainable and not of a short-term nature," he said.


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