Computacenter revenue rises across the board

Independent provider of IT infrastructure services Computacenter updated the market on its trading on Monday, based on preliminary unaudited financial information for the year to 31 December 2017.

The FTSE 250 company said adjusted pre-tax results for the year were anticipated to be ahead of the board's expectations as outlined in its trading update on 14 November, which had already been upgraded a number of times throughout 2017.

Group revenue for the year increased by £408m, or 12%, in constant currency, and by £548m or 17% on an as reported basis.

Computacenter said group services revenue increased by 7% in constant currency and by 11% on an as reported basis, while group supply chain revenue increased by 14% in constant currency and by 19% on an as reported basis.

UK revenue was up 9% for the year, with services revenue increasing by 6% and supply chain revenue increasing 10%.

The fourth quarter was said to be “particularly strong” with services revenue up 9%, supply chain up 18%, and with an overall revenue growth of 16% the board said it was “the best fourth quarter growth we have seen in the UK for a number of years”.

Germany revenue increased 15% for the year overall, with services revenue up 7% and supply chain revenue rising 19%, all in constant currency.

Revenue from France increased 13% for the year overall with services revenue improving 15% and supply chain revenue ahead 12%, also all in constant currency.

At the end of 2017, Computacenter’s group net funds - which the board said were usually at their highest at the end of the financial year - were £191.2m , an increase on the prior year of £44.6m in constant currency.

“As reported in the company's 2016 annual report and accounts, the group's net funds benefit from extended credit terms with a major supplier and have done so for approximately nine years,” the board explained in its statement.

The estimated benefit of these extended terms to the group's net funds was £54.9m at the end of the year - down from £69.1m a year earlier.

“These extended terms will be returning closer to standard terms during the first half of 2018 resulting in a subsequent reduction in the group's net funds of circa £27.5m,” the board added.

Looking ahead, the company’s directors said 2017 was “clearly” a year of significant progress for the form as customers continued to invest in new IT infrastructure, including digitalisation, to enhance their businesses and deliver improved user and customer experiences.

“While we believe the positive momentum in the market is set to continue, there will be a number of one-off costs and investments within the group in 2018 that will not repeat in 2019, which will hold back the enhancement of profitability in 2018,” the board cautioned.

“While it is still very early in 2018, the board expects the year to be one of stable profitability.”

In line with its announcement on 14 November last year, the company added that on Tuesday it would launch a tender offer to return value of approximately £100m - details of which would be released on Tuesday morning.

“We look forward to publishing our final results for the year ended 31 December on 13 March.”