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Computacenter UK product sales floored by gov budget cuts

Microscope contributor

Government austerity measures took a toll on Computacenter's (CC) UK numbers as product sales fell by double digits in the calendar year to date but growth in services and continental businesses steadied group figures.

The services-based reseller today issued a trading update to the City, revealing that group revenues are up 2% year-on-year, including a 6% hike in turnover from services and flat product sales.

But the most striking development was the massive decline in UK product sales of 23% as the public sector budget cuts, which CC first pointed to in Q3 last year, were felt more acutely as was the impact of a one-off large deal a year ago.

"The government spending reduction has a more meaningful impact in Q1, due to this being the largest quarter for government expenditure," said CC.

However, it played down the affect slipping product sales on contribution and profitability, and pointed to the 3% rise in UK services revenues, talking up the business pipeline for the rest of the year. .

In Europe, CC's German operation grew product and services revenues by 28% and 9% respectively, while in France product sales climbed 22% and services 10%, offsetting challenges in the UK and keeping 2011 numbers on forecast.

"We remain confident that 2011, as a while, will be another year of improvement for CC's performance. Our services growth is solid across the group and we have again benefited from our portfolio of countries, in the product business.

"While much remains to be done, we are trading in-line with management expectations for the year," CC added.


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