Solid Germany trading pushes Computacenter outlook higher

Independent IT infrastructure services provider Computacenter posted a trading update for the first quarter to 31 March on Monday - earlier than the date previously advised due to its performance in the first quarter and an improved outlook for the full year.

The FTSE 250 firm said while “much remained to be done” to complete the year, its board believed that the group's performance for 2017 as a whole would exceed current market expectations due to buoyant market conditions for new investments in technology.

It said those investments were being seen particularly by its German business, backed up by steady progress in France and the UK, as well as favourable currency movements.

Group revenue for the first quarter increased by 16% on an as-reported basis and by 9%t in constant currency.

The board said group services revenue increased by 14% on an as-reported basis and by 7% in constant currency, while group supply chain revenue increased by 17% on an as-reported basis and by 11% in constant currency.

UK revenue reduced by 1% for the first quarter with services revenue increasing by 4% and supply chain revenue decreasing by 4%.

German revenue increased by 23% for the first quarter with services revenue increasing by % and supply chain revenue increasing by 31%, all in constant currency.

In France, Computacenter’s revenue increased by 6% for the first quarter with an increase of 22% in services revenue and 2% in supply chain revenue, all in constant currency.

At the end of the quarter, group net funds were reportedly in line with the board's expectations.

“We are clearly encouraged by the group's performance in the first quarter in all our major geographies but particularly in Germany,” the company’s board said in a statement.

“Our performance in 2016, while reasonable in the year as a whole, was weaker in the first half which does create a less-difficult half-on-half comparison.

“This will mean higher profit growth in the first half of 2017 than the second half and will return Computacenter to a more historical norm in the balance of our profits between the first and second half of the year.”

The company’s customers drive to digitalise their operations was creating “significant” demand, the board said, particularly for its professional services and supply chain businesses.

“This is currently more than compensating for the pressure exerted by customers to reduce long term support costs that has a potential negative effect on our managed services business.

“However, this pressure is felt across the industry and those companies who deal with it best will gain market share.”