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Digital transformation should drive growth for Computacenter

The channel player has issues its full year results for the last fiscal year and has talked up the prospects for 2017

Computacenter's shareholders will have found the Group's performance in 2016 far from a surprise with all the signs throughout the fiscal year pointing to challlenging conditions.

A 6.3% improvement in revenue to £3.25bn was accompanied with a 0.6% decline in pre-tax profits to £86.4m. The services business was up by 7% to £2.2bn and the services side of operations improved by 4.8%, delivering £1.04bn.

Close to home the performance of the UK services business continued to be weak but investors had been prepared for that in the trading statements throughout the year.

The firm had issued a trading statement last month that highlighted a strong pipeline of managed service opportunities as something that would make 2017 a stronger period.

Mike Norris, chief executive of Computacenter, restated that there were signs of growth in 2017.

"It was a year of mixed fortune with the UK business profitability reducing materially but the overall group performance showing resilience due to the strength in Germany and the turnaround in France," he said.

"The group should have a year of progress in 2017, with a rebalancing of profits between the first and second halves of the year towards the historical pattern," he added.

The prospects for the UK business are also expected to improve with professional services and supply chain both likely to deliver modest imoprovements.

"We expect the UK to see modest improvements due to Professional Services and Supply Chain helping the overall performance," stated Norris.

The firm will be happy if the performance of the German side of the business, which was the strongest in 2016, continues. There are also signs that with the French operation also enjoying a surge of interest in managed services that too can deliver more growth.

"For the French business we would be happy to repeat the same bottom line, with some deterioration in our Supply Chain compensated by improvement in Services revenue," Norris said.

The firm's CEO also outlined the current market landscape, which is marked by customer digital transformation projects.

"New technologies and the drive to digitalisation within our core customer base is driving our customers to invest capital in new projects which is unlikely to abate, however, this is coupled with a resolute desire to reduce run rate operating costs," he added "As a business we have to step up to this challenge and improve our competitive position by focusing on productivity gains and automation."

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