Computacenter: Win 7 upgrade cycle finally blows itself out

Strengthening pound knocks Q4 off course

Computacenter closed off 2015 on a bit of a low as turnover slipped due to the strengthening Pound versus the Euro and comparatively lighter customer spending on classic tech products in Blighty.

Unaudited calendar Q4 revenues for the group - HQ’d in London but with major operations in Germany and France - fell five per cent as reported or grew one per cent if forex was excluded.

In the UK, total revenues dipped five per cent on the back of an eight per cent fall in supply chain sales (hardware/ software) that was partially offset by a two per cent rise in services.

Mike Norris, chief exec at Computacenter, said growth in the UK hub was “more modest” following bumper years in calendar years ’12, ’13 and ’14.

“We saw a slowdown in our workstation business as Windows 7 replacements ended, but there was a pick up in the data centre,” he told us.

On the services front, Computacenter warned in October it was bidding on a bunch of new contracts that would materially determine whether the UK operation was to “maintain” the “impressive” run of fortune locally.

Norris told us “we had some success [with our bids] but not as much as I’d have liked.” He pointed to numerous wins in the year, including the Post Office, Royal Mail and the Foreign and Commonwealth Office.

Revenue in Germany during the final quarter of the year was down one per cent in total, as reported, and France dropped 14 per cent - both of these results indicate businesses that are making some recovery.

The numbers exclude the previous contribution from recycling arm RDC, which was sold to distributor Arrow ECS in March for a whopping £56m.

For the year, services-based reseller Computacenter turnover was flat compared to 2014. This is better than City analysts expected - they forecasted a one per cent decline to £3.1bn.

Product sales in the UK for the year were flat, services were up eight per cent and in total grew three per cent. In Germany, overall revenue grew three per cent and in France fell 16 per cent.

Pre-tax is to be in line with analysts consensus estimates of £86.1m, but in line with management’s forecasts when it warned of the strengthening Pound in relation to Europe’s single currency - for the year, forex conversions sucked £3m out of the profits.

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