Computacenter CEO talks of users’ ‘robust’ IT commitment

Profits might be down, but there are reasons to look ahead with some confidence as the channel player shares its interim first-half numbers

In many respects, the channel, like the rest of the country, is still taking in the sad passing of Queen Elizabeth II. Events, launches and the release of research findings have been delayed following the death of the monarch yesterday.

However, some scheduled events run to a predestined timetable, and so it has been with Computacenter’s interim results for the six months ended 30 June 2022.

The channel player’s financial update revealed that revenue had grown by 16.6% to £2.84bn, and adjusted profit before tax was down by 5.9% at £111.9m.

Unbalanced demand was the main issue in the UK, with a revenue decrease of 7.1% in the period as demand, particularly for workplace roll-outs delivered by the technology sourcing business declined.

Higher-margin datacentre business was up in the UK, but not enough to offset some of the decreases elsewhere and the firm also saw its gross margin income hit by increases in low-margin software and resold services.

Germany was a plus point, with a revenue increase of 10.2% and both technology sourcing and managed services in demand. France also saw a return to growth in the technology sourcing business as customer demand picked up and margins improved, with some users investing in server racks installations.

A theme of recent results has been the success of Computacenter’s US business, and again that was a feature, with the territory delivering revenue growth of 48.3%.

Mike Norris, chief executive of Computacenter, said it had anticipated profits being down, but there were reasons to look into the second half with positivity.

“As we have predicted and announced on multiple occasions, profitability for Computacenter was down in the first half of 2022 compared to the same period last year. However, we remain on track to deliver our stated expectations of profit growth for the year as a whole,” he said.

Norris added his voice to a growing number that are reporting that supply chain issues that have plagued the channel for the past couple of years are finally starting to improve.

“With the exception of networking products where difficulties still remain, supply chain challenges have eased materially in the last three months,” he said. “However, our customers have become extremely sensitive about supply chain shortages, and as such require us to hold more inventory, impacting our balance sheet. In almost all cases, there is a guaranteed sale on the inventory items.

“The continuing strength of our balance sheet gives us a significant competitive advantage in being able to support our customers’ requirements in this manner. How this will unravel as customers get used to the freeing up of supply remains to be seen.”

Norris also spoke of the market conditions and gave some cheer to those fearful that macro-economic headwinds could undermine the tech channel.

“Our customers’ commitment to investment in technology feels extremely robust despite well-publicised and difficult economic conditions around the world,” he said. “This gives us confidence for 2023 and beyond.”

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