Year starts strongly for Computacenter

A trading update from the channel player has indicated that Q1 was better than it had expected

Computacenter has indicated that this is potentially shaping up to be a good year with the first quarter going better than it had expected.

The firm provided investors with a trading update which revealed that it was prepared to reveal ahead of its Q1 numbers coming out that the year had started well.

"While it is still early in the year, the first quarter's performance has been better than expected, particularly for our Supply Chain revenues. This leads the Board to believe that 2018 is likely to be a year of further progress for Computacenter in profitability as well as earnings per share," stated the trading update.

Group revenues in the first three months increased by 23% with services turnover improving by 2% and supply chain hitting 33%.

Investors were warned that there had been a one-off software licence sale in the UK, which had been worth £34.1m. But even without that Group revenues were up by 19% and supply chain improved by 27%.

Turning to the UK the revenues increased by 31%, or 21% without the software licensing deal. Supply chain was again strong, with a 52% improvement, but services revenue decline by 7%. Germany was up by 19% but France was flat in Q1.

The narrative from Computacenter throughout last year was that digital transformation projects were helping drive its business and that remains that case in 2018.

"As we have predicted, our customers' drive to digitalise their business has driven strong demand for our Supply Chain revenues, particularly in the UK and Germany," the firm stated.

There was a note of caution about the impact of changing business models and the impact on the numbers as the services business continued to adapt to changing customer demands.

"We are responding to our customers' desire to take cost out of long-term support contracts by increasing the competitiveness of our Services offerings through productivity improvements which protect our profitability. However, this market trend does put corresponding pressure on our Services top line growth which is currently being more than compensated by the Supply Chain performance," the firm added.

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