Computacenter today posted a rise in pretax profit for the first half of the year and announced that it expects 2015 adjusted profit performance to be ahead of its original expectations.
The IT services company reported pretax profit of £70.7m, a massive jump from £18m a year before
Adjusted revenue dipped slightly to £1.44bn from £1.46bn. The figure excluded revenue from the sale of RDC. Computacenter flogged the IT disposal and asset recovery outfit to Arrow back in February, returning £100m to shareholders.
On an adjusted basis, pretax profit rose to £29.1m, up from £25.6 the year before.
With the Grexit being front and centre for much of the financial period, the FTSE 250-listed company's revenue was stifled by the weak euro. On a constant currency basis, revenue rose 6.5%.
“Despite the significant headwinds created by a weak Euro, the operating performance of the Group remains in line with the Board’s original expectations for 2015,” said Computacenter chief, Mike Norris. “However, the Group has additionally benefited from a number of one-off gains, which will not be repeated in either the second half of the year or during 2016. As a result of the impact of these additional gains, we now anticipate that the Group’s 2015 adjusted profit performance will be slightly ahead of the Board’s original expectations for that period.”
The UK was, once again, the golden goose, with growth of 9.8%. Major wins in 2014, such as the Post Office, began generating revenue this year. The IT Megatron said that growth was set to continue in the UK, albeit, at a slower pace than was seen in H1.
Computacenter expects Germany to be the next region to pick up the baton of growth.
“In Germany we have seen good growth in the opportunities for Managed Services, winning a number of new contracts and in France we have seen improvements in our operations as a result of our Group-wide model being implemented there,” said chairman Greg Lock.
France: Much work to be done
Alas, France remained a sorry state of affairs, with total revenue falling by 7.7% on a constant currency basis to €259.3m and by 17.8% on an as reported basis.
“Services performance in France which was particularly hindered by a lack of volume in Professional Services business,” Computacenter said in its report.
The French segment’s major restructuring, which started back in 2014, seems to be paying off. Adjusted operating loss improved by 40.6% in constant currency to €4.1 million and by 47.4% on an as reported basis.
The Hatfield, UK –based company said that, for the full year, there would be a ‘significant reduction’ in France’s operating loss.
“Whilst this is pleasing, much work remains to be done before the losses can be eradicated completely,” the report said.
When the IT services firm reported its Q1 results, the chief exec commented: "2015 should be a year of progress for Computacenter.”
While there remain a few wrinkles that need ironing out, H1 suggests that progress is indeed being made.