Shares in Computacenter (CCC) climbed by more than a tenth on Friday, as the IT software and services provider announced significant revenue and pre-tax profit growth in the first half. Although sterling's weakness helped, constant-currency revenue growth was still strong at 9 per cent. Management also cited the favourable comparison with a weaker first half in 2016.
A net cash outflow from operating activities of £1.1m in the prior comparable period was turned into a £11.4m inflow. The resultant boost to the cash position allowed management to promise an additional shareholder return of about £100m in the fourth quarter, meaning that the total payout to shareholders since Computacenter’s 1998 IPO will be £648m.
Regionally, UK sales improved within the supply chain and professional services divisions, although margins suffered at the former. Meanwhile, management pointed to Germany’s standout performance, driven by the supply chain business’s growth of 18 per cent on a constant-currency basis to €598m (£556m). While margins in the services division there were impacted by some underperforming contracts, management is confident that profitability can be improved. A return to a statutory pre-tax profit in France was also encouraging.
Analysts at Investec forecast pre-tax profit of £99.3m and EPS of 62p for FY2017, up from £86 and 53.6p in 2016.
| COMPUTACENTER (CCC) | ||||
| ORD PRICE: | 1,012p | MARKET VALUE: | £1.24bn | |
| TOUCH: | 1,010-1,014p | 12-MONTH HIGH: | 1,094p | LOW: 647p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 365p | NET CASH: | £137m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.48 | 23.6 | 13.3 | 7.20 |
| 2017 | 1.70 | 47.5 | 28.5 | 7.40 |
| % change | +15 | +102 | +114 | +3 |
| Ex-div: | 14 Sep | |||
| Payment: | 13 Oct |
