Computacenter turns the corner
Turnover down but profits up
Computacenter insisted it is back on the straight and narrow yesterday following a tumultuous 2005.
Interim results for the six months ended 30 June 2006 showed a dip in revenues - down to £1.11bn from £1.15bn in 2005 - but an increase in before tax profits which were up from £8.2m for the first six months of 2005 to £14.5m this year.
The reseller and services giant has suffered falling margins, increasing moves to commodity products and problems with its European business - especially France.
Germany has now returned to profit and performance in France is improving although there is still pressure on margins.
Last year it announced a series of profit warnings and faced the distraction of a proposed management buyout that never came off.
Ron Sandler, chairman of Computacenter, explained that changes were long-term in nature but there is confidence they are taking the right path. Sandler said that enterprise products - like servers and services - are growing best at Computacenter compared to sales of notebooks, desktops and peripherals. Overall PCs and peripherals make up 33 per cent of revenue but there are big differences between countries. In Germany only 13 per cent of revenues come from PC sales, in the UK it is 35 per cent but in France 60 per cent of revenues come from traditional computer sales.
Sandler said: "Computacenter has made considerable efforts in recent years, particularly in the UK, to transform itself in response to some fundamental changes in the way our markets operate. Whilst this process is far from complete, a great deal of progress has been made."
Sandler also welcomed Dr Ian Lewis to the board of directors and said a firm of headhunters is looking for a replacement for departing director Nick Cosh.
Computacenter shares are trading slightly up on the news.
The company will pay a dividend of 2.5p per share in October.®
Read the whole statement here.