Computacenter profits up a quarter despite UK weakness


Computacenter profits up a quarter despite UK weakness

Alex Scroxton

Computacenter has turned in pre-tax profit for the first half of £26.2m, up 25%, on sales of £1.37bn, up 6%, following a strong product performance in its performance in mainland Europe, which masked the impact of continued weakness at its UK business.

Although Computacenter's continental business ticked over nicely, the UK was the black sheep of the family during the first half, with services sales flat, up just 0.7%, and product sales down over 20%, prompted by a "shift in the spend profile" of major customers.

The integrator also pointed out that it enjoyed a particularly buoyant first half in 2010, which in its opinion made for a "more challenging comparison."

UK sales were down 16% to £547.3m, and adjusted profitability was down 8% to £16.7m. In its statement to the City this morning, Computacenter said: "Given the 16.0% decline in revenue, the decrease in profitability points to stability and increased resilience across the UK business as a whole."

However UK-based analysts were quick to note that the German business accounted for revenues of £580.3m, higher than the UK by a considerable margin. Anthony Miller of TechMarketViews noted that the uncertainty over the future of HP's PSG business would "surely add uncertainty to Computacenter's product business."

Computacenter chief exec Mike Norris said: "While much remains to be done and economic uncertainty persists, we remain on track to achieve the Board?s expectations for 2011. We are not expecting our German business to grow at the same rate in the second half of the year, as the comparatives become materially more challenging.

"Conversely, but to a lesser extent, comparatives in our UK business should be somewhat easier than in the first half," he added.

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