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Computacenter pays first dividend

Interims up 31%

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Computacenter (CC) is paying its first dividend, to accompany a good set of interims. Europe’s biggest reseller is to dole out 2p per share in its inaugural pay-out. The company says that interim dividends will account in future for a third of the annual pay-out.

According to CC the dividend shows its confidence in the cash generative nature of the business. Also it brings the company into line with what it likes to think of as its peers.

CC produced a big increase in profits and turnover for the six months to June 30,2003, declaring a profit before tax of £32m, up 31.2 per cent on 2002’s £24.4m. Group revenues advanced 28.7% to £1,254.7m (2002: £975m).

Most of the increase in turnover can be attributed to acquisition – GE Compunet, the big German reseller bought in January is now included in the figures. Like for like sales are down 6.5 per cent. This can be attributed to what CC calls a “subdued hardware market” with weak corporate demand and falling prices.

Perversely, hardware margins are up precisely because of the dearth of big corporate and public sector PC refreshes. CC has tapped into stronger demand from SMEs through its CCD hardware distribution arm. The company gets better prices flogging kit to other dealers to sell on to the little guys than it does selling direct to big accounts, it appears.

Like all corporate resellers, CC likes to trumpet its services business. For the first half of the year, CC managed service revenues climbed 12 per cent and the company nabbed two big new clients during this period for this business – Abbey National and HBOS.

CC says it is making good progress in integrating its new German business, but expresses disappointment with France, where it is a major player. CC France made an operating loss of £1.7m in H1.

The company says that the cost base remains too high, reflecting the difficulty of integrating its GECITS France acquisition into the group. And it is not happy with the level of utilisation of technical staff. This means job cuts, we anticipate. However, this being France, CC must tread more carefully and more slowly than it is able to do in its home country.

CC’s financial statement is here. ®

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