Join our community of smart investors

Profits up at Computacenter

Computacenter posted strong growth in the UK and Germany and reduced losses in France
September 4, 2015

Investors were likely chuffed with these results from Computacenter (CCC). Rising demand for the group's IT services and equipment sent sales - excluding the impacts of one-off items and the depressed euro - up 7 per cent. Combined with a smaller loss in the troubled French business, that drove adjusted operating profits up 5 per cent to £30m.

IC TIP: Buy at 756p

Strong trading in the UK and Germany left the group's underlying services and supply chain revenues up 6 and 7 per cent respectively. One standout was the German supply chain business, where brisk trading in networking and data centre equipment drove constant-currency sales up a fifth to €478m (£350m).

Turnover fell at the embattled French operation, but management slashed non-manufacturing overheads by 11 per cent. As a result, the division's adjusted operating loss narrowed by 41 per cent to €4.1m (£3m). Further cost-cutting is on the cards, says Computacenter chief Mike Norris, who plans to shrink the business "from a problem to an irrelevance" over the next 18 months. But he ruled out a full exit, citing the number of international companies headquartered in France.

Broker Investec raised its forecasts and now expects pre-tax profits of £87.8m, giving EPS of 53.2p (2014: £85.9m and 46.8p).

COMPUTACENTER (CCC)
ORD PRICE:756pMARKET VALUE:£ 928m
TOUCH:755.5-756p12-MONTH HIGH:780pLOW: 584p
DIVIDEND YIELD:2.6%PE RATIO:9
NET ASSET VALUE:261p*NET CASH:£44.9m

Half-year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)†
20141.4618.07.46.7
20151.4470.749.66.4
% change-1+292+570-4

Ex-div: 17 Sep

Payment: 16 Oct

*Includes intangible assets of £79m, or 64p a share

†Adjusted for share consolidation in Feb 2015