Computacenter predicts annual profit up at least 23%

Computacenter predicted annual adjusted pretax profit of at least £180m as it reported a 39.4% increase in first-half profit supported by booming business in the UK during the Covid-19 crisis.

Adjusted pretax profit for the six months to the end of June rose to £74.6m from £53.5m a year earlier as revenue increased 1.5% to £2.46bn. The FTSE 250 company increased its interim dividend by 21.8% to 12.3p a share.

Annual profit will increased by at least 23% to £180m from £146.3m, the company said. Computacenter also said it agreed to buy Canada's Pivot Technology for C$105.8m (£62m) to expand in the US and Canada.

The company said big reductions in spending by industrial customers was offset by new business from the government and the financial services sector. Computacenter said cost cuts related to Covid-19 and fatter services and technology sourcing margins contributed to increased profit.

UK adjusted operating profit almost doubled to £45.9m from £23.5m a year earlier as customers spent to keep their businesses running with employees working from home during the Covid-19 crisis. Profit in Germany rose 15.4% to €40.5m but fell 55% in France to €4.3m. US profit more than tripled to $6m from $1.7m.

Mike Norris, Computacenter's chief executive, said: "Our markets have proved resilient as our customers have invested in their infrastructure to support their businesses, they have utilised the skills of our people and we have managed our cost base.

"While nothing can be taken for granted, it is the board's view that, based on current business activity levels, our adjusted profit before tax for the year is unlikely to be less than £180 million. We feel it is important to give specific guidance given the broad range of market expectations concerning our likely results."

Norris said he expected Computacenter's customers to keep investing in technology.

Computacenter said it spent £15m on pay for furloughed workers. Including government support the net cost of Covid-19 was about £5m and the company has decided to repay £1.1m to the UK government to cover its claim under the job retention scheme in April.