TIDMCCC
RNS Number : 2966Q
Computacenter PLC
29 August 2014
Computacenter plc
Interim results for the six months ended 30 June 2014
'Computacenter continues to implement its Services-based
strategy'
Computacenter plc ("Computacenter" or the "Group"), the
independent provider of IT infrastructure and services that enables
users, today announces unaudited results for the six month period
ended 30 June 2014.
Financial Highlights
H1 2014 H1 2013 Change (%)
Financial Key Performance Indicators **
Group revenue (GBP million) 1,458.3 1,426.3 2.2
Adjusted* profit before tax
(GBP million) 28.0 26.2 6.8
Adjusted* diluted earnings
per share (pence) 14.5 12.5 16.0
Dividend (pence per share) 5.9 5.2 13.5
Statutory Performance **
Statutory profit/(loss) before
tax (GBP million) 18.0 (4.3) N/A
Exceptional Items (GBP million) 9.1 29.3 (68.9)
Statutory basic earnings/(loss)
per share (pence) 7.4 (5.7) N/A
Statutory diluted earnings/(loss)
per share (pence) 7.4 (5.7) N/A
Cash Position
Underlying Net Funds*** (GBP
million) 54.0 22.2 143.8
Net funds (GBP million) 54.0 65.8 (17.9)
Revenue Performance by Sector
**
Group Services revenue (GBP
million) 488.5 472.7 3.3
Group Supply Chain revenue
(GBP million) 969.8 953.7 1.7
Reconciliation between the Group's Adjusted* and Statutory
Performance in H1 2014
Adjusted* profit before tax (GBP
million) 28.0
Exceptional Item: Estimated costs (9.1) (please refer to note 6
of to the accounts for further
restructuring in French business detail)
(GBP million)
Amortisation of acquired intangibles
(GBP million) (0.9)
Statutory profit before tax (GBP
million) 18.0
Operational Highlights:
-- Group Services revenue increased by 3.3% across the Group on an as reported basis
-- UK business generates revenue and adjusted* operating profit
growth of 14.1% and 24.4% respectively
-- Early signs of progress in Services in Germany, but disappointing Supply Chain performance
-- Trading performance for the three onerous contracts continues in line with expectations
-- Revenue growth across the business in France, but margins remain challenging
-- Charge of GBP9.1 million taken in respect of the
comprehensive restructuring in France to improve
competitiveness
* Adjusted profit before tax and adjusted diluted earnings per
share is stated prior to exceptional items and amortisation of
acquired intangibles. Adjusted operating profit is also stated
after charging interest on customer specific financing.
** Figures provided are on an as reported basis.
*** The H1 2013 'Underlying Net Funds' Position is presented
having been adjusted for the remittance of GBP43.6 million made in
early July 2013 as part of the Return of Value to shareholders of
approximately GBP75 million that took place in 2013.
Mike Norris, Chief Executive of Computacenter plc,
commented:
'We end the first half of 2014 with the Group having made solid
progress against its strategic objectives and financial key
performance indicators. The delivery of 16% growth in adjusted*
diluted earnings per share, Computacenter's primary measure of
financial success, was especially pleasing.
Trading remains in line with the Board's expectations, and the
significant incremental organic investment that we continue to make
in our business, in addition to the market opportunities that are
presenting themselves, gives us confidence for the rest of the year
and beyond.'
Enquiries:
Computacenter plc:
Mike Norris, Chief Executive 01707 631601
Tony Conophy, Finance
Director 01707 631515
Tulchan Communications:
James Macey White
Christian Cowley 0207 353 4200
Chairman's Statement
The first half of 2014 marked a period of strength in our UK
business, consolidation of our position in Germany and the start of
a significant reconstruction in France for Computacenter.
Our UK Managed Services revenues have grown significantly, and
we have won new contracts which bode well for continued growth. We
believe that we continue to increase our market share in Services
as we pursue our strategic objectives. We are pleased with our
product revenue growth in the UK where conditions for business have
continued to improve.
In Germany, having stabilised our performance in 2013 following
our contract challenges in 2011, we expect continuous improvement
in margin and Services wins over the coming years. We do not expect
a dramatic improvement in 2014, but we have put in place all
elements of our Group Operating Model and are confident in our
prospects for 2015 and beyond.
France is a different matter for us. We have announced a 'social
plan' which will reduce our cost and expense base there, installed
new leadership and made progress in the rigorous implementation of
our Group Operating Model, although we do not expect to see the
benefit of these changes in 2014.
We continue to manage our resources prudently. Our cash position
has improved by GBP31.8 million over that seen at the end of the
comparative period in 2013 (net of last year's Return of Value to
shareholders) and we continue to focus on adding value for our
customers by enabling their IT users, improving their productivity
and ultimately saving them money.
We are on track to meet the Board's expectations for 2014, and
we continue to invest to grow the business in future years. We will
need relentless focus on execution. This is at the heart of the way
the Company leadership operates and it must be. Competition is
tough and our customers demand a lot from us - nothing can or
should be taken for granted. I thank all of our employees whose
continued passion and loyalty is marked. Above all, I thank our
customers for their business and their confidence in us.
Greg Lock
28 August 2014
Strategic Progress
Computacenter has continued to focus on its four key Group
strategic objectives and has made good progress against these
during the first half of 2014.
1. To lead with and grow our Services business
What we have achieved so far in 2014
-- Relevant Group Strategic Key Performance Indicator: Our Group
total Services contract base finished the period at GBP638.8
million, an increase of 1.3% in constant currency from the Group
total Services contract base at the end of 2013.
-- Continued implementation of our Services-led strategy, with a
5.3% growth in total Services revenue in constant currency versus
the same period last year.
-- This was underpinned by a very strong performance by the UK
business, which saw total Services revenue increase by 8.2% over
the period. We have been encouraged by the number of contracts that
have been renewed or widened in scope, and additionally our healthy
win rate.
-- Following the implementation of our Group Operating Model,
the German Services business is beginning to show signs of progress
reflected by the win of its largest Managed Services contract since
December 2011.
-- A number of important steps have been taken to refocus the
French business, but completing its transition to become
Services-led is a medium-term objective. We have commenced the
on-boarding of a large French customer for Managed Services in
France and internationally. Once fully operational, this contract
will be the largest Managed Services contract in the Group.
Next Steps
-- We seek to continue the significant Services revenue and
profitability growth seen in the UK during the period. Given the
strength of our pipeline, this should be achievable. There are a
small number of sizeable Services bids in which we are involved,
for which we will know the outcome during the second half of
2014.
-- In Germany we will continue to pursue Managed Services growth
as a priority, as we aim to drive the utilisation of our central
Services engines. Again the pipeline is strong and therefore our
focus will be on identifying and executing successfully the most
appropriate bid opportunities.
-- Within our French business, we will take continued action to
facilitate, and where appropriate, accelerate its transition to
become Services-led.
2. To improve our Services productivity and enhance our competitiveness
What we have achieved so far in 2014
-- Relevant Group Strategic key performance indicator: Revenue
generated per Services head has grown from GBP84,000 per head at
the end of H1 2013, to GBP86,000 per head at the end of reporting
period which represents an increase of 2.4% in constant
currency.
-- We split Services productivity and competitiveness into two
distinct areas. Firstly, the productivity of customer-facing staff,
measured by way of gross margin. Secondly, we measure the
utilisation rate of our industrialised Services engines, such as
for our Service Desks, Remote Management capability and Project
Management capability.
-- Gross margin levels remain strong in the UK, and there has
been a fifty basis points improvement in Germany compared to the
same period in 2013. This has been helped by the fact that central
Services engines utilisation rates have also been good in both
countries, driven by strong performances in Professional Services
which we expect to continue for the remainder of the year.
-- Our French business lost a small number of important Services
contracts in 2013, which have not been replaced. Therefore, whilst
customer gross margins in the business remain reasonable, it has
struggled with extremely low levels of utilisation of our central
Services engines, which have in turn materially and negatively
impacted overall Services margins. This has made it difficult for
the French business to compete in its current structure.
Next steps
-- Over the second half over the year, we expect the UK business
Services margin percentage to remain broadly unchanged against that
achieved for H2 2013.To the extent that there is any scope for
improvement, we do not expect this to be material.
-- Our German Services margin still has scope for improvement,
within customer-facing gross margins and the utilisation of our
central Services engines. We expect to see some improvement in
German business Service margin percentage during the second half of
the year against the comparative period in 2013.
-- Our issues in France are again more challenging in this area,
given that they are more fundamentally related to its underlying
structure. We will continue to take action to increase our
capability to deliver our suite of Services offerings into
appropriate large and medium-sized customers, and will redefine the
scale of our resource. These are medium-term objectives, but
fundamental to delivering a consistently profitable and sustainable
business - an aim which Group Management remains wholly committed
to.
