Computacenter sounds coronavirus caution despite barnstorming results
CEO Norris warns of supply chain disruption and projects being postponed due to virus’ continuing spread
Computacenter CEO Mike Norris voiced his concerns about the impact of COVID-19 on business as the firm celebrated a "landmark" year.
The services giant saw overall revenue grow 16 per cent year on year to £5.02bn, with its Technology Sourcing unit contributing over £3.8bn to that figure.
Despite this success, the company was muted in its celebration, as Norris warned that FY19 has set a "high bar" for its current fiscal year and that it may not see the same level of growth due to the impact of coronavirus.
"It is too early to predict the outcome for the year as a whole and there is still much work to be done, particularly as we have not yet completed our first quarter," he said.
"Our services pipeline is the strongest we have seen for some time in both professional and managed services. While we still believe customers will continue to invest in product, particularly in the areas of security, networking and cloud, it may well be difficult to achieve the same growth rates we have seen in recent years."
He noted that there has been an upswing in demand for laptops as more customers implement remote working policies to contain the spread of the contagion. However, he raised concerns about IT projects coming to a standstill and supply chains being disrupted.
"The current COVID-19 outbreak makes forecasting the future even more challenging," he continued.
"In the short term, we are urgently supporting our customers focused on their business continuity plans, which involves the need for a greater degree of remote working. We have seen a surge in demand for laptops for this purpose. To date, supply constraints from our technology providers have been minimal, although there are some concerns going forward.
"We do, however, have some concerns that in the medium term, customers may postpone significant IT infrastructure projects while the current uncertainty remains.
"In the longer term, we feel more certain, either because when this crisis is behind us, life will return to normal and the fundamental business drivers for IT growth remain or, if there is a long-term reduction in business travel and commuting with a consequent upsurge in remote working, it can only drive the need for technology even further."
Norris added that Computacenter's focus at the moment is to ensure the business continuity of its customers during this crisis and ensure the health of its stakeholders and society.
The company's 2018 acquisitions bore fruit in FY19, contributing £586.6m to the company's overall £700m revenue growth. Its US purchase FusionStorm also performed "significantly better" in the latter half of the year as Computacenter "learned how to drive the business", according to chairman Peter Ryan.
The company's French and German operations both reported strong revenue growth, particularly in Technology Sourcing which Computacenter attributed to "strong growth" in the public sector in both countries.
The only blip in the results was UK turnover, which fell nearly two per cent year on year to £1.5bn. Computacenter said that this comparative decline was due to two very large one-off deals in FY18. The UK also reported "modestly" lower revenues across its Managed Services, Professional Services and Technology Sourcing units.
Ryan stated that the company is experienced in navigating troubled waters and is confident that it will do so again in the current uncertain climate.
"For nearly 40 years, Computacenter has endured and adapted. Mike continues to lead the management team along with Tony [Canophy, CFO], and they remain true survivors of the industry. They, the board and the rest of the senior management team, still feel the energy and excitement of the opportunities ahead," he said.
"This has been a landmark year for Computacenter, both in terms of the results we are announcing and our progress with strengthening the company."