Computacenter PLC Half Year Pre-Close Update (5485M)
July 17 2014 - 2:00AM
UK Regulatory
TIDMCCC
RNS Number : 5485M
Computacenter PLC
17 July 2014
Computacenter plc
Trading Update - Overall trading ahead of last year and in line
with expectations
17(th) July 2014
Computacenter plc ("Computacenter" or the "Group"), the
independent provider of IT infrastructure services that enables
users is today providing an update on trading based on preliminary
unaudited financial information for the six months ended 30 June
2014, in advance of the announcement of its interim results on
Friday, 29 August 2014.
Group
Group revenue for the first half increased by 2% on an as
reported basis and by 4% in constant currency. Group Services
revenue increased by 3% on an as reported basis and by 5% in
constant currency. Group Supply Chain revenue increased by 2% on an
as reported basis and by 4% in constant currency.
UK
UK revenue grew by 14% in the first half of the year with
Services revenue increasing by 8% and Supply Chain revenue
increasing by 18%. We remain pleased with the continued strong
performance in the UK business, particularly the Services growth.
Whilst the Supply Chain revenue growth was not as strong in the
second quarter as in the first, as expected, growth was still 9%.
We have managed to secure a significant renewal of a major customer
contract within our Contractual Services business in the second
quarter and we are pleased to be at the exclusive stage, subject to
contract, on a major new contract. We are also optimistic about our
pipeline for the remainder of the year.
Germany
German revenue fell by 10% in constant currency during the first
half, with a 2% increase in Services revenue and 16% reduction in
Supply Chain revenue. Whilst we are disappointed with the Supply
Chain revenue reduction, a significant percentage of the reduction
relates to one low margin software licence of circa GBP25 million
sold in the second quarter of 2013 and not repeated this year.
More significantly we are beginning to see some progress with
our Services business in Germany. We are starting to deliver some
new contract wins which is likely to increase the growth rate going
forward. We are pleased with our Professional Services sales and
our Services margin continues to improve. Our three onerous
contracts continue to perform in line with the provision previously
made for them.
France
French revenue increased by 14% in constant currency in the
first half of the year, with Services revenue increasing by 3% and
Supply Chain revenue increasing by 17%. Whilst this Supply Chain
revenue growth is flattered due to an extremely quiet June 2013, as
we migrated to our Group ERP system, it is testament to the
delivery of an improved customer experience and the fact that our
systems issues in France are now behind us. However, gross margins
have been challenging, particularly in Services.
We are uncompetitive in France and in order to improve long term
profitability, we need to address our cost base. We expect to incur
an exceptional restructuring charge of circa GBP9 million, which is
at the top of the range previously announced in our April 2014
Interim Management Statement.
Financial Position
Group net funds excluding customer specific finance (CSF)
increased by slightly over GBP30 million from GBP39 million to
approximately GBP69 million.
The 30 June 2013 figure of GBP39 million provided above excludes
the effect of the GBP75 million of cash returned to shareholders
during 2013, GBP44 million of which was returned in July 2013, in
order to show a like-for-like comparison against the cash position
as at 30 June 2014.
Outlook
For the first half of 2014 Computacenter will show progress over
the same period for last year. This has been delivered by a strong
performance in the UK held back somewhat by the performance in
France and Germany much of which was as expected.
We are confident that the momentum that we have in the UK will
continue for the foreseeable future due to our P&L investment
in organic growth and a strong pipeline. Whilst we have been
somewhat surprised and disappointed by our Supply Chain performance
in Germany so far this year, we are starting to see some real
improvement in our Services prospects which is strategically more
important.
New management is now in place in our French business and we
have rolled out the Group Operating Model but work needs to be done
to create a profitable and sustainable business.
We remain on track with the Board's expectations for 2014 and
confident about the growth prospects for the long-term.
Enquiries:
Computacenter plc
Mike Norris, Chief Executive: 01707 631601
Tony Conophy, Finance Director: 01707 631515
Tulchan Communications
James Macey White 020 7353 4200
Christian Cowley
Conference call
There will be a conference call for analysts and investors this
morning at 9.00am.
Appendix
Revenue growth summary by segment for Q2 2014 vs Q2 2013 and H1
2014 vs H1 2013
Change vs 2013 Q2 Change Q2 Change H1 Change H1 Change
As Reported Constant As Reported Constant
Currency Currency
---------------------- ------------- ---------- ------------- ----------
Supply Chain Revenue
UK 9% 9% 18% 18%
Germany -27% -25% -18% -16%
France 17% 21% 13% 17%
Group -5% -3% 2% 4%
---------------------- ------------- ---------- ------------- ----------
Services Revenue
UK 9% 9% 8% 8%
Germany -2% 1% -2% 2%
France 9% 12% 0% 3%
Group 4% 6% 3% 5%
---------------------- ------------- ---------- ------------- ----------
Total Revenue
UK 9% 9% 14% 14%
Germany -19% -16% -13% -10%
France 16% 20% 11% 14%
Group -2% 0% 2% 4%
---------------------- ------------- ---------- ------------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
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