3. To retain and maximise the relationship with our customers over the long-term
What we have achieved so far in 2014
-- Relevant Group Strategic key performance indicator: The
number of customer accounts which generate gross margin
contribution of over GBP1 million across the Group on an annualised
basis has increased from 81 at the end of H2 2013, to 92 as at 30
June 2014.
-- The Group remains totally focused on providing its Service
offerings to large and medium-sized enterprises and corporate
entities which are headquartered in Western Europe, supporting
their user's needs in local markets, and globally where
appropriate.
-- We have made particularly significant progress on this
objective in the UK, where the recent performance of our Services
business has enabled it to build trust and a significant
track-record of high-quality Service deliverables over the
long-term. In the short-term, we aspire to build this track-record
in our German Services business. Our French Services business will
clearly take longer to do so.
Next steps
-- The strength of pipeline in the UK and Germany provides us
with a significant opportunity to improve the number of Group
customers contributing more than GBP1 million of gross margin on an
annualised basis. Whilst the recent strength of Sterling in 2014 is
acting as a headwind to this achievement in our European operating
geographies, we expect overall that this number will, in 2014, have
grown at its fastest rate for a number of years.
-- We will continue to increase the volume of our customers'
users that we serve globally through the development of our
international Services business and the use of our established
partner network. Additionally, in accordance with our Group
business model, we will ensure that our sales processes are refined
further to make our customers aware of the value that the full
range of our Services offerings can deliver for them.
4. To innovate our Services offerings to build future growth opportunities
What we have achieved so far in 2014
-- Relevant Group Strategic key performance indicator: Following
further analysis of our strategic objectives, the key performance
indicator for this objective has been changed from 'The share of
our overall Services revenue against the Group's total revenue' to
'The Group's total Services revenue'. The Group's total Services
revenue has increased by 5.3% in constant currency to GBP488.5
million (H1 2013: GBP464.1 million).
-- During the period, we have embarked on one of the most
comprehensive investment phases of our Services-led organic growth
strategy, which has principally taken place in three areas.
Firstly, we are developing our Services tools, systems and
processes for our Next Generation Service Desk (NGSD) offering, the
innovation which we believe will materially enhance the user
experience for our customers' users and deliver significant
competitive advantage for our business. Secondly, we are growing
our international footprint, transferring a number of our key
clients to our new service desk location in Hungary and
establishing a new service desk location in Montpellier, France.
Thirdly, we are enhancing our capability to deliver a service
offering which fulfils our customers' ever-increasing requirement
for its workforce to be mobile, but does not detract from the IT
consumer experience regardless of location.
Next steps
-- The success we have experienced in transitioning the
provision of Services for a number of our key clients to our
newly-established Hungarian operation means that we will search for
further capacity to be utilised in Hungary during the remainder of
the year and into 2015. We also anticipate that a number of
customers will 'go-live' at our new IT Services desk location in
Montpellier, France towards the end of the year and in 2015.
-- We expect to pilot our NGSD and Mobility Solutions internally
during the third quarter of 2014, before doing the same with two
external customers before the end of the year.
-- We will continue to refine our governance processes to ensure
that these keep pace with the development of our operational and
technical capability, and that the Group acts at all times in
accordance with the risk appetite as set by its Board of
Directors.
Group Operating Update
Turnover and Adjusted* Profitability
The first half of 2014 was a period of solid progress for the
Group, in which it continued to pursue its strategy of delivering
organic revenue and profitability growth through targeted
investment in its Services business.
During the period, total Group revenues increased by 2.2% on an
as reported basis to GBP1,458.3 million (H1 2013: GBP1,426.3
million), and by 4.3% in constant currency. Given the Group's
strategy, we were especially encouraged to see an overall increase
in Group Services revenue of 3.3 per cent on an as reported basis
to GBP488.5 million (H1 2013: GBP472.7 million) and 5.3% in
constant currency.
Whilst this performance was principally driven by another very
strong performance from our UK Services business, we are now
beginning to see early signs of progress from our Services business
in Germany. This is starting to deliver some new contract wins,
which are likely to increase its growth rate moving forward. Whilst
French Services revenue also grew by 4.8% during the period in
constant currency, this result is flattered somewhat by the take-on
of one particularly large contract during the period. The French
business remains in the early stages of its transition to become
Services-led, and therefore more able to contribute towards the
achievement of the Group's strategic objectives in the
medium-term.
Group Supply Chain revenues were up by 1.7% on an as reported
basis to GBP969.8 million (H1 2013: GBP953.7 million), and by 3.9%
in constant currency. This was substantially underpinned by the
Supply Chain performance in the UK, which was particularly strong
in the first quarter of the year. The Group's French Supply Chain
business also saw significant revenue growth, which we believe is
testament to an improved customer experience in France. However, it
should also be noted firstly that this performance was flattered by
a comparatively quiet June 2013, during which time the business
migrated across to the Group ERP system, and secondly that the
majority of this revenue growth came from within the lowest
margin-generating areas of our French business.
We were undoubtedly disappointed by our Supply Chain performance
in Germany although, as we have previously announced, a significant
proportion of the reduction that has taken place relates to one low
margin software licence of circa GBP25 million, sold in the second
quarter of 2013 and not repeated this year.
Group profitability was mixed within our operating units, with
significant adjusted* profit before tax growth in the UK being
substantially offset by a reduction in adjusted* profit before tax
within our German business and the performance in France. The
Group's adjusted* profit before tax has increased by 6.8% on an as
reported basis to GBP28.0 million (H1 2013: GBP26.2 million) and by
7.5% in constant currency. The Company's adjusted* diluted earnings
per share also increased by 16.0% to 14.5 pence per share (H1 2013:
12.5 pence). Due to the increased losses in France during the first
half of 2014, this result has been impacted by a higher adjusted
tax rate for the period of 28.7% (H1 2013: 27.8%).
Statutory Performance and Exceptional Items
During the period, the Group took an exceptional item of GBP9.1
million (H1 2013: GBP29.3 million) in relation to estimated costs
of the restructuring exercise that the Group is currently preparing
to undertake within its French business. Therefore, on a statutory
basis, taking account of this provision and the amortisation of
acquired intangibles, the Group made a statutory profit before tax
of GBP18.0 million (H1 2013: statutory loss before tax of GBP4.3
million), which represented an increase of GBP22.3 million on an as
reported basis. As a result, the Company's diluted earnings per
share increased from a loss of 5.7 pence during the first half of
2013 to earnings of 7.4 pence during the first six months of
2014.
As we previously announced on 17 July 2014, our French business
is uncompetitive, and in order to improve the long-term performance
of the business, we need to reduce our cost base. The execution of
a substantial restructuring exercise which aims to address this
issue is currently being prepared. This exercise will enable a
fundamental re-shaping of the business which we hope will give us a
solid foundation for it to provide our core Group Services
offerings to our target customer market.
Our three onerous contracts in Germany have continued to perform
in line with our expectations. Therefore, the provision held at 30
June 2014 for the losses expected to be incurred on those contracts
between 1 July 2014 and the end of their lifetimes remains adequate
and appropriate.
Cash Position
Cash flow generation continued to remain strong throughout the
period and Underlying Net Funds*** increased by GBP31.8 million,
from GBP22.2 million at 30 June 2013 to GBP54.0 million at the
period end. The 30 June 2013 figure of GBP22.2 million provided
above is presented having been adjusted for the remittance of
GBP43.6 million made in early July 2013 as part of the Return of
Value to shareholders of approximately GBP75 million that took
place in 2013, in order to show a like-for-like comparison against
the cash position as at 30 June 2014.
As noted in the 2013 Annual Report and Accounts, working capital
in France increased due to issues arising from the SAP
implementation in June 2013. We have recently seen some improvement
in this position, but further improvement is required to achieve
the pre-SAP position.
We have taken the decision not to report the cash position
exclusive of Customer Specific Financing ("CSF") in the interest of
reducing the complexity of our financial reporting, as we expect
CSF to remain broadly stable for future periods.
Dividend
We are pleased to announce an interim dividend of 5.9 pence per
share (H1 2013: 5.2 pence). This is in line with our policy that
the interim dividend will be approximately one-third of the
previous year's full dividend. The interim dividend will be paid on
17 October 2014. The dividend record date is set on 19 September
2014, and the shares will be marked ex-dividend on 17 September
2014.
Outlook
In line with the Board's expectations, the company is heading
for another year of record adjusted* pre-tax profits in 2014.
Additionally, the company continues to make significant incremental
organic investments through our income statement to sustain profit
growth into the future.
