Computacenter H1 2023: 'On course for nineteenth year of earnings per share growth'

Revenue grew 26.8 per cent and gross income by 29.9 per cent in first half of 2023

Reseller giant Computacenter is on course for almost 20 years of uninterrupted full-year adjusted diluted earnings per share growth.

The Hatfield-based group reported 26.8 per cent revenue growth to £3.5bn in its H1 2023.

While gross income climbed 29.9 per cent to £5.1bn for the first six months of 2023.

The LSE-listed company said it continued significant programme of strategic initiative expenditure to underpin its long-term resilience, competitiveness and growth with an additional expected spend of circa £13m in FY23 compared to FY22.

H1 results also showed improvement in cash as inventory levels reduced towards normal levels. Inventory fell by £217.2m since the highpoint in Q3 2022.

The unsettled economic conditions still impacted Computacenter's business in the UK during the first half of 2023.

Overall, gross margins in the region decreased by 139 basis points, with total adjusted gross profit at 18.5 per cent of revenues.

"Businesses and organisations have experienced delays in project implementations and have been deferring critical technology investment decisions, resulting in the market softening as the year has progressed," a statement from Computacenter read.

Services down in UK

Professional services and managed services in the UK also dropped by 9.5 per cent and three per cent respectively.

The reseller and services outfit however also reported an 8.7 per cent growth in gross invoiced income in the UK during the first half of the year.

Within this top-line growth, the product mix has changed significantly from hardware, which decreased, towards software and resold services where, with software in particular, longer-term framework contracts are becoming prevalent.

"Due to the industry returning to normal supply conditions we have seen a significant generation of cash as our inventory has reduced in the first half of 2023," said Mike Norris, CEO of Computacenter.

"We expect this to continue in the second half which will leave Computacenter with a strong balance sheet by the end of the year.

"We are pleased with our progress towards both our short-term financial objectives and our long-term aspirations.

"The investments we are making, predominantly through our profit and loss account to make Computacenter a more secure and competitive organisation, are progressing well and continue at pace."

The mid-point results are in line with the FY22 results Computacenter released earlier this year.

Group revenue hit £6.5bn growing 28.5 per cent, which Norris called "an astonishingly strong finish" to the year.

The Computacenter team was recently strengthened by a high-profile hire.

Former vice president for Central and North Europe channel at Dell, Sarah Shields, begun a "new chapter" as group alliance director at Computacenter earlier this year.