Servicesboost Computacenter in Q1 as product sales dip

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Servicesboost Computacenter in Q1 as product sales dip

Paul Kunert

Computacenter managed to come through a recessionary first quarter relatively unscathed after revenues at group level dipped 1% year-on-year to £602.4m, despite a drop in UK product sales.

In an interim management statement, the firm said the marginal decline in turnover was consistent with plans to improve the return on capital employed as it continues to "sharpen our focus as a services and solutions company".

"Our services business has again performed well across all countries, as companies continue to look to reduce operating costs. Our product business has been challenged due to some reduction in capital expenditure by our customers," it said.

Revenues had also benefited from favorable foreign exchange rate translations and from the absence of the Easter holiday period which fell in Q1 last year.

The UK outfit was the worst performing country across the business with revenues falling 12%, however operating profit was ahead of the same quarter last year, "aided by steady services growth of 6% and a vigorous focus on operating costs".

As revealed by MicroScope earlier this year, Computacenter has closed its SME tele sales operation, the Customer Coverage Unit and restructured the UK business to drive services-based projects.

The company said it was on course to reduce expenses by £15m annually at the end of 2009, which would result in an exceptional charge of £5m for the year.

Revenues in Germany and France grew 16% and 8% respectively to £218.9m and £69.8m with significant improvements in both services businesses.

"While the economic climate is having some impact on capital projects and our product business, our growth in services and our cost reduction activity are expected to at least offset this impact," said Computacenter.

"While much remains to be done, particularly the commencement of recent services contract wins, the business remains on track as a whole," it added.

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