The performance, particularly of the UK in the first half of
2014, has given us a lot of encouragement both in the period and
for future prospects due to high utilisation, strong customer
demand, renewals and new business wins. This is backed up by a
significant new business pipeline. Services growth going forward in
Germany is likely to increase due to new contracts already secured
and easier comparatives. We also expect the German Supply Chain
business to stabilise. Our French business is more difficult to
predict. While we have a significant plan of action, and new
management in place, much work needs to be done in the second half
of 2014 and thereafter.
The investments we continue to make in our business and the
market opportunities that are presenting themselves gives us
confidence for the rest of the year and beyond.
Computacenter in the United Kingdom
The UK business performed strongly in the six month period to 30
June 2014, accelerating the significant growth rates in both
revenue and profitability that it achieved in the first half of
2013. Total revenue grew at over five times the rate seen in the
comparative prior year period, increasing by 14.1% to GBP675.4
million on an as reported basis (H1 2013: GBP592.1 million), whilst
adjusted* operating profit also increased by 24.4% to GBP24.9
million.
The ongoing delivery of new Managed Services wins in the UK has
enabled excellent Supply Chain revenue growth. The UK Supply Chain
business grew by 17.6% over the period to GBP434.0 million (H1
2013: GBP369.1 million) and was particularly strong in the first
quarter of the year. It was in itself supported by the excellent
relationships we have with our vendors, which continue to go from
strength to strength due to the added value that we deliver through
our Professional Services business, in which we deploy and maximise
customer benefit from our vendor's technologies.
Our Supply Chain business also continues to be assisted by the
ongoing macro-economic recovery in the UK, and we were encouraged
by the fact that our gross Supply Chain margins remained stable,
notwithstanding the significant increase in sales volumes during
the period. However, whilst we were pleased with this performance
which has made a material contribution to the UK business over the
period, as we have consistently re-iterated, our Supply Chain
business continues to be impacted by the short and medium-term
buying patterns of our customers.
Therefore, our strategic focus has been to develop our
capability and capacity to enable our customers' users principally
through our Services business. Through this aspiration, we aim to
deliver value that is predictable and sustainable through the
continued growth of our Managed Services business. Additionally, we
look to deliver high-quality, innovative Professional Services
solutions that deliver a comparatively higher rate of return on
capital. In light of this focus, we are pleased to report that,
despite significant Services growth in 2013, the UK's Services
business still grew by 8.2% to GBP241.3 million (H1 2013: GBP223.1
million), increasing the rate of growth by over a third against
that seen in the first half of 2013. This increase in Services
revenue has helped to ensure that utilisation levels within the
Group's central operations engines have remained high and Services
margins have been maintained.
The high utilisation of our Services staff has been especially
prevalent within our Professional Services business during the
first half of the year, as anticipated. This continued to be
dominated by projects focused on the modernisation of our
customers' user workspace. We see nothing at present to indicate
that this demand for our Professional Services offerings will abate
in the short-term, as we continue to see large numbers of our
customers modernise their user environments through Windows 7/8 and
Office 2010 upgrades.
In the medium-term, we believe that our customers will continue
to enable their users' productivity and effectiveness. As such, in
order to sustain our rate of Professional Services growth, we are
very focused on further accelerating our Professional Services
through related Datacenter and Networking upgrade and
transformation activity. We also believe that significant
Professional Services demand will be based around 'mobility', and
given the significant investment that the Group is making to
develop its capability in this area, we are optimistic that the UK
business will be in a position to capitalise on this.
Our UK Managed Services business has made good progress during
the first half of the year, which has seen a number of successful
renewals, with one particularly significant renewal of a major
customer contract. The Group's investment in its IT Services
geographic footprint is also yielding positive outcomes as
evidenced by the renewal of a UK customer contract based on the
transfer of its Service desk to our Hungarian location, which has
now been completed successfully and in accordance with plan.
The UK business has also recently signed a Managed Services
agreement with a delivery and logistics company for an initial
three-year term, with four two-year extensions available. We
believe that this success reflects the ability of our experienced
sales management to select bidding opportunities where we have a
competitive advantage. This win also illustrated the material
contribution that reference-ability from existing Services
customers can make towards the successful outcome on any new bid,
confirming the importance of delivering long term customer value as
a priority, as set out in the Group's business model in its 2013
Report and Accounts.
The UK Services business has also signed a contract with Network
Rail to deliver workplace support, which will help improve its end
user experience and employee productivity. Under the five-year
contract, Computacenter will deliver a major workplace
transformation programme incorporating the deployment of new
desktop hardware including thin client devices and Microsoft
Windows 7. The contract covers more than 27,000 end user devices
such as desktops, laptops and thin clients at 1,777 sites across
the UK. Computacenter's industrialised approach and best practice
processes will enable it to deliver consistent support services
across all these locations, which include signal boxes, train
stations and Network Rail offices.
We remain optimistic that the growth of our Managed Services
business will remain strong in the medium term, as the business
continues to invest in developing our portfolio of Services
offerings to enable our customers' users. Our Managed Services
pipeline for the second half of the year is strong, and we are
confident that we will be able to take advantage of these
opportunities. However, as we try to sustain our revenue growth,
our established governance processes will remain absolutely central
to our ability to maintain appropriate Services margins,
particularly as some new contracts may involve technology
transformation and as our global service reach extends further
afield. We continue to invest in and update these processes to
ensure that they keep pace with the development of our Services
offerings.
Following a year of consolidation at our IT redeployment and
recycling subsidiary, RDC, the business was able to make good
progress with its new ERP system implementation now firmly behind
it. It is now reaping the benefit of having a stable IT system in
place, the roll-out of greater levels of automation within its
sales and reporting processes and re-location to new, larger
processes in Braintree, Essex in 2012. Total adjusted* operating
profit at RDC during the reporting period was up by 28.7% on an as
reported basis against the comparative period from the prior
year.
We are very encouraged by the performance of the UK business
during the first half of the year, and we move forward into the
second half of 2014 with confidence that we can sustain our growth
of revenue and profitability.
Computacenter in Germany
Total revenue reduced by 9.6% in constant currency to EUR640.8
million (H1 2013: EUR709.0 million), primarily as a result of a
significant revenue reduction in our Supply Chain business.
Adjusted* operating profit for the German segment, which excludes
the three onerous contracts, reduced by 16.3% in constant currency
to EUR9.5 million (H1 2013: EUR11.4 million).
Supply Chain revenue reduced by 15.4% in constant currency to
EUR397.8 million (H1 2013: EUR470.0 million). Whilst we are
particularly disappointed with this performance, it should be noted
that just over 40 percent of this reduction relates to a single low
margin software licence of circa EUR30 million sold in the second
quarter of 2013 and not repeated this year. The Supply Chain
business was also materially impacted by the loss of one
significant customer contract during the second quarter of 2013 and
a weaker performance by our datacenter business. However, whilst
volumes have been significantly reduced, it is important to note
that margins with our Supply Chain business have remained
stable.
More significantly in terms of the Group's overall Services-led
strategy, we are beginning to see some positive progress with our
Managed Services business in Germany. Services revenue grew by 1.7%
in constant currency to EUR243.0 million (H1 2013: EUR239.0
million), with the business beginning to deliver some new contract
wins which are likely to increase its growth rate going forward.
These have all been negotiated and designed in accordance with our
industrialised Group bidding and contracting processes, which were
implemented into the business through our Group Operating Model
during 2013.
We are particularly encouraged by the recent win of an IT
help-desk deal for a large German automobile manufacturer which
represents, in revenue terms, the largest Managed Services contract
that the German business has won since the issues arising from the
three onerous contracts entered into at the end of 2011. Our
business has agreed to provide support for the Company's 150,000
users. Computacenter has won a four-year workplace outsourcing deal
with the German insurance company, Talanx. Under the new contract,
we will provide centralised support services for 12,000 Talanx
employees from our shared operations centres in Erfurt and Kerpen
and shared datacenter in Frankfurt.
We are confident that with the implementation of our Group
Operating Model and the restructuring and realignment of our sales
force having taken place, we have a solid foundation on which to
aggressively pursue Managed Services opportunities in Germany. The
prospect pipeline looks strong for the second half of the year, and
our primary focus will be on delivering further and increased
Managed Services growth during that time.
As our industrialised bidding and contracting processes continue
to take effect, we are seeing an ongoing gradual increase in our
Services margins on existing business. We believe that there is
scope for a further increase of margins during the second half of
the year, as these processes are further refined and utilised more
efficiently and our German workforce becomes increasingly familiar
with them. Additional Services contract wins that materially
utilise the central Services engines in the second half of the year
would assist in improving Services margins further.
