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Computacenter reports weak UK sales

IT services firm Computacenter experienced just 1% growth in its UK business during the first half of 2011.

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IT services firm Computacenter experienced just 1% growth in its UK business during the first half of 2011.

The company's client base in the UK is predominantly in financial services, but it also counts WM Morrison supermarkets and Marks & Spencer as customers.

"During the period we have had several new contract signings and we exit the first half with a strong pipeline. As a result, we expect the growth rate to return to more normal levels when the new contracts commence service and billing in the months ahead," the company said in a trading update.

Computacenter's product sales in the UK also declined by 23% in the first half, but the company said this has not had a corresponding impact on profitability due to increased margins in both product and services.

The firm had managed to weather the recession until now, but seems to have finally caught up with the frugal spending realities of IT buyers in the UK.

Despite the downbeat news, Computacenter said in its trading update that profit for the second half of this year would be "comfortably ahead" of the £21.3m reported for the same period last year.

Overall, the first half of the company's financial year ending 31 December 2011 saw revenue growth of around 6%, with sales growing by approximately 4% excluding acquisitions.


Photo: Creatas Images

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