Computacenter posts profit increase

Reseller enjoys six per cent profit increase in 2002 preliminary results

The channel received a much-needed boost last week when Computacenter reported a six per cent profit increase in its preliminary results for 2002.

Computacenter also said it will double the dividend it pays to shareholders, in a move that is sure to encourage investors.

The corporate reseller, services and infrastructure provider posted a profit of £54.2m before tax for the 12 months ended 31 December 2002.

This was despite a fall in turnover, which dropped to £1.93bn from £2.09bn in 2001.

Computacenter, much like rival Morse, reported growth in its services business. UK managed services and professional services revenues grew 16 and 13 per cent respectively.

Adam Austin, director of marketing at Computacenter, said the results showed that the firm's strategy and cost controls are working.

According to Austin, services remain a major part of the company s plans as it expands in Europe.

He said the company's recent acquisition of GE CompuNet in Germany gives it a strong position in the three largest European economies.

Austin said Computacenter's decision to retain the German division's name, calling it CC CompuNet, ensures it has strong branding in the market.

Brian Pierce, senior channel analyst at IDC, said managed and professional services are good businesses to be in because of the higher margins.

But he warned of challenges that face service providers. Business is more complicated because many of the big companies in Europe have their own IT resources and are reluctant to outsource, Pierce said.

Computacenter s cash reserves are £83.4m, an increase of £30.1m over the past year. Pierce said the profit and cash enable Computacenter to react quickly to new business opportunities

But Austin said there are no acquisitions on the horizon as Computacenter focuses on its services strategy and bedding in the German acquisition.