UK back to growth for Computacenter

The return of the UK to growth and a strong performance in North America helped Computacenter deliver decent half-year numbers covering the six months to the end of June.

The channel player saw the arrows pointing in the right direction, with revenues improving by 28.5%, coming in at £3.99bn, up from £3.10bn in the same period last year. Gross profit increased by 8.6% and adjusted operating profit by 4.2%, fuelled by a strong performance in the UK and North America.

Technology Sourcing gross invoiced income (GII), which is the line on the balance sheet that means a lot to the channel, improved by 29.8%, coming in at £4.8bn. Revenue from the Services business was not quite at that scale, improving year-on-year by 1.5%. Professional Services was up by 6.5%, but Managed Services was flat.

The story in terms of regions was positive from UK and North America, but concerning from Germany and France. In its home market, Computacenter delivered a GII increase in the UK of 24.3%, taking it just over the £1bn mark, while Services grew 4.0% to £229m. Professional Services were up by 29% in H1, but Managed Services declined by 7.8% during the half.

North America saw the firm deliver a GII increase of 57.9%, with Technology Sourcing gross invoiced income climbing by 60.0%, with Services revenue improving by 14.5%.

Western Europe – which includes operations in France, Belgium, Netherlands and Switzerland – was disappointing, with weakness in France dragging total gross invoiced income down to just a 1.1% increase. Softer than expected, public sector business underlined the French performance. There was a similar story in Germany, which also suffered from lower volumes of business, leading to a total GII increase of just 3.2%.

Efforts to continue expanding the customer base paid off, with the channel player adding 14 customers that helped generate more than £1m of gross profit annually since the same period last year. That takes the total number of major customers up to 197.

Mike Norris, CEO at Computacenter, pointed out that the half-year numbers had been produced despite ongoing macroeconomic uncertainty: “We executed well during the first half, delivering growth in both Technology Sourcing and Services against a backdrop of significant macroeconomic and political uncertainty.

“Furthermore, we have significantly expanded our base of major customers over the past year, reinforcing our resilience and positioning ourselves for sustainable growth.

“Building on the strong momentum seen during the second half of 2024, North America delivered another record performance, with growth across all areas. We remain excited about both the short and long-term growth opportunity in this market.

“We are also pleased to see the UK return to growth following a renewed focus on our target customers. While public sector activity in Germany has been subdued, we are confident in both the strength of our team and our customer relationships and we anticipate some recovery in public sector activity in Germany in the second half,” he added.

Norris indicated that the firm expected momentum to continue into the second half and support a decent set of full-year numbers: “Looking to the full year, we have a healthy order backlog position and have made a strong start to our third quarter, especially in North America. As a result, we continue to expect growth in adjusted operating profit for the full year.”