We have been pleased with the performance of our Professional
Services business, which continues to benefit from significant
demand for workplace offerings, especially ongoing Windows
migrations. Our strong consulting capability is also assisting our
growth in this area and we anticipate that the strength of this
performance will continue for the remainder of 2014.
During the period, the business carried out a project for our
long-standing customer, a chemical production company, to migrate
its existing unified communications and collaborations solution to
a virtualised platform. During the project, Computacenter migrated
30,000 users in 20 countries over five consecutive weekends. With
the new consistent and consolidated unified communications and
collaboration environment, the customer has reduced its operating
costs and created the basis for the use of an up-to-date and
future-oriented solution.
Our three onerous contracts in Germany have continued to perform
in line with our expectations. Therefore, the provision held at 30
June 2014 for the losses expected to be incurred on those contracts
between 1 July 2014 and the end of their lifetimes remains adequate
and appropriate. Given that service levels have been at acceptable
levels for some time on these contracts, we are not aware of any
reason why this position should change during their remaining
lifetimes. It should be noted that we have many other contracts
with these customers and they continue to make a significant
contribution to the Group's overall profitability.
Computacenter in France
During the first six months of 2014, total revenue increased by
15.1% in constant currency, to EUR281.0 million (H1 2013: EUR244.1
million). The majority of this increase was attributable to the
Supply Chain business, which increased by 17.4% over the period to
EUR234.9 million (H1 2013: EUR200.2 million). However, margins
across the business remain challenging, with the adjusted*
operating loss increasing in constant currency from EUR5.4 million
at the end of H1 2013, to EUR6.9 million at the end of the
period.
We are encouraged by this Supply Chain revenue performance,
which we believe is testament to the delivery of an improved
customer experience. It also illustrates that our systems issues,
which caused operational problems in the business in 2013,
affecting its ability to manage the delivery of product and parts
through its logistics operation, are now behind us and have not
resulted in the loss of any of our material Supply Chain
customers.
However, we are also aware that this growth has been flattered
by a very weak comparator from June 2013, during which the French
business migrated across to the Group ERP system, and has
additionally been generated by the lowest-margin areas of the
business, predominately in workplace product sales and software. We
are therefore aware of the need to build our sales of Datacenter
and Networking related products to ensure that we create a balanced
portfolio from our customer set.
Computacenter in France continues its journey to become a
Services-led business, with its business model more aligned with
those seen in the Group's UK and German subsidiaries, having an
ability to deliver on the Group's strategic objectives and being
more resilient to the impact of negative external economic
conditions.
This process is still in its very early stages, and although we
can report that Services revenue was up by 4.8% in constant
currency to EUR46.1 million (H1 2013: EUR43.9 million), this was
due to the ongoing take-on of one very large Managed Services
contract during the period. Without this new contract, Services
revenue was down by 5.8% in constant currency against that achieved
in the first half of 2013, which has materially impacted Services
margins. We remain focused on developing a business that is
consistently able to design, sell and deliver high-quality IT
Services and Solutions that enable the users of our target
customers throughout the Group. A number of actions have taken
place to facilitate, and where possible, accelerate this process
during the period.
Firstly, we are aligning our structure so that it better serves
our large customers in the private and public sector, to ensure
that we are best placed to offer the full portfolio of
Computacenter Product and Services offerings. We have reviewed our
customer base in detail to ensure that the customers we do serve
fit the size and profile that enable us to deliver IT value for
them, and appropriate financial returns for the Group.
We are also investing to support our customers in the area of
Managed Services. As part of this, we are developing our IT
Services desk French language capability through the establishment
of an additional location in Montpellier, France prior to the end
of 2014. Our journey towards establishing growth and improved
governance procedures within our Services business has been
assisted by the implementation of the Group Operating Model during
the period. We are already seeing much improved customer service
levels, as the French business begins to benefit from having the
experience and expertise of Group Management at its disposal. We
are confident that the implementation of the Group ERP system,
which has now bedded down, will also provide a solid foundation to
improve the financial performance of the business and the quality
of our back-office processes moving forward.
As detailed above, gross margins remain challenging across the
business, particularly within Services. The loss of a small number
of important Services deals during 2013 has impacted Services
margin, principally due to the resulting poor utilisation of staff,
especially within our Professional Services and Maintenance
businesses.
We remain uncompetitive and in order to improve the long-term
profitability of our French business, we are taking steps to
address our cost base. We have previously announced that, as a
result of the action we are taking to increase the ability of the
business to compete, we have taken an exceptional restructuring
charge of GBP9.1 million as at 30 June 2014. In line with the
Group's accounting policy, the charge has been classed as
'exceptional' due to the materiality, infrequency and nature of the
restructuring plan, and it represents the estimated costs of
completing the exercise currently being prepared for
implementation. The plan for the exercise is well advanced and has
been comprehensively communicated to the affected parties and
appropriate authorities, and we expect it to be completed during
the second half of 2014.
The French business has also seen a change of Management during
the period in order to drive the significant change action that is
taking place there. Ms Isabelle Roux-Buisson has been appointed as
its new Country Unit Leader and will oversee the implementation of
its strategic re-positioning to be Services-led. Isabelle comes
with more than 25 years of experience in the IT industry and has
held a number of general management positions for strategic
business units or large regions of leading international firms.
Isabelle has spent much of her career with Hewlett-Packard,
occupying multiple functions in various groups in EMEA and the
USA.
Whilst the significant and wide-ranging action that we are
taking in France is yet to positively impact the financial
achievement of the business, we are confident that it is necessary
to ensure the establishment of a profitable and sustainable entity
in the medium-term.
Computacenter in Belgium
The Group's Belgian business performed strongly over the first
half of the year, achieving significant levels of growth in both
revenue and profitability across the business. Total revenue for
the reporting period increased by 14.8% in constant currency to
EUR31.0 million (H1 2013: EUR27.0 million), whilst adjusted*
operating profit also increased by approximately 63.1% in constant
currency to EUR1.2 million.
Total Supply Chain revenue, in constant currency, increased by
15.5% to EUR19.3 million (H1 2013: EUR16.7 million). Whilst this
performance was slightly flattered by a drop in demand for our
Supply Chain offerings during the first half of 2013, and therefore
a weaker comparative performance, it was a pleasing achievement
which has been driven principally by the ongoing improvement of
economic market conditions in Belgium, and our ability to win a
number of international procurement contracts during the first half
of 2014. This included an international workplace contract with
Elia, the Belgian high-voltage transmission system operator. This
contract was won with the assistance of Computacenter in Germany,
which is covering Elia's German subsidiary.
Overall, Services revenue has also increased significantly over
the period by almost 13.7% in constant currency to EUR11.7 million
(H1 2013: EUR10.3 million). This has been assisted by a number of
successful Managed Services contract renewals, and on a number of
these, we have seen the customer increase the scope of Services
that it receives from us. We believe this is testament to the high
levels of Services execution which we are delivering to our
existing customers.
Our Services performance has also been assisted by the
contribution of Informatic Services IS ("IS"), the business we
acquired in December 2012, which has continued to perform in line
with our forecasts. The process to integrate IS, which has now been
ongoing for over a year, continues to make good progress and as a
result we are now starting to utilise combined capabilities across
both businesses. We anticipate that the integration process will
have been completed by the end of the year.
We remain confident that the business will continue to make good
progress during the second half of the year. However, given the
comparatively strong performance by the business in H2 2013, we
expect that rates of growth will reduce from those seen so far
during 2014. A continued economic recovery in Belgium, which
clearly remains outside of our control, will be important in
achieving continued Supply Chain growth, whilst in Services, we
have a number of upcoming renewal opportunities during H2 2014
which we will need to execute successfully in order to sustain our
revenue growth in that area.
Risk
Our Risk Management Approach and the principal risks to our
business remain as set out on pages 12 to 15 of our 2013 Report and
Accounts.
Our principal risks continue to be concentrated in the
availability and resilience of systems, our people, our cost base,
technology change, and in the design, take on, and running of large
services contracts, and are shown on the following table.
Principal risks Potential impacts Primary mitigations
-------------------------------- ----------------------------- ---------------------------------------------
A Failure(s) leading -- Customer dissatisfaction -- All centrally-hosted systems
to unacceptably long -- Financial penalties are built and operated on High
outages or regular -- Contract cancellations Availability infrastructure.
short outages of our -- Reputational -- Enhanced Group IS support
customer-facing systems. damage models, with key Operations
and Applications staff on call
24x7 to respond quickly in the
event of failures or issues.
-------------------------------- ----------------------------- ---------------------------------------------
B Not recruiting and -- Customer dissatisfaction -- We perform regular remuneration
retaining the right -- Financial penalties benchmarking to ensure we remain
calibre of staff across -- Contract cancellations competitive.
any of our customer -- Reputational -- We invest in management development
facing functions. damage programmes.
