Computacenter records fastest profit growth in 2020
Channel player releases full-year results showing that the business navigated the choppy waters of the pandemic successfully
Computacenter’s full-year results were never going to be anything but good after the firm had regularly issued trading updates and quarterly numbers showing decent progress throughout 2020.
The fact that the channel player has delivered a 6.8% improvement in revenues to £5.44bn and adjusted pre-tax profits climbed by 35.5% to £200.5m shows it was a solid year, but also a more remarkable one given the backdrop of the Covid-19 pandemic.
The UK performance was also something for the firm to celebrate, with revenues increasing by 11%, driven by a surge in demand in its Technology Sourcing operation, sparked by the pandemic. The firm also reported strong Services margins, partly benefiting from reduced external contractor costs.
Revenues in Germany slipped by 2.5%, with managed services and technology sourcing suffering declines. There were improvements in the Professional Services volumes, at higher margins, which helped operating profits improve by 38.1% year on year.
Just over the Channel, Computacenter’s French operation also struggled, with a slowdown in its large industrial user base and a decline in services business. The company is still growing its footprint in the North American market and there were signs of some issues in that territory, with a weaker-than-expected year and a marked reduction in activity by its higher-margin mid-market customer base hitting revenues.
The firm did acquire Pivot, and that business added $292.7m of revenue and $6.8m of adjusted operating profit in the last two months of the year.
“At the start of last year, our performance in 2019 set us a high bar for 2020,” said Mike Norris, chief executive of Computacenter. “The Covid-related lockdowns towards the end of the first quarter made improving on 2019 feel even more challenging.
“After multiple upgrades during the year and today’s excellent results, it is clear that the 2020 performance has exceeded all expectations and 2020 has seen the fastest profit growth that Computacenter has achieved in its 22 years as a public company. Clearly, the challenge it gives us is to grow again in 2021,”
Norris said the firm felt it had come into 2021 with real momentum and that gave it the chance to view the prospects for the rest of this year in a positive light.
“While Computacenter will always focus on the long term and resist the temptation of short-term actions to maintain growth, we feel the opportunity for progression this year, while not certain, is real,” he said. “We have come into 2021 with solid momentum and have experienced a very positive start to the year.”
Norris echoed the views of many across the channel around the role that technology will play in helping customers recover from the pandemic and drive their businesses forward.
“Growth rates are obviously difficult to predict as our geographies will come out of lockdown at different times, but our experiences of the last 12 months has convinced us more than ever that our customers will continue to invest in information technology and will require the services of Computacenter to enable them to do so,” he added.