Computacenter shrugs off economic fears
But dealer's shares follow market down
Computacenter today shrugged off any suggestion that it could be hit by the credit crunch crisis, even as evidence mounted that the contagion is spreading from the financial sector to the High Street.
The City this morning appeared to disagree with Computacenter's stance, with its shares falling by nearly three per cent following a pre-close trading update statement from the computer services firm.
Computacenter said that it expects annual profit for 2007 to modestly outshine market predictions, propped up by brisk business in Germany and improvements in the UK arm of the firm in the second half of last year.
The Hatfield, Hertfordshire-based outfit, which just last month secured a £19m managed IT contract extension with retail giant Marks & Spencer, said that it expects pre-tax profit to be slightly ahead of the £41.2m forecast for the year ended 31 December.
It said that despite the UK IT market being hit by a decline in public spending in the first half of the year, Computacenter saw an upturn in profit in the second half, buoyed by a spike in product sales and contract wins.
The systems giant's finance director Tony Conophy told The Register that Computacenter would be "relatively unimpacted by any short-term squeeze".
More generally, he said: "It's still early days to make predictions about whether or not we [the IT industry] are going to be hit by the credit crunch."
He expects steady growth in the UK and German markets for the year ahead and reckoned that the unprofitable French arm of the biz, which saw overall revenue for the year fall, looked set to improve in 2008.
Conophy said that the firm's core business relied on long-term contracts (typically three to five years), most of which had been agreed in advance of the current economic uncertainty.
But he accepted that there was a chance infrastructure implementation projects could yet be hit by a slump in IT spending.
Computacenter will dish up its preliminary 2007 results on 11 March. ®