Computacenter’s UK business saw a 38.9% fall in operating profit in the first half of its financial year.
The firm’s UK operations, which have historically been the backbone of revenues, were hit as large customers delayed procurement decisions in the lead up to the referendum.
As a result, there was a 7.3% year over year decline in services revenue, which stood at £244m and a 4% decline in supply chain revenue (£408m).
Overall, UK turnover fell by 5.2% year over year to £653m and adjusted operating profits dropped by a dramatic 39% to £14m.
Fortunately, strong performance in Germany offset declines in the UK business.
Service revenue grew 7.4% to €273mand supply chain revenue also grew, by 6.2% to €507m.
France also finally began to show signs that it was ready to crawl back to profitability.
While H1 revenue fell 4.4% in constant currency to €247.8m, the French biz saw adjusted operating profit of €1.2m, compared to a €4.1m loss in H1 2015.
“The first half of 2016 finished slightly better than we had anticipated at the time of our Q1 Trading Update in April 2016, mainly due to the better performance of Computacenter in France,” said Mike Norris, CEO. “Despite the challenging market conditions in the UK referred to in our Q1 2016 Trading Update, as well as planned investments, the Board expects the full year to show modest progress in our adjusted profit before tax1, as compared to 2015 after allowing for the £3 million benefit from the one-off gain realised in the comparative period.”
Greg Lock, chairman, addressed the Brexit-shaped elephant in the interim results.
“The question many of you will be asking which is 'what does [Brexit] mean for Computacenter?” Lock wrote. “Simply put, we are changing very little in what we do and expect for our business. We are represented in our core countries of the UK, Germany, France, Belgium and Switzerland by our own people, and we will continue to support our customers in their countries and develop our business there.”