Computacenter H1 profits to drop; £200m share buyback announced

Computacenter said on Friday that it was expecting to report a drop in first-half profit due to the delay of the fulfilment of some orders in North America, as it announced a £200m share buyback programme.

In an update for the half year to 30 June, the company hailed a "solid" underlying performance in Germany and North America. In the UK, however, demand for hardware has been weaker than expected, it said, with customers exercising greater caution and purchasing decisions taking longer to conclude.

As previously guided and given "exceptionally strong" comparatives, H1 2024 is lower than the prior year equivalent and Computacenter now expects adjusted pre-tax profit to fall to around £87m from £121.8m. This includes around £2m of negative currency translation.

Computacenter said the decline was due to the timing of fulfilment of certain large orders in North America which have now moved into the second half, as well as the phasing of its strategic initiatives investments. The company said it has spent an additional £6m versus the same period in 2023, with its expectation for full-year investment unchanged at £28m to £30m.

"Looking to the full year, we expect stronger momentum in the second half underpinned by the size of our committed product order backlog and wider pipeline of opportunities," it said.

"While we are mindful of the backdrop of continuing geopolitical and macro uncertainty across our markets we continue to expect to make progress in FY 2024 as a whole at constant currency. At current exchange rates we expect a negative c.£7m translation impact on adjusted profit before tax in the full year."

The company also said on Friday that it was planning to return up to £200m to shareholders via a share buyback programme.