Computacenter backs FY expectations as interim profits drop

IT services firm Computacenter backed its expectations for the year on Friday as it reported a drop in interim profit.

In the six months to 30 June, pre-tax profit fell 6.4% to £107.8m, while revenues rose 16.6% to £2.8m.

Computacenter noted that historically, revenues have been higher in the second half than in the first six months of the year, mainly due to customer buying behaviour, and leading to a more pronounced effect on operating profit.

However, the impact of Covid-19 and recent supply shortages for IT equipment have "materially altered" customer buying behaviours in 2020 and 2021, it said, including the split of sales volumes between the first and second halves of the year.

"In 2021 an abnormally high percentage of our full-year profits came in the first half of the year, which means we have a more challenging comparison for the first half of 2022 than for the second half," it said.

Chief executive Mike Norris said: "As we have predicted and announced on multiple occasions, profitability for Computacenter was down in the first half of 2022 compared to the same period last year, however, we remain on track to deliver our stated expectations of profit growth for the year as a whole.

"With the exception of networking products where difficulties still remain, supply chain challenges have eased materially in the last three months. However, our customers have become extremely sensitive about supply chain shortages, and as such require us to hold more inventory, impacting our balance sheet. In almost all cases there is a guaranteed sale on the inventory items. The continuing strength of our balance sheet gives us a significant competitive advantage in being able to support our customers' requirements in this manner. How this will unravel as customers get used to the freeing up of supply remains to be seen."