Bumper corporate IT spending sparked a near 17 per cent rise in Computacenter's underlying first-half pre-tax profit, to £21.3m.
This long overdue hardware refresh was particularly evident in the UK, where the group's underlying revenues rose 12.7 per cent to £652m in the six months to 30 June, and adjusted operating profits jumped 44 per cent to £18.1m. Product revenues were very strong, up 15 per cent, nearly double the 8.1 per cent rise in services income. The UK business will get a further uplift from a three-year IT support deal with Best Buy UK.
But the German and French operations struggled, the former suffering from poor utilisation that nearly halved operating profits to £3.7m, while the latter faced margin erosion as it bulked up sales teams to drive growth, and posted a £1.2m loss. Computacenter’s main challenge ahead is managing the slowdown in public sector spending, the source of 28 per cent of UK revenues, and 20 and 40 per cent of German and French sales, respectively.
Overall, diluted EPS of 10.3p was over 6 per cent better than Panmure Gordon anticipated, but the broker has left full-year earnings per shares forecasts unchanged at 30p.
COMPUTACENTER (CCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 284p | MARKET VALUE: | £437m | |
| TOUCH: | 283.8-284.3p | 12-MONTH HIGH: | 345p | 231p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 217p* | NET CASH: | £95.6m** | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.2 | 12.0 | 6.4 | 3.0 |
| 2010 | 1.3 | 21.0 | 10.7 | 3.5 |
| % change | +5 | +75 | +67 | +17 |
Ex-div: 15 Sep Payment: 15 Oct *Includes intangible assets of £77.3m, or 50p per share **Excludes £38.5m customer specific financing | ||||
