Computacenter turns in strong interims

Computacenter is warning of tough times ahead, despite turning in strong interim figures last week. The company also said it has decided to close its specialist iGroup e-consultancy business.

For the six months ended 30 June, Computacenter reported turnover of £1.2bn, up 27 per cent on last year's £926.7m. Profit before tax was £34m, up 61 per cent year on year. Losses associated with the closure of iGroup were £3.4m.

Computacenter will retain the application service provider division of iGroup, which will be merged back into the main company.

Chief executive Mike Norris said he was pleased with the results, although the company had noticed a drop in second-quarter trading.

"The first signs of a significant slowdown became evident in April, as the weaker demand pattern prevalent in the US started to appear in Europe," he explained.

Norris cited poor sales of Unix systems caused by a downturn in ebusiness investment and a slowdown in corporate spending, noticeably in telecoms and investment banking.

Ron Sandler, chairman of Computacenter, agreed with Norris's interpretation. "Although encouraging, the results conceal a deterioration in trading conditions as the first half progressed," he said.

The company maintained that it is difficult to predict how the market will react for the rest of the year but, with cash reserves in excess of £100m, it feels its position remains strong.

Antony Miller, an analyst at Ovum Holway, said: "In the current environment Computacenter has done pretty well. Its cash reserves stand it in good stead. This is important because I think the entire IT market will be in the doldrums until the second half of 2002."