Computacenter warns on hardware

Chief executive says services business will rise 15 per cent this year, but hardware revenues are expected to crash

Computacenter’s chief executive Mike Norris has forecast the gulf in fortunes between the hardware and services markets will widen in 2009.

The reseller and service provider’s resilient performance has fuelled a 40 per cent rise in its share price this year that saw it promoted to the FTSE 250 index last week.

Norris predicted that while the reseller’s product business would drop by double digits this year, strong managed services growth will drive its services revenues up by 15 per cent.

Computacenter last week reported a 7.6 per cent rise in turnover to £2.56bn for 2008. Pre-tax profits dropped by six per cent to £39.5m.

“These are the toughest conditions for the product business that I have ever seen,” Norris said. “But our services business is pretty robust and, if anything, the downturn is ensuring it is growing a bit faster.”

Nick Grossman, corporate business development director at VAR 2e2, agreed that smart resellers are reducing their exposure to hardware.

“We have positioned ourselves to do less and less in product resale,” said Grossman. “It was the first place we saw signs of the recession.”