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Computacenter updates investors on strong finish to 2021

Channel player reveals revenue growth that exceeded expectations as it shares some pre-close details ahead of full-year numbers later this quarter

It is not just investors that chart the progress of the bellwethers in the channel to get a sense of where the market is heading.

Anecdotal reports of a decent 2021 are reassuring, but trading updates and results from the likes of Computacenter, Softcat and Bytes are important in putting some numbers to that positive sentiment.

Computacenter is a reliable source of positive vibes, and has been so again with its pre-close trading update, issued this morning.

The firm revealed that for the fiscal year ended 31 December 2021, it finished with a strong fourth quarter, ahead of expectations.

“We now believe adjusted profit before tax for the year will be slightly in excess of £250m and the group will deliver its 17th year of uninterrupted earnings per share growth in spite of head winds from a strong pound and product supply shortages,” the firm stated.

A full set of results will come out mid-March, but investors were given a peek into what is coming. Computacenter revealed a 23% rise in total revenues, fuelled by acquisitions over the past couple of years.

“During the year, we experienced the highest growth in services revenue for the last 20 years, coupled with continued strength from technology sourcing product sales, which was more broadly based in 2021 than the previous year,” the firm added, to indicate where growth had been coming from.

Looking ahead, Computacenter revealed that its product order backlog was at an all-time high, with shortages and pent-up demand characterising the market at the moment.

Computacenter also highlighted the performance of its services business and indicated it expected to repeat growth on that front across the rest of 2022.

“While, as always, there is much to do, we enter 2022 growing in multiple geographies, across product and services, which means we feel the business is well placed for another year of progress,” the update stated.

Looking back, the channel player entered 2021 on the back of a very strong fiscal 2020, delivering a 6.8% improvement in revenues to £5.44bn and adjusted pre-tax profits up by 35.5% to £200.5m.

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.

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