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UK enterprises are SPENDING again, bellows Computacenter

CEO all smiles after double-digit kit sales hike in Q4

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A double-digit hike in Q4 hardware and software sales to large enterprise customers in Blighty helped Computacenter (CC) end calendar '13 on a high note, despite a more mixed performance across continental Europe.

In a trading update - full results are due in March - the CC Group posted a three per cent revenue gain in constant currency for the year, building on the £2.91bn turned over in 2012 - as group services moved up four per cent and products sales by two per cent.

In the final three months of the year, the group saw services revenues rise one per cent as supply chain sales (for that read products) expanded eight per cent.

Split by country, the UK operation recorded an 18 per cent climb in supply chain sales in the final quarter of the year as services rose five per cent.

For the year, UK turnover was up eight per cent on the back of nine and six per cent growth in supply chain and services sales respectively.

CEO Mike Norris said it secured new services wins in 2013 that will fuel growth here in the second half of this year, adding that the operational issues caused by winning multiple contracts in 2012 were resolved.

"As previously indicated, the particularly strong contribution from successful business taken-ons in 2012 has made contribution growth more challenging than revenue growth, but this is now behind us."

The return to form of the product reselling biz was due to healthy customer relations and "positive market conditions", Norris added.

In Germany, the services-based reseller reported flat product sales for Q4 and a three per cent decline in services due to the "significant reduction in size of one particular customer contract".

In fact it was this country operation that faced the biggest headache in matching services wins with staff to deploy them, which caused CC to issue a profit warning 18 months ago as it was forced to hire 700 new heads to address this.

For the twelve months, CC Germany reported a two per cent rise in total revenues with hardware and software up two per cent and services flat.

"2013 has been a year of stability for us in Germany, with significant improvement in services margin as the year progressed, and a positive overall performance in our supply chain business. We certainly exit 2013 in a much stronger position than we entered it," said Norris.

Across the er…English Channel, the CC folk in France sold five per cent more products in Q4 but services declined six per cent. For the year, turnover in local currency was down seven per cent with a single digit drop in service revenues and eight per cent in supply chain.

The chief exec said the business was improving, "much of this was due to the fact that the majority of issues relating to our group ERP systems deployment in France are not behind us".

Norris said it is carrying out a "detailed evaluation" of other long term services wins across the group, as it standard, and reckons a "positive change" is likely in some estimates that will result in a one-off gain.

By rolling out a group operating model for services - something that is now occurring in France - during calendar '13, CC said it incurred restructuring charges of £4m.

The London-based giant - a bellwether for the health of the enterprise tech sector - ended the update on a positive note.

"The momentum we built over the last three years in the UK should be maintained due to recent services wins, and the German services margin improvement has further to run.

"While we would expect an improvement in our French performance, we will resist the temptation of improving the short term and not fixing it fundamentally to improve the long-term," Norris signed off. ®

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