Weak UK market conditions impact Computacenter's Q3

After a strong first half the third quarter has been more subdued for the channel player

The third quarter has proved to be a challenging time for Computacenter in the UK with weaker market conditions...

having an impact on the channel player. The firm released a trading update that indicated that revenues declined for the three months to 30 September by 3% from £931.9m to £900m, compared to the same period last year. Services revenue improved by 1% but the technology sourcing side saw a 5% decline over the three month period. The performance of the UK business was the standout with revenue falling by 9% year on year to £296m with services revenues down by 4%.

The performance in the German market was also subdued with just 1% growth in the quarter to £451m and the French operation saw things slip by 6% year on year. The international business improved by 13%, bringing in £34m.

But those numbers come on the back of a strong first half and the firm has been keen to point out to investors that not only do its forecasts for the financial year remain on track, but the recent acquisitions it has made will start to contribute in future quarters.

Computacenter has recently splashed out for Misco's operations in the Netherlands and US services player FusionStorm.

"While the overall growth rates in the third quarter in isolation are subdued compared to recent quarters, as mentioned above, the third quarter presented a more challenging comparison. Our expectation for the fourth quarter is for improved growth before acquisitions but not to the levels seen in the first half of the year," the firm stated.

"As we look out further into the future our pipeline for Professional Services is building nicely while the Infrastructure Managed Services market place is somewhat more challenged which is making growth more difficult. However, we remain confident in our ability to gain Infrastructure Managed Services market share due to our focus on innovation and productivity improvements," the trading update added.

The firm reassured investors that the outlook for the Group's trading for the financial year remained in line with expectations.

"The core technology drivers of digitisation, Cloud, Security and Network capacity improvement remain robust and these drivers, coupled with our recent geographical expansion, should position us well for future growth into 2019 and beyond," it stated.

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