- Public sector business provides welcome support
- A net positive benefit from the pandemic
IT services provider Computacenter (CCC) reported a surprisingly robust set of results against the backdrop of falling demand from industrial customers, with public sector clients taking up the slack. Cash collection, particularly, improved as public sector clients settled bills much faster than industry norms.
The pandemic had some surprising benefits for the company. The need to solve issues remotely and lack of access to some sites meant that Computacenter saved on billable hours for travel and employed fewer contractors over the course of the year. Management reckons that overall, the pandemic – when furlough payments and government grants are taken into account – had a net positive impact on adjusted pre-tax profits of £30m.
Morgan Stanley recently initiated coverage, providing a price target of 2,300p.
Computacenter continues to perform strongly in difficult conditions and, with net cash on balance sheet and an improving outlook, the shares remain a Buy.
Last IC view: Buy, 2,360p, 16 Sep 2020
|ORD PRICE:||2,348p||MARKET VALUE:||£2.67bn|
|TOUCH:||2,344-2,350p||12-MONTH HIGH:||2,594p||LOW: 900p|
|DIVIDEND YIELD:||2.2%||PE RATIO:||17|
|NET ASSET VALUE:||553p||NET CASH:||£51.2m|
|Year to 31 Dec||Turnover (£bn)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £274m, or 241p a share.|