Computacenter posts strong H1 2010 financials

Corporate giant confident for H2 with infrastructure and services on the up, despite looming public sector spending cuts

Mike Norris: [Cuts] will not result in any significant impact at Group level

Bullish Computacenter has brushed off fears of public sector spending cuts after posting a 75 per cent increase in H1 pre-tax profit.

An upswing in infrastructure refresh and a strong contract pipeline has helped the infrastructure and services giant to hit group revenue of £1.29bn for the first six months of FY 2010, up 5.4 per cent on the £1.22bn posted in 2009.

Profit, when adjusted for exceptional items and amortisation of acquired intangibles, was still up 16.6 per cent to £21.3m (£18.2m in 2009).

Mike Norris, chief executive of Computacenter, said: “Computacenter made good progress in the first six months of 2010. The improvement in profitability in the period was largely driven by a strong rebound in infrastructure spend, together with steady growth in services, as well as our continued focus on cost control.

“We are confident that we are on track to meet our expectations for the year as a whole and looking further ahead, our plans to increase the services mix, allied with our strong balance sheet, give us encouragement for further growth in the future.”

Breaking into regions, Computacenter’s UK business saw adjusted operating profit grow 43.7 per cent to £18.1m, compared to £12.6m in the first half of 2009. UK revenue increased 12.7 per cent to £651.9m, with an eight per cent growth in services.

Germany saw operating profit reduce by 46.7 per cent in local currency, due to a weaker start for services in the country, and France saw revenue increase 8.7 per cent to £164.3m, compared to £151.1m in 2009. The Benelux arm of the company recorded an adjusted operating profit of £280,000, compared to a loss of £166,000 in 2009. Revenue in the region increased by 35.6 per cent.

Looking forward, Norris said the firm is confident about further progress in its contractual services business.

“While we anticipate that UK public sector capital expenditure is likely to be curbed, we believe this will not result in any significant impact at a Group level,” he said. “There is also the potential that the VAT increase early in 2011 could stimulate increased spend activity towards the end of this year."