Computacenter hits £10bn GII in FY23 results

Reseller reports strong revenue and profit, driven by technology sourcing, hints at AI as a future influence

Computacenter today reported a set of encouraging results for FY 2023, citing gross invoiced income (GII) over £10bn, up 11.4 per cent year-on-year, as well as a 10.2 per cent spike in gross profit and adjusted EPS.

The increases, it said, were driven by progress in technology sourcing and services.

Gross profit was up 10.2 per cent, while profit before tax was up 5.4 per cent, reflecting higher levels of strategic investment, according to the Hatfield-HQ company.

The VAR also cited improved cash generation throughout the year, largely due to stock levels returning to normal post-supply chain crisis.

"We delivered our nineteenth consecutive year of growth in adjusted earnings per share, outperforming our markets in 2023, as our large customers continued to invest heavily in new technology," said Computacenter CEO Mike Norris (pictured).

"We managed an uncertain macroeconomic backdrop and inflationary pressures effectively, reduced our inventory significantly, resulting in a record net cash position.

"As planned, we stepped up our investment in strategic initiatives to underpin our competitiveness and future growth.

"Overall we expect 2024 to be another year of progress with growth weighted to the second half, while continuing to invest for future growth.

"Looking further ahead, the combination of the strength of our integrated technology sourcing and services model and our geographic diversity, gives us continued confidence in our long-term growth prospects."

Technology sourcing and services progress drive 2023 results

Technology sourcing GII was up of 13.1 per cent year-on-year in constant currency, driven by large enterprises and Computacenter's growing market share, the UK reseller and services giant said.

Workspace technology demand remains subdued following the pandemic, but the reseller said it expects this to increase in 2024 and cited AI as a predicted driver of technology refreshes.

Meanwhile, revenue from services grew a more modest 3.1 per cent, but gross margin performance improved across the year.

"Notable features of 2023 have been the ongoing growth of our share with some existing large customers, in addition to acquiring some strategically significant new customers, with whom we expect to grow in the coming years," Norris said, referencing contracts won towards the end of the year, which the group expects will contribute to its bottom line from 2024 onwards.

In 2023 alone, the group grew managed services revenue by 2.5 per cent and by 1.3 per cent in constant currency. It cited cost of living adjustment clauses in managed services contracts which allow the group to increase rate card prices and recover cost increases, which drove the improved margin performance.

Supply chain crisis in the rear view, stock levels return to normal

Similarly to some competitors, Computacenter cited normalisation in customer ordering and a reduction in backlogs as one of the reasons behind its improved cash position.

"Industry supply chains and customer ordering behaviours have returned to pre-Covid normalised levels, with customers no longer placing long lead-time orders due to the improved availability of product," said Norris.

"Backlogs for most of our geographies have therefore decreased and as a consequence we responded by managing down our inventory position very effectively, which has helped drive very strong cash generation."

International markets continue to add stability

Germany, which the reseller singled out as a bright spot in its Q3 results, once again provided a stabilising influence.

Computacenter singled the market out as a main driver behind its 3.1 per cent services gains, as well as its 5.7 per cent growth (in constant currency) in professional services.

This, it said, was despite a decline in the UK.

Despite an encouraging Q3 uptick in services in North America, overall services revenue in the region was down slightly year on year, by 2.2 per cent.

Overall, however, North American markets contributed 9.2 per cent revenue growth to £2.7bn, primarily driven by technology sourcing.