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Computacenter FY results in line with expectations

IT infrastructure services provider Computacenter says that it's on track to meet forecasts for 2015

Computacenter said it expects to comfortably meet its forecasts for 2015, despite strong currency headwinds.

In a trading update for the year ended 31 December, the IT infrastructure services aficionado said that group revenue for the year was flat on a reported basis or 5% at constant currency.

Services revenue was up 1% reported or 6% at constant currency. Revenue from Supply Chain dropped by 1% or 5% at constant currency.

In the UK, total revenue was up 3% for the year, with Services revenue climbing 8% and Supply Chain remaining flat.

The German division had a stellar year, with revenue growing 14% at constant currency, Services increasing by 7% and Supply Chain rocketing by 17%.

However, it was the beleaguered French business that stole the show. While the division ended the year in the red, it performed well ahead of original expectations, thanks to a strong fourth quarter.

Revenue in constant currency decreased by 6% with Services revenue declining by 10% and Supply Chain revenue down by 6% for the year as a whole.

While that doesn't sound great, in Q3, revenue for the French business fell 14%, or 5% at constant currency, while Services revenue fell by 16% in constant currency and by 25% on an as reported basis.

The firm said that the Services revenue decline in France was due to the loss of a small number of contracts towards the end of 2014, while the drop in Supply Chain revenue was in line with the continuing objective of aligning the French business with the Group strategy.

“We are encouraged by the positive momentum that has built up in our German business, which bodes well for significant growth in 2016,” the company said. “In France we have outperformed our expectations for 2015. However, much still remains to be done to improve this position still further and to make the business sustainable.”

“The prospects for the UK, particularly in Services, are still of growth but more modest this year. The benefit of our portfolio of countries should enable Computacenter to show another year of progress in 2016.”

Kate Hanaghan of analyst firm TechMarketView said that she thought the underlying business remained very solid.

“Computacenter has become rather good at winning the important infrastructure services deals when it matters – for example, the Post Office, Royal Mail Group, the large renewal at AstraZeneca and the framework agreement with Transport for London,” Hanaghan said.

“Computacenter is benefitting from the shift to the tower model in the outsourcing market, which is reducing deal sizes and opening up opportunities for smaller players. The company now ranks at number eight in our top twenty of infrastructure services players with revenue close to £500m.”

Computacenter is expected to release its full results on Friday 11th March 2016.

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