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Computacenter boss shares coronavirus concerns after solid 2019
Last year was a solid one for Computacenter, but the firm's CEO has indicated that Covid-19 is making forecasting for 2020 a challenge
Throughout all of the quarterly updates last year, Computacenter kept investors informed about its positive progress, and has capped that off with a decent set of full year numbers.
The firm has released its full year results for 2019, which included adjusted pre-tax profits of £146.3m, which was a 24% year-on-year increase. Revenues were also up by 16%, coming in at £5.05bn.
Services revenue was up by 4.7% and technology services climbed by 20%. The UK was the black sheep compared with France and Germany, with the business here delivering a 1.8% decline in revenues with both services and technology sourcing revenues suffering. France and Germany, however, were up 15.7% and 5.2% respectively.
Computacenter CEO Mike Norris used most of his comments surrounding the results to concentrate on the issue of the moment, coronavirus, given that it will have such a significant impact on the 2020 fiscal year.
“As we stated back in January, the results for 2019 set a high bar for the business in 2020,” he said. “It is too early to predict the outcome for the year as a whole, and there is still much work to be done, particularly as we have not yet completed our first quarter.
“Our Services pipeline is the strongest we have seen for some time in both professional and managed services,” said Norris. “While we still believe customers will continue to invest in product, particularly in the areas of security, networking and cloud, it may well be difficult to achieve the same growth rates we have seen in recent years.
“The current Covid-19 outbreak makes forecasting the future even more challenging. In the short term, we are urgently supporting our customers focused on their business continuity plans, which involves the need for a greater degree of remote working.” he said.
Demand for laptops
One of the results of that shift towards more remote working has been a surge in demand for laptops, as more customers look to arm staff with tools to work at home.
“To-date, supply constraints from our technology providers have been minimal, although there are some concerns going forward,” said Norris. “We do however have some concerns that, in the medium-term, customers may postpone significant IT infrastructure projects while the current uncertainty remains.”
In yesterday’s Budget, the Chancellor of the Exchequer, Rishi Sunak, said that the government hoped the impact of the virus would be temporary. On Radio 4 this morning, he said the expectation was that the problems would last days and weeks rather than months and years.
Norris echoed that hope, and said that in the longer-term, the business would get back to a more normal footing.
“In the longer term, we feel more certain, either because when this crisis is behind us, life will return to normal and the fundamental business drivers for IT growth remain, or, if there is a long-term reduction in business travel and commuting with a consequent upsurge in remote working, it can only drive the need for technology even further.”
