Computacenter bottom line down despite UK profit spike

Group pre-tax profits down 10 per cent but firm confident for 2013 as it plans to return £75m to shareholders

Computacenter has put a 40 per cent surge in UK operating profits for 2012 down to a wave of new services contracts in the region, although its bottom line fell at a group level.

For the 12 months to 31 December, statutory group pre-tax profit slumped 10 per cent annually to £64.8m on group sales which crept up by 2.2 per cent to £2.91bn over the same period.

The UK posted an operating profit figure of £52.2m for the whole of 2012, an annual increase of 40 per cent. The IT services and reseller beast branded this growth as excellent and put it down to strong contribution from new services contracts.

The firm claimed that its pipeline for new business in the UK is significant, with growth prospects lined up for 2014 and beyond.

Last year, Computacenter claimed to be experiencing "growing pains" after winning a series of contracts simultaneously, resulting in the need to hire 700 extra staff in the UK to deal with the unexpected growth.

In its most recent financial statement, it said its German services business was adversely affected by the additional resourcing costs associated with new contract wins, but that it saw "early signs of improvement in performance" in the region.

It added that this year, the whole group's financial outcome will hinge on Germany and the speed of its recovery, but expressed confidence that improvements will be seen.

The firm also revealed its plans to return £75m to its shareholders on top of their normal dividends as its net cash balance is in excess of its current needs.

The firm's chief executive Mike Norris said the board is currently exploring options for the most effective ways to return to cash to the company's stakeholders.

Norris (pictured) added that 2013 is set to be a "year of progress" for Computacenter.

"While the Group financial outcome for 2013 will be dependent on the in-year performance of Germany and the speed at which we recover from our problem contracts, which is unpredictable, we are confident that these contracts will improve," he said.

"More importantly, winning, contracting and taking on new contracts successfully is more fundamental to the long-term growth of the business and its strategic development.

"We expect 2013 to be a year of progress for Computacenter."