Computacenter issues profit warning
Low margins to blame
Computacenter has issued a full-year profit warning for 2005, just a month after reporting its 2004 results. The warning sent shares on an 11 per cent, or 33 pence slide early Wednesday morning.
It warned that unless market conditions change, its profits would be "substantially below last year" when it reported profit of £67.3m on revenues of £2.46bn.
The company said group sales were down 10 per cent on last year, blaming a shift towards low margin products for the poor performance. "This has had a material impact on achieved margins in the first quarter," chief executive Mike Norris wrote in a letter to investors.
"We are projecting product revenues for the balance of the year to be broadly similar to last year and margins to be lower for the rest of the year," Norris wrote.
Shares in the company had recovered slightly, gaining five pence by the time of writing. ®