-- There is an annual staff
survey to understand employee
views.
-- We have implemented a series
of staff retention initiatives.
-------------------------------- ----------------------------- ---------------------------------------------
C We fail to implement -- Reduced margin -- The Group Operating Model
appropriate designs -- Loss-making is in place in the UK, Germany
and pricing structures contracts and France. This incorporates
for Managed Services -- Customer dissatisfaction mandatory gateway governance
or outcome based project -- Financial penalties products and processes, as well
management contracts. -- Contract cancellations as the Group signing policy.
-- Reputational -- There is Board oversight
damage of significant bids.
-------------------------------- ----------------------------- ---------------------------------------------
D Inadequate succession -- Lack of leadership -- Board consideration of succession
planning and not eough plans.
management depth within -- Management development programmes
key senior management to develop talent.
areas of the business.
-------------------------------- ----------------------------- ---------------------------------------------
E Letting our direct -- Reduced margin -- We employ a range of metrics
costs run out of control on a monthly and quarterly basis
and not taking advantage to ensure that we properly manage
of productivity and our direct costs and monitor
cost reduction opportunities. productivity.
-- We have a programme of activities
to deliver cost reduction opportunities,
through the reduction of manual
effort.
-------------------------------- ----------------------------- ---------------------------------------------
F Technology change dramatically -- Reduced margin -- We mitigate this through
reduces customer need -- Excess operational a range of measures including
and demand for our staff win/loss reviews, senior management
Service offerings. -- Contracts not forums and strategy reviews
renewed where we consider our offerings
alongside where the market is
going.
-------------------------------- ----------------------------- ---------------------------------------------
G Failure to deliver -- Reduced margin -- Annual senior management
and manage effectively -- Customer dissatisfaction review of our International
our international business -- Financial penalties business and team.
strategies. By association -- Contract cancellations -- In relation to our partner
the risk around take-on -- Reputational network we have upgraded our
and management of our damage contracts and have increased
international partners. the level of monitoring activity.
-------------------------------- ----------------------------- ---------------------------------------------
H Failure to develop -- Loss of synergies -- Deployment of Group Operating
a Group culture. -- Loss of brand Model resulting in consistent
identity ways of working.
-- Initiatives to reduce in-country
barriers.
-------------------------------- ----------------------------- ---------------------------------------------
I Letting our inventory -- Financial impact -- We mitigate these risks through
and/or receivables through obsolete a range of measures including:
get out of control. stock and/or bad monthly and quarterly metrics,
debts credit scoring and credit limits
for customers, and utilisation
of direct delivery where possible.
-------------------------------- ----------------------------- ---------------------------------------------
J A security hacking -- Customer dissatisfaction -- We have well-communicated
or virus problem at -- Financial penalties Group policies for information
a customer that is -- Contract cancellations security and virus prevention.
due to Computacenter's -- Reputational -- There is specific induction
negligence, mismanagement damage and training for staff working
or employee rogue behaviour on customer sites/systems, as
leading to a breach well as specific policies and
and/or loss of data. procedures for anyone working
behind a customer firewall.
-------------------------------- ----------------------------- ---------------------------------------------
K Not fully understanding -- Reduced margin -- Our Group Legal team review
employment terms and all bids that involve staff
conditions and the transfer.
obligations on Computacenter -- We build the effects of transferring
resulting from transferring staff into our cost and pricing
staff into the Company models, and seek to build commercial
terms into new contracts to
minimise the impact.
-------------------------------- ----------------------------- ---------------------------------------------
L Failure to deliver -- Customer dissatisfaction -- The Group Operating Model
against contract during -- Financial penalties is in place in the UK, Germany
transformation and -- Contract cancellations and France. This incorporates
committed Service productivity -- Reputational mandatory gateway governance
improvements and Service damage products and processes, as well
levels in contract -- Reduced margin as the Group signing policy
life leading to penalty and Service management best
clauses or financial practice.
underachievement and -- We have an increasingly mature
a lack of Service or root cause analysis and lessons
technical innovation. learnt process for complex transformations.
-- We perform regular commercial
and contract 'deep dives' to
manage Service productivity
improvements.
-------------------------------- ----------------------------- ---------------------------------------------
M Not investing appropriately -- Reduced margin -- This is linked to Risk F
or over investing in -- Win less new - we mitigate this through a
the wrong automation, business range of measures including
self-service and remote -- Contracts not win/loss reviews, senior management
tools when compared renewed forums and strategy reviews
to our competition. where we consider our offerings
alongside our competitors and
where the market is going.
-------------------------------- ----------------------------- ---------------------------------------------
Mike Norris
28 August 2014
Responsibility statement
The Directors confirm that to the best of their knowledge:
-- This financial information has been prepared in accordance with IAS 34;
-- This interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year);and
-- This interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein.)
MJ Norris FA Conophy
Chief Executive Finance Director
28 August 2014 28 August 2014
On behalf of the Board
Independent review report to Computacenter plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2014 which comprises of the Consolidated
Income Statement, Consolidated Statement of Comprehensive Income,
Consolidated Balance Sheet, Consolidated Statement of Changes in
Equity, Consolidated Cash Flow Statement and the related
explanatory notes that have been reviewed. We have read the other
information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2014 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
28 August 2014
Consolidated income statement
For the six months ended 30 June
2014
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
Note GBP'000 GBP'000 GBP'000
Revenue 4 1,458,284 1,426,346 3,072,075
Cost of sales (1,268,013) (1,241,158) (2,668,814)
--------------- --------------- ------------
Gross profit 190,271 185,188 403,261
Administrative expenses (161,830) (159,003) (321,096)
Operating profit:
Before amortisation of intangibles
and exceptional items 28,441 26,185 82,165
Amortisation of acquired intangibles (884) (1,296) (2,375)
Onerous contracts - (15,780) (15,739)
Non-cash impairment - (12,195) (12,195)
Other exceptional items (9,100) (1,324) (830)
--------------- --------------- ------------
Total exceptional items 6 (9,100) (29,299) (28,764)
-------------------------------------- ----- --------------- --------------- ------------
Operating profit/(loss) 18,457 (4,410) 51,026
Finance revenue 771 1,001 1,351
Finance costs (1,194) (941) (1,852)
Profit before tax:
Before amortisation of intangibles
and exceptional items 4 28,018 26,245 81,664
Amortisation of acquired intangibles (884) (1,296) (2,375)
Onerous contracts - (15,780) (15,739)
Non-cash impairment - (12,195) (12,195)
Other exceptional items (9,100) (1,324) (830)
--------------- --------------- ------------
Total exceptional items 6 (9,100) (29,299) (28,764)
-------------------------------------- ----- --------------- --------------- ------------
Profit/(loss) before tax 4 18,034 (4,350) 50,525
Income tax expense:
Before amortisation of intangibles
and exceptional items (8,036) (7,304) (19,325)
Tax on amortisation of intangibles 117 122 244
Tax on onerous contracts - 1,894 1,889
Tax on non-cash impairment - 1,014 1,014
Tax on other exceptional items - 146 (700)
--------------- --------------- ------------
Tax on exceptional items - 3,054 2,203
Exceptional tax items 6 - - (489)
------------
Income tax expense 7 (7,919) (4,128) (17,367)
Profit/(loss) for the period 10,115 (8,478) 33,158
=============== =============== ============
Attributable to:
Equity holders of the parent 10,115 (8,478) 33,160
Non-controlling interest - - (2)
Profit/(loss) for the period 10,115 (8,478) 33,158
=============== =============== ============
Earnings per share
- basic for profit /(loss) for the
period 8 7.4p (5.7)p 23.2p
- diluted for profit /(loss)for the
period 8 7.4p (5.7)p 23.0p
-------------------------------------- ----- --------------- --------------- ------------
Consolidated statement of comprehensive income
For the six months ended 30 June 2014
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period 10,115 (8,478) 33,158
Items that may be reclassified to profit
or loss:
Loss arising on cash flow hedge (376) (639) (1,403)
Income tax effect 81 149 326
---------- ---------- ---------------
(295) (490) (1,077)
