Computacenter’s (CCC) headline figures look weak, but that’s due to £29m in exceptional items, including £16m in trading losses on three "onerous" German contracts, and a £12m non-cash impairment to account for the French segment’s continued decline. Adjust for that and the IT infrastructure provider achieved a slight increase in pre-tax profits, thanks to a robust UK performance and strong strides in Germany.
Adjusted operating profits in the UK and Germany rose 8 and 49 per cent respectively (at constant currencies). The growth was driven by demand for operating-system upgrades in Britain, and by restructuring efforts in Germany. But these gains were offset by its French business, where adjusted operating profit slumped £12m to give a loss of £7m.
"It was a very good year everywhere apart from France," says chief executive Mike Norris. He blames three factors: the scale of the endeavour, failing to collaborate with the French management team and trying to replicate Computacenter’s operating model in France without adapting to the country’s specific needs. His focus is now on rebuilding the unit and trimming costs, as "most of the issues aren’t issues anymore".
Changing its view from hold to buy, broker Panmure Gordon increased its forecast for 2014 adjusted pre-tax profit by 2 per cent to £87m, giving EPS of 46.4p, up from £81m and 44.1p last year.
| COMPUTACENTER (CCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 693p | MARKET VALUE: | £963m | |
| TOUCH: | 690-694p | 12-MONTH HIGH: | 720p | LOW: 409p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 262p* | NET CASH: | £71.4m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 2.50 | 48.4 | 25.7 | 11.0 |
| 2010 | 2.68 | 65.4 | 34.1 | 13.2 |
| 2011 | 2.85 | 72.1 | 41.0 | 15.0 |
| 2012 (restated) | 2.91 | 64.8 | 32.9 | 15.5** |
| 2013 | 3.07 | 50.5 | 23.2 | 17.5 |
| % change | +5 | -22 | -29 | +13 |
Ex-div: 21 May Payment: 20 Jun *Includes intangible assets of £98.9m, or 71p a share **Excludes a special dividend of £75m, or 49p a share | ||||
