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Computacenter adds to picture of strong Q4

Channel player issues trading update that adds to a growing list of evidence that H2 and the last few months of last year were robust for the channel

It is becoming clear that for many channel players, the second half of last year – and the last couple of months in particular – were strong.

Earlier this week, AV distributor Midwich Group revealed that it had seen a strong November and December and its second-half performance had helped it rebound from a coronavirus-impacted H1.

Earlier this month, Softcat also shared some thoughts on the last three months of 2020, saying in a trading update: “The corporate picture has continued to improve but is also somewhat mixed, with some customers pursuing large projects and others taking a more cautious approach.”

That has now been followed up by a trading update from Computacenter that adds a few more brush strokes to the trading picture.

The firm has issued a pre-close trading statement and raised its guidance, thanks to the strength of the business towards the end of 2020.

“Computacenter’s trading has continued positively through to the end of the year, which enables us to increase our guidance further from that last given on 10 December 2020,” said the firm. “We now believe adjusted profit before tax for the year as a whole will be in excess of £195m.”

Total revenues across the group increased by 8%, with the acquisitions sealed in November of Pivot Tehnology in the US and BT Services France, already feeding into that performance.

Computacenter is also reporting growth in its technology sourcing product sales into the public sector and customers looking for services. But the manufacturing and industrial sectors have been hit by the effects of the coronavirus pandemic.

Services revenues remained broadly flat across the group and Computacenter leaned more on its own staff and reduced the use of contractors last year, helping it to improve margins. Restrictions imposed by Covid-19 around travel also had a positive impact on the balance sheet, with the channel player able to trim costs.

Looking ahead, the firm gave an upbeat assessment, indicating that already in the first couple of weeks of 2021, the sales activity generated in recent months has continued.

“The positive momentum we have seen in trading since the start of the pandemic shows no sign of abating, and our pipelines for both technology sourcing and services are as strong as at any time we have seen in the last year,” said the firm.

“While it is impossible to predict when or how our customers will react as the pandemic reduces its impact on our day-to-day lives, given the momentum we have in the business, which is obviously further aided by our acquisition in the US, we are as confident as we can be at this stage that 2021 will be a year of progress for the group.”

Computacenter will publish its full-year results next month.

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