Exchange differences on translation of
foreign operations (5,811) 10,308 4,326
---------- ---------- ---------------
(6,106) 9,818 3,249
---------- ---------- ---------------
Total comprehensive income for the period 4,009 1,340 36,407
========== ========== ===============
Attributable to:
Equity holders of the parent 4,009 1,341 36,407
Non-controlling interest - (1) -
4,009 1,340 36,407
========== ========== ===============
Consolidated balance sheet
As at 30 June 2014
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
Note GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 82,891 95,344 89,044
Intangible assets 95,710 94,393 98,870
Investment in associates 43 620 45
Deferred income tax asset 14,977 17,139 15,172
193,621 207,496 203,131
--------------- ---------- ------------------
Current assets
Inventories 71,840 69,549 58,618
Trade and other receivables 532,520 521,307 667,722
Prepayments 56,745 54,892 61,579
Accrued income 69,180 68,161 53,140
Forward currency contracts 164 83 -
Financial asset - 31,412 -
Current asset investment 13 - 10,000 -
Cash and short-term deposits 70,982 76,336 91,098
---------- ------------------
801,431 831,740 932,157
--------------- ---------- ------------------
Total assets 995,052 1,039,236 1,135,288
=============== ========== ==================
Current liabilities
Trade and other payables 482,414 474,528 604,945
Deferred income 109,060 107,860 115,986
Return of value - 74,965 -
Financial liabilities 11,614 11,650 8,147
Forward currency contracts 700 548 2,360
Income tax payable 9,118 4,144 10,239
Provisions 11 10,442 8,203 6,005
623,348 681,898 747,682
--------------- ---------- ------------------
Non-current liabilities
Financial liabilities 5,350 8,974 11,540
Provisions 11 11,491 12,384 10,449
Deferred income tax liabilities 829 1,012 947
17,670 22,370 22,936
--------------- ---------- ------------------
Total liabilities 641,018 704,268 770,618
Net assets 354,034 334,968 364,670
=============== ========== ==================
Capital and reserves
Issued capital 9,276 9,250 9,271
Share premium 4,597 3,654 4,362
Capital redemption reserve 74,963 74,957 74,963
Own shares held (11,655) (12,942) (11,976)
Foreign currency translation
reserve 838 12,633 6,649
Retained earnings 276,002 247,404 281,388
--------------- ---------- ------------------
Shareholders' equity 354,021 334,956 364,657
Non-controlling interest 13 12 13
Total equity 354,034 334,968 364,670
=============== ========== ==================
Approved by the Board on 28 August 2014
MJ Norris, Chief Executive FA Conophy, Finance Director
Consolidated statement of changes in equity
Attributable to equity holders of the parent
-------------------------------------------------------------------------------------------------------------------------
Foreign
Capital Own currency
Issued Share redemption shares translation Retained Minority Total
capital premium reserve held reserve earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2013 9,234 3,769 74,957 (13,848) 2,325 345,893 422,330 13 422,343
Profit for the
period - - - - - (8,478) (8,478) - (8,478)
Other
comprehensive
income - - - - 10,308 (490) 9,818 (1) 9,817
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
Total
comprehensive
income - - - - 10,308 (8,968) 1,340 (1) 1,339
Cost of
share-based
payment - - - - - 527 527 - 527
Tax on
share-based
payment
transactions - - - - - (268) (268) - (268)
Exercise of
options 1 57 - 906 - (906) 58 - 58
Bonus issue 15 (15) - - - - - - -
Expenses on
bonus
issue - (157) - - - - (157) - (157)
Return of
value - - - - - (73,115) (73,115) - (73,115)
Equity
dividends - - - - - (15,759) (15,759) - (15,759)
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
At 30 June
2013 9,250 3,654 74,957 (12,942) 12,633 247,404 334,956 12 334,968
Profit for the
period - - - - - 41,638 41,638 (2) 41,636
Other
comprehensive
income - - - - (5,984) (587) (6,571) 3 (6,568)
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
Total
comprehensive
income - - - - (5,984) 41,051 35,067 1 35,068
Cost of
share-based
payment - - - - - 543 543 - 543
Tax on
share-based
payment
transactions - - - - - 394 394 - 394
Exercise of
options 27 1,137 - 966 - (966) 1,164 - 1,164
Expenses on
bonus
issue - (429) - - - - (429) - (429)
Redemption of
shares (6) - 6 - - - - - -
Equity
dividends - - - - - (7,038) (7,038) - (7,038)
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
At 31 December
2013 9,271 4,362 74,963 (11,976) 6,649 281,388 364,657 13 364,670
Profit for the
period - - - - - 10,115 10,115 - 10,115
Other
comprehensive
income - - - - (5,811) (295) (6,106) - (6,106)
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
Total
comprehensive
income - - - - (5,811) 9,820 4,009 - 4,009
Cost of
share-based
payment - - - - - 1,724 1,724 - 1,724
Tax on
share-based
payment
transactions - - - - - 27 27 - 27
Exercise of
options 5 235 - 321 - (321) 240 - 240
Equity
dividends - - - - - (16,636) (16,636) - (16,636)
At 30 June
2014 9,276 4,597 74,963 (11,655) 838 276,002 354,021 13 354,034
------------------- -------------- ----------------- ------------- ---------------- --------------- --------------- ------------ -------------------
Consolidated cash flow statement
For the six months ended 30 June 2014
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
Note GBP'000 GBP'000 GBP'000
Operating activities
Profit/(loss) before tax 18,034 (4,350) 50,525
Net finance expense/(income) 423 (60) 501
Depreciation 10,263 11,705 22,735
Amortisation 6,056 4,269 9,676
Impairment of intangible assets - 12,195 12,195
Share-based payments 1,724 527 1,070
Loss/(profit) on disposal of property,
plant and equipment 106 (442) (215)
Loss on disposal of intangibles 133 103 642
(Increase)/decrease in inventories (15,167) 1,047 10,596
Decrease/(increase) in trade and other
receivables 107,200 59,274 (94,982)
(Decrease)/increase in trade and other
payables (108,140) (96,482) 52,997
(Decrease)/increase in customer contract
provisions (2,375) 10,745 7,443
Other adjustments 623 267 (456)
---------- ---------- ----------
Cash generated from/(used in) operations 18,880 (1,202) 72,727
Income taxes paid (8,592) (8,582) (9,624)
Net cash flow from operating activities 10,288 (9,784) 63,103
---------- ---------- ----------
Investing activities
Interest received 1,197 956 1,741
Decrease in current asset investment - - 10,000
Acquisition of subsidiaries, net of
cash acquired 10 (465) - -
Sale of property, plant and equipment 31 51 921
Purchases of property, plant and equipment (5,216) (4,245) (9,609)
Purchases of intangible assets (3,638) (3,095) (15,544)
Net cash flow from investing activities (8,091) (6,333) (12,491)
---------- ---------- ----------
Financing activities
Interest paid (1,783) (830) (2,663)
Dividends paid to equity shareholders
of the parent (16,636) (15,759) (22,797)
Return of Value - - (73,115)
Expenses on Return of Value - - (586)
Proceeds from issue of shares 240 58 1,222
Increase in other financial assets - (31,412) -
Repayment of capital element of finance
leases (3,410) (4,090) (8,066)
Repayment of loans (2,378) (651) (2,766)
New borrowings 2,363 - 9,267
Net cash flow from financing activities (21,604) (52,684) (99,504)
---------- ---------- ----------
Decrease in cash and cash equivalents (19,407) (68,801) (48,892)
Effect of exchange rates on cash and
cash equivalents (1,363) 3,579 1,755
Cash and cash equivalents at the beginning
of the period 90,334 137,471 137,471
Cash and cash equivalents at the end
of the period 69,564 72,249 90,334
========== ========== ==========
Notes to the accounts
1 Corporate information
The interim condensed consolidated financial statements of the
Group for the six months ended 30 June 2014 were authorised for
issue in accordance with a resolution of the Directors on 28 August
2014.
Computacenter plc is a limited company incorporated and
domiciled in England whose shares are publicly traded.
2 Basis of preparation
The interim condensed consolidated financial statements for the
six months ended 30 June 2014 have been preparedin accordance with
International Accounting Standard 34 'Interim Financial Reporting',
as adopted by the European Union. They do not include all of the
information and disclosures required in the annual financial
statements, and should be read in conjunction with the Group's
annual financial statements as at 31 December 2013 which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
The Group has maintained its positive cash position in the
period. In order to ensure that the Group can maintain its strong
liquidity position it has a GBP40 million committed facility, which
remained unutilised at the reporting date. The Group's forecast and
projections, which allow for reasonably possible variations, show
that the Group will continue to maintain its strong liquidity
position, and therefore supports the Directors' view that the Group
has sufficient funds available to meet its foreseeable
requirements. The Directors have concluded therefore that the going
concern basis remains appropriate.
3 Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements for
the year ended 31 December 2013, except for the adoption of new
standards and interpretations as of 1 January 2014, which did not
have any impact on the accounting policies, financial position or
performance of the Group, as noted below:
-- IAS 32 amendments - Offsetting financial assets and financial liabilities
-- IAS 39 amendments - Novation of derivatives and continuation of hedge accounting
-- IAS 36 amendments - Recoverable Amount Disclosures for Non-Financial Assets
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
4 Segment information
For management purposes, the Group is organised into
geographical segments, with each segment determined by the location
of the Group's assets and operations. The Group's business in each
geography is managed separately and held in separate statutory
entities.
