Computacenter continues to rake it in

Computacenter's bottom line still looks healthy as giant posts 2008 preliminary results

Norris: We expect managed service growth to continue

Corporate reseller Computacenter talked up the success of its managed services business as it posted a growth in profits for 2008.

The London-listed behemoth has seen its share price spike by about 40 per cent this year and continued to impress with its preliminary results for the year to 31 December.

Although pre-tax profits fell six per cent to £39.5m, adjusting for exceptional items and amortisation of acquired intangibles the figure actually rose one per cent to £43.1m.

Group revenues improved 7.6 per cent to £2.56bn.

The VAR’s annual services contract base rose by more than 10 per cent to £498m, and chief executive Mike Norris said its increased focus on services would stand it in good stead for 2009.

"The current economic conditions are undoubtedly affecting the markets in which we operate,” Norris said.

“However we can, and do, help businesses reduce costs and become more competitive, which makes our managed services offerings more compelling, as our recent contract base growth illustrates. We expect this growth to continue at a similar pace throughout the year, though our product revenues are under pressure.”

The UK generates just over half of Computacenter’s revenues and sales from its home country rose 2.5 per cent to £1.39bn.

Adjusted UK operating profit fell 15.6 per cent to £27.9m, which the reseller blamed on a poor start to the year, investment in services and its SME business, and an ERP upgrade.

UK services revenues grew by 4.3 per cent, although Computacenter said it secured a number of large long-term services contracts in the second half of the year which made no contribution to its 2008 results.

Meanwhile, UK product sales grew two per cent, or 5.4 per cent stripping out the decline in revenues at its CCD distribution arm.