Computacenter sees revenue and profit rise but warns of further supply challenges

UK revenue and adjusted operating profit grew 9.4 per cent and 12.6 per cent respectively for H1 2021

The UK's biggest IT reseller Computacenter has bolstered its revenues by 29 per cent for the first half of 2021 compared with the same period last year as CEO Mike Norris claimed that COVID-19 is now having "very little impact" on the business.

Revenue stood at £3.18bn for H1 2021 compared with £2.46bn for the first half of last year, with Technology Sourcing revenue up 32.4 per cent and Services revenue up 18.8 per cent. Its adjusted profit before tax also grew 59 per cent to hit £118.9m.

But, while Norris praised the company for adapting during the pandemic, he warned that supply issues are posing significant challenges and expects shortages to continue into 2022.

"The vast majority of our customers have returned to business as normal and, other than the reduction to our cost base due to the inability to travel and a continued improvement in the utilisation of our technical resources, COVID-19 is now having very little impact on our business," Norris said.

"However, the ongoing supply shortages in the industry has risen to the top of our challenges. The effects on our business are difficult to fully quantify.

"While there has been, and will continue to be, pressure on our revenues, our position in the market as one of the larger players in most of the geographies in which we operate has enabled us to gain market share."

The boost in revenue was helped by the acquisitions made by Computacenter since the start of last year, with revenue growth excluding acquired companies standing at nine per cent in constant currency. Meanwhile, diluted earnings per share grew 56.1 per cent from H1 2020 to reach 70.7p.

In the UK, revenue and adjusted operating profit grew 9.4 per cent and 12.6 per cent respectively, helped by "strong growth" in Technology Services sales and "encouraging growth" among Professional Services - with Computacenter claiming that it has seen customers recommence previously delayed projects while also beginning "new transformation programmes".

Its Germany division also saw sales jump by 10.5 per cent on a constant currency basis, but in France the company made an overall adjusted operating loss of €2.3 million which it put down to lower than expected orders and the loss of its biggest managed services contract.

In North America, the business saw strong organic revenue growth of 18.1 per cent, increasing to 164.7 per cent including the acquisition of Pivot, both on a constant currency basis.

Norris said the business is "well set" for a 17th year of uninterrupted earnings per share growth despite the second half of 2021 presenting "a more difficult comparison" than that of the first half.

In a recent unscheduled update, Computacenter said trading has been "robust" in July and August after less than half of analysts covering the reseller upgraded their forecasts despite a July update from the company which claimed it was "highly likely" to continue its growth streak.