No operating segments have been aggregated to form the
reportable operating segments shown below.
Management monitors the operating results of its geographical
segments separately for the purposes of making decisions about
resource allocation and performance assessment. Segment performance
is evaluated based on adjusted operating profit or loss, which is
measured differently from operating profit or loss in the
consolidated financial statements. Adjusted operating profit or
loss takes account of the interest paid on customer-specific
financing ('CSF') which management consider to be a cost of sale.
Excluded from adjusted operating profit are the amortisation of
acquired intangibles and exceptional items, as management do not
consider these items when reviewing the underlying performance of a
segment.
Segmental performance for the periods to H1 2014, H1 2013 and
Full Year 2013 were as follows:
Six months ended 30 June 2014 (unaudited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Supply Chain revenue 434,042 326,830 193,037 15,862 969,771
--------- --------- --------- -------- ----------
Services revenue
Professional Services 59,768 55,446 10,316 1,473 127,003
Contractual Services 181,570 144,246 27,525 8,169 361,510
--------- --------- --------- -------- ----------
Total Services revenue 241,338 199,692 37,841 9,642 488,513
--------- --------- --------- -------- ----------
Total revenue 675,380 526,522 230,878 25,504 1,458,284
--------- --------- --------- -------- ----------
Results
Adjusted gross profit 102,291 69,648 14,734 3,256 189,929
Administrative expenses (77,342) (61,807) (20,406) (2,275) (161,830)
--------- --------- --------- -------- ----------
Adjusted operating profit/(loss) 24,949 7,841 (5,672) 981 28,099
Adjusted net interest 387 326 (738) (56) (81)
--------- --------- --------- -------- ----------
Adjusted profit/(loss) before
tax 25,336 8,167 (6,410) 925 28,018
Exceptional costs - - (9,100) - (9,100)
Amortisation of acquired intangibles (240) (600) - (44) (884)
--------- --------- --------- -------- ----------
Statutory profit/(loss) before
tax 25,096 7,567 (15,510) 881 18,034
--------- --------- --------- -------- ----------
Other segment information
Share-based payments 1,373 178 173 - 1,724
--------- --------- --------- -------- ----------
Six months ended 30 June 2013 (unaudited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Supply Chain revenue 369,054 400,016 170,356 14,227 953,653
---------------------- -------------------- ------------------ ---------------- ----------
Services revenue
Professional Services 52,798 47,736 10,690 1,230 112,454
Contractual Services 170,297 155,676 26,711 7,555 360,239
---------------------- -------------------- ------------------ ---------------- ----------
Total Services revenue 223,095 203,412 37,401 8,785 472,693
---------------------- -------------------- ------------------ ---------------- ----------
Total revenue 592,149 603,428 207,757 23,012 1,426,346
---------------------- -------------------- ------------------ ---------------- ----------
Results
Adjusted gross profit 90,528 73,308 18,198 2,714 184,748
Administrative expenses (70,475) (63,605) (22,832) (2,091) (159,003)
---------------------- -------------------- ------------------ ---------------- ----------
Adjusted operating profit/(loss) 20,053 9,703 (4,634) 623 25,745
Adjusted net interest 625 144 (207) (62) 500
---------------------- -------------------- ------------------ ---------------- ----------
Adjusted profit/(loss) before
tax 20,678 9,847 (4,841) 561 26,245
Exceptional items:
- onerous contracts - (15,780) - - (15,780)
* impairment of intangibles - - (12,195) - (12,195)
- exceptional costs - (1,324) - - (1,324)
---------------------- -------------------- ------------------ ---------------- ----------
- (17,104) (12,195) - (29,299)
Amortisation of acquired
intangibles (396) (613) (242) (45) (1,296)
---------------------- -------------------- ------------------ ---------------- ----------
Statutory profit/(loss) before
tax 20,282 (7,870) (17,278) 516 (4,350)
---------------------- -------------------- ------------------ ---------------- ----------
Other segment information
Share-based payments 378 64 85 - 527
---------------------- -------------------- ------------------ ---------------- ----------
Year ended 31 December 2013 (audited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Supply Chain revenue 828,097 859,404 389,517 29,195 2,106,213
----------------- -------------------- ------------------ ---------------- ----------
Services revenue
Professional Services 113,102 104,446 20,794 3,716 242,058
Contractual Services 344,930 307,592 56,008 15,274 723,804
----------------- -------------------- ------------------ ---------------- ----------
Total Services revenue 458,032 412,038 76,802 18,990 965,862
----------------- -------------------- ------------------ ---------------- ----------
Total revenue 1,286,129 1,271,442 466,319 48,185 3,072,075
----------------- -------------------- ------------------ ---------------- ----------
Results
Adjusted gross profit 200,097 158,051 38,320 6,006 402,474
Administrative expenses (143,926) (127,403) (45,603) (4,164) (321,096)
----------------- -------------------- ------------------ ---------------- ----------
Adjusted operating profit/(loss) 56,171 30,648 (7,283) 1,842 81,378
Adjusted net interest 791 173 (561) (117) 286
----------------- -------------------- ------------------ ---------------- ----------
Adjusted profit/(loss) before
tax 56,962 30,821 (7,844) 1,725 81,664
Exceptional items:
- onerous contracts - (15,739) - - (15,739)
* impairment of intangibles - - (12,195) - (12,195)
- exceptional costs 3,466 (3,105) (1,191) - (830)
----------------- -------------------- ------------------ ---------------- ----------
3,466 (18,844) (13,386) - (28,764)
Amortisation of acquired
intangibles (792) (1,225) (242) (116) (2,375)
----------------- -------------------- ------------------ ---------------- ----------
Statutory profit/(loss) before
tax 59,636 10,752 (21,472) 1,609 50,525
----------------- -------------------- ------------------ ---------------- ----------
Other segment information
Share-based payments 838 (2) 234 - 1,070
----------------- -------------------- ------------------ ---------------- ----------
5 Seasonality of operations
Historically revenues have been higher in the second half of the
year than in the first six months. This is principally driven by
customer buying behaviour in the markets in which we operate.
Typically this leads to a more pronounced effect on operating
profit. In addition, the effect is compounded further by the
tendency for the holiday entitlements of our employees to accrue
during the first half of the year and to be utilised in the second
half.
6 Exceptional items
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
GBP'000 GBP'000 GBP'000
Operating profit
Onerous contracts - (15,780) (15,739)
Impairment of acquired intangible assets - (12,195) (12,195)
Redundancy and other restructuring costs (9,100) (1,324) (4,291)
Impairment of investment in associate - - (539)
Services contracts re-evaluation - - 4,000
(9,100) (29,299) (28,764)
Income tax
Tax on onerous contracts included in operating
profit - 1,894 1,889
Tax on impairment of acquired intangible
assets - 1,014 1,014
Tax on exceptional items included in operating
profit - 146 (700)
Total tax on exceptional items - 3,054 2,203
Exceptional tax items
-Deferred tax asset in respect of France - - (2,184)
-Tax credit in relation to prior year R&D
claim - - 1,695
---------- ---------- ----------
- 3,054 1,714
Exceptional items after taxation (9,100) (26,245) (27,050)
========== ========== ==========
2014
Computacenter France has incurred an exceptional charge of
GBP9.1 million relating to the estimated costs of a comprehensive
restructuring plan within the Group's French business that has been
provided for at 30 June 2014.
The substantial restructuring exercise currently underway aims
to reduce the cost base, improve the competitiveness and therefore
improve the profitability of the Group's French business.
In line with our accounting policy, management has elected under
IAS1 to report this provision under the heading of "Exceptional
Items" due to the materiality, infrequency and nature of the
restructuring plan. This election provides the best guidance to
users of our external reporting as to the underlying profitability
trends within the Group and to present the results of the Group in
a way that is fair, balanced and understandable. Excluding the
costs related to the restructuring plan is consistent with
treatments of similar costs in prior periods and presents the
Adjusted Profit Before tax in a way that enables users to better
assess the quality of the Groups underlying profitability.
Further details of the treatment of the restructuring costs are
disclosed in note 11.
2013
In Germany three managed service contracts were identified as
onerous. A GBP2.1 million provision was made in December 2012 for
these contracts. A further provision for estimated future losses of
GBP7.5 million was held as at December 2013. This further provision
was classified as an exceptional item due to its size and nature
and the 2012 result was restated to be consistent.
