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Computacenter provides investor cheer with H1 results

Channel player on course for another year of growth after producing a decent set of numbers for the first six months of 2023

Computacenter has delivered a reassuringly solid set of numbers for its first half, revealing increased revenues across all segments of the business.

The channel player saw revenues improve by 26.8% to £3.58bn for the six months ended 30 June. The Technology Sourcing business delivered a 33.5% improvement, and services climbed by 8.5%. Pre-tax profits improved by 13.9% to reach £122.8m. Inventory levels have reduced to almost normal levels, which has had a positive impact on the firm’s cash position, and the business is continuing to invest, to the tune of £13m, in improving its competitive position and enhancing long-term resilience.

The UK delivered 8.7% growth in gross invoiced income in H1, which was fuelled by an ongoing move away from hardware to software. To counter economic conditions and get the business on a stronger footing in the UK, Computacenter has taken a few steps in the first half, including introducing a fresh leadership and structural changes to focus on the target market and maximise growth. There has also been a continued effort to make sure large customers are well served and the strategy has been streamlined to cater to a core set of enterprise organisations in the private and public sectors.

Most of the recent acquisitions made by Computacenter, including Business IT Source (BITS), which was picked up in July last year, have been made to drive growth in North America. H1 numbers indicated that the plans were working, with the first half, excluding BITS, producing organic revenue growth of 30.9% in constant currency. Excluding BITS, North America’s adjusted operating profit was up by 26.6% to $33.3m.

Both Germany and France continued to build on strong momentum in 2022, and both regions continued the growth experienced by the group in H1.

Mike Norris, chief executive of Computacenter, said the results in H1 would help the firm deliver a decent 2023. “Our performance in the first half sets us on course for our 19th year of uninterrupted full-year adjusted diluted earnings per share growth. Coupled with this first half performance, we have seen good progress in Q3 to date,” he said.

“Due to the industry returning to normal supply conditions, we have seen a significant generation of cash as our inventory has reduced in the first half of 2023,” added Norris. “We expect this to continue in the second half, which will leave Computacenter with a strong balance sheet by the end of the year.”

Market position

He added that the firm continued to keep a sharp eye on costs, following a strategy that would improve its market position.

“The investments we are making, predominantly through our profit and loss account to make Computacenter a more secure and competitive organisation, are progressing well and continue at pace,” he added. “We are as excited and optimistic about the future as we have ever been.”

The results have also further underlined the benefits of a channel player offering with a good product mix to offset some of the dips that can occur in the market as a result of the challenging economic conditions. TD Synnex and Midwich have also both recently highlighted the positives of operating with a wide portfolio and a varied customer base.

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