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Computacenter warns on profits

Antony Savvas

Computacenter has issued a profits warning to investors as a result of a 10% decrease in sales so far this year.

The company said the shortfall was mainly down to lower product sales rather than declining service revenues.

“We are projecting product revenues for the balance of the year to be broadly similar to last year, and margins to be lower for the rest of the year," said the company. "Therefore, unless market conditions change, Computacenter's profits for the year will be substantially below last year.”

As a result of the warning, Computacenter shares dropped more than 9.5% in value on Wednesday morning. Kate Hanaghan, an analyst at Ovum, said Computacenter had to do more to boost its service revenues in the face of falling product sales.

She said, “Computacenter is currently placed third in our ranking of support services suppliers. If it is to stand a chance of catching IBM and HP, it's got some pretty intense work to do.

"This news further demonstrates that corporate IT is without doubt an incredibly difficult place to be. The margins just keep getting tighter and the customers just keep on yelling ‘more for less!’”

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