Computacenter full year profit up, boosted by disposal

Computacenter posted a rise in full year pre-tax profit as a slip in revenue was offset by a gain from the disposal of its RD Trading recycling subsidiary.

For the year to the end of December, the FTSE 250 IT infrastructure services provider said statutory pre-tax profit increased 66% from the previous year to £126.8m, enhanced by a £42.2m gain on the disposal.

Adjusted pre-tax profit, meanwhile, rose to £86.9 from £81.1m – a touch above consensus estimates of £85.6m – while revenue dipped 0.3% to £3.05bn.

The company said it will pay a second interim dividend of 15p per share, taking the total payout for the year to 21.4p from 19.8p in 2014.

The group said it continued to deliver strong cash generation from its operations in 2015, with net cash flow from operating activities of £93.9m versus £94.4m the year before.

Computacenter said it was encouraged by the momentum in its German business going into 2016 and expects the solid performance in France in 2015 to be repeated.

For the UK, however, it sees a more challenging year, particularly in the first half. The group expects services revenue to decline as the expiry of a large contract at the end of the first quarter of 2015 and the large volume of business take-on last year create a challenging comparison, along with the one-off £3 million gain highlighted in the interim statement last year.

Chief executive Mike Norris said: “We intend to increase the rate of spend on our strategic investments, which will be weighted towards the first half of the year, as we invest in our long term competitive advantage through our income statement.

“While it is too early to make any firm commitments on the year as a whole and there is much work to be done, we expect 2016 to be a year of further progress. However, it is worth making clear that the effects referred to above will impact the phasing of our profit delivery and mean that the first half profit is expected to be below that reported for the same period in 2015.”