Computacenter hailed a return to form in its services business in a buoyant pre-close trading update this morning.
The corporate reseller and services goliath said it expected adjusted pre-tax profit for the year to 31 December to be at the top end of market expectations.
Following a recent slowdown, services growth “increased materially” in the second half of the year. This enabled services to grow eight per cent in constant currency for the year as a whole, with product revenues growing 15 per cent (excluding the CCD Disposal).
It was a tale of two halves in the UK, with product shining in the first half but services excelling in the second half. Total UK revenue rose by 10 per cent excluding the CCD disposal 15 months ago.
UK product growth fell to four per cent in the second half, compared with nine per cent in the first six months of the year. The London-listed firm attributed this partly to the slowdown in government spend and suggested product growth would have been even lower had it not been for January’s VAT increase.
UK services growth stood at 11 per cent for the year.
“Customers are refreshing, upgrading, improving and investing in their IT infrastructures and we are well placed to meet these needs," said Mike Norris, chief executive of Computacenter.
“The growth of long-term services contract revenue remains fundamental to the long-term success for Computacenter and it is pleasing to note that we have seen approximately an eight per cent increase in the annual services contract base.”
Norris added: “There was significant product revenue decline in 2009, mainly due to the economic environment. However, in 2010 we have seen strong product revenue recovery and we anticipate that product revenue will grow steadily in 2011, subject to the overall economic environment.”
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