Computacenter ups profit despite sluggish turnover
Europe and HP bring 'em down...
Computacenter managed a small increase in profits for the year ended 31 December 2004 despite not increasing turnover. The firm blamed France, Germany and the re-negotiation of terms with HP, its main trading partner, for the sluggish sales.
The group made revenues of £2.46bn for the year, down slightly on £2.48bn in 2003. But the firm pointed out that core product prices fell 12 to 15 per cent in the period. Profit before tax was up 3.2 per cent to £67.3m. The firm is paying a final dividend of 5.2p per share - giving a total for the year of 7.5p.
The giant reseller was pleased with UK managed services revenue growth of 16.6 per cent for the year, compared to 10.9 per cent in 2003. But Computacenter said the renegotiation of its agreement with HP was likely to cost the firm £10m in profits.
Trading in France was poor - it made an operating loss of £6.2m, up from £2.7m in 2003. Computacenter invested in management changes but hasn't seen the benefits yet. New managers were appointed to run maintenance, finance and logistics and in January 2005 Chris Webb was appointed MD for Computacenter France. Webb previously ran UK sales and delivery.
Germany saw modest growth: turnover was up 3.2 per cent and profits grew 3.1 per cent to £9.0m. Although the firm admitted some disappointment with these figures it said the work has now been done to build the German unit into a strong business.
Computacenter Austria is being sold to S&T Systems Integration & Technology Distribution AG, which becomes Computacenter's partner for central and eastern Europe. The deal should close in March 2005.
Computacenter said demand in the first two months had been slow but it was still too early to say if this would hit full year results.
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