Included within the German segment results in 2012 and 2013 were
losses incurred in relation to these onerous contracts. In order to
provide a clearer understanding of the performance of the remainder
of the business, losses previously recognised within the German
operating result for these contracts were reclassified within
exceptional items. In 2012 trading losses of GBP5.9 million were
incurred on revenues of GBP15.4 million. In 2013 trading losses of
GBP8.2 million were incurred on turnover of GBP23.0 million.
The deterioration in the performance of Computacenter France led
to an assessment of their non-current assets. It was concluded that
the forecasted cash flows for the French cash generating unit did
not fully support the value of non-current assets in the business.
This resulted in an impairment of GBP12.2 million of intangible
assets in the French cash generating unit.
During 2013 Computacenter Germany continued its programme, from
late 2012, to reduce its net operating expenses. As a result,
redundancy costs of GBP3.1 million were incurred during the year,
which due to their size and nature were included within exceptional
items.
Similarly, Computacenter France began a programme to also reduce
its SG&A and restructure its business and senior management in
line with the Group Operating Model. Redundancy related expenses of
GBP1.2 million were included in the 2013 result.
Due to the continued adverse performance of our equity accounted
associate, ICS Solutions Limited, we decided to fully impair the
GBP0.5 million recorded value of our investment.
As part of our normal processes, we carried out a detailed
evaluation of other long-term Services contracts across the Group.
As a result of this on-going evaluation, management calculated that
a positive change in certain estimates resulted in a one-off gain
of GBP4.0 million. Due to the nature of the change in the
estimates, and the size of the gain, it was decided to highlight
this as an exceptional item. This is consistent with the treatment
of the previously identified onerous contracts and provides a
fairer and more balanced understanding of our underlying growth in
profitability.
During the year a deferred tax asset relating to losses carried
forward in France was written off for GBP2.2 million.
Tax relief from prior period Research and Development project
spend on the Group ERP platforms resulted in a prior year
adjustment credited in the statutory tax charge for the year. Due
to the timing, materiality and one-off nature of this relief, it
was decided to classify it as an exceptional tax item.
7 Income tax
The Group calculates the period income tax expense using the tax
rate that would be applicable to the total expected total annual
earnings.
The charge based on the profit/(loss) for
the period comprises:
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
GBP'000 GBP'000 GBP'000
UK corporation tax
* operating result 6,653 5,329 14,395
* exceptional items - - (891)
---------- ---------- ----------
Total UK corporation tax 6,653 5,329 13,504
Foreign tax
* operating result 2,159 2,196 5,031
* exceptional items - (613) (1,994)
---------- ---------- ----------
Total foreign tax 2,159 1,583 3,037
Adjustments in respect of prior periods (103) - (509)
Deferred tax
* operating result (790) (489) 139
* adjustments in respect of prior periods - - 25
Exceptional items - (2,295) 1,171
Total deferred tax (790) (2,784) 1,335
7,919 4,128 17,367
========== ========== ==========
The main rate of corporation tax will be reduced to 20% from 1
April 2015, as enacted in the July 2013 Finance Act. The new rates
will be applied, as appropriate, in the year-end accounts.
8 Earnings per ordinary share
Earnings per share (EPS) amounts are calculated by dividing
profit attributable to ordinary equity holders by the weighted
average number of ordinary shares outstanding during the year
(excluding own shares held).
Diluted earnings per share amounts are calculated by dividing
profit attributable to ordinary equity holders by the weighted
average number of ordinary shares outstanding during the year
(excluding own shares held) adjusted for the effect of dilutive
options.
Adjusted basic and adjusted diluted EPS are presented to provide
more comparable and representative information. Accordingly the
adjusted basic and adjusted diluted EPS figures exclude the
amortisation of acquired intangibles and exceptional items.
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
GBP'000 GBP'000 GBP'000
Profit/(loss) attributable to equity holders
of the parent 10,115 (8,478) 33,160
Amortisation of acquired intangibles attributable
to equity holders of the parent 884 1,296 2,375
Tax on amortisation of acquired intangibles (117) (122) (244)
Exceptional items within operating profit 9,100 29,299 28,764
Tax on exceptional items included in operating
profit - (3,054) (2,203)
Exceptional tax items - - 489
Adjusted profit after tax 19,982 18,941 62,341
---------- ---------- ----------
No.'000 No '000 No '000
Basic weighted average number of shares (excluding
own shares held) 135,961 149,512 142,665
Effect of dilution:
Share options 1,423 1,416 1,428
Diluted weighted average number of shares 137,384 150,928 144,093
========== ========== ==========
H1 2014 H1 2013 Year 2013
pence pence pence
Basic earnings per share 7.4 (5.7) 23.2
Diluted earnings per share 7.4 (5.7) 23.0
Adjusted basic earnings per share 14.7 12.7 43.7
Adjusted diluted earnings per share 14.5 12.5 43.3
-------- -------- ----------
9 Dividends paid and proposed
A final dividend for 2013 of 12.3p per ordinary share was paid
on 20 June 2014. An interim dividend in respect of 2014 of 5.9p per
ordinary share, amounting to a total dividend of GBP8,030,000, was
declared by the Directors at their meeting on 28 August 2014. This
interim report does not reflect this dividend payable.
10 Business combinations
Update on acquisitions made in 2012
On 28 December 2012 the Group acquired 100 per cent of the
voting shares of NEWIS SA and its subsidiary, Informatic Services
IS SA for a cash consideration of EUR2.3million. Additional
consideration of EUR0.6million (GBP0.5million, translated as at the
date of the payment of February 2013) was paid, based on the terms
of the Purchase Agreement. Details of the book and fair values of
the net assets acquired are disclosed in note 16 of the December
2012 Annual Report and Accounts.
11 Provisions
Customer Restruc-turing
contract provisions Property Total
provisions provisions provisions
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2013 2,108 - 8,720 10,828
Arising during the period 10,672 - - 10,672
Utilised - - (1,015) (1,015)
Amounts unused reversed - - (281) (281)
Exchange adjustment 193 - 190 383
------------ --------------- ------------ ------------
At 30 June 2013 12,973 - 7,614 20,587
Arising during the period - - 130 130
Utilised (3,107) - (181) (3,288)
Amounts unused reversed - - (451) (451)
Exchange adjustment (315) - (209) (524)
------------ --------------- ------------ ------------
At 31 December 2013 9,551 - 6,903 16,454
Arising during the period - 9,000 65 9,065
Utilised (2,375) - (588) (2,963)
Exchange adjustment (299) (231) (93) (623)
------------ ------------
At 30 June 2014 6,877 8,769 6,287 21,933
------------ --------------- ------------ ------------
Current June 2014 3,791 3,044 3,607 10,442
Non-current June 2014 3,086 5,725 2,680 11,491
------ ------ ------ -------
Current June 2013 6,282 - 1,921 8,203
Non-current June 2013 6,691 - 5,693 12,384
------ ------ ------ -------
Current December 2013 4,268 - 1,737 6,005
Non-current December 2013 5,283 - 5,166 10,449
------ ------ ------ -------
Customer contract provisions are based on the Directors' best
estimate of the amount of future losses to completion on certain
contractual services contracts in Germany.
Management have a detailed formal plan for the French
restructuring that is sufficiently well advanced and which has been
comprehensively communicated to the affected parties and
appropriate authorities such that a constructive obligation on the
Group has been created. At 30 June 2014 costs related to the
restructuring to satisfy the obligation in France for GBP9,000,000
have been provided for.
Initial operational changes have been implemented which, along
with the communication noted above, have raised a valid expectation
within all affected parties that the Group will carry out the
notified action, as programmed, in the second half of the year.
Management have used the detailed plan itself to reliably estimate
the total cost of the obligation, and the outflow of resources from
the Group which will result, given the information currently
available.
Only those costs directly related to the restructuring, and
specifically the termination costs and benefits accruing to the
affected employees, have been provided for.
Further details of the treatment of the restructuring costs are
disclosed in note 6.
Assumptions used to calculate the property provisions are based
on the market value of the rental charges plus any contractual
dilapidation expenses on empty properties and the Directors' best
estimates of the likely time before the relevant leases can be
reassigned or sublet, which ranges between one and nine years. The
provision in relation to the UK properties are discounted at a rate
based upon the Bank of England base rate. Those in respect of the
European operations are discounted at a rate based on Euribor.
12 Fair value measurements recognised in the consolidated
balance sheet
Financial instruments which are recognised at fair value
subsequent to initial recognition are grouped into Levels 1 to 3
based on the degree to which the fair value is observable. The
three levels are defined as follows:
1. Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
2. Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
3. Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
At 30 June 2014 the Group had a current asset investment, which
was measured at Level 2 fair value subsequent to initial
recognition, to the value of GBPnil million (30 June 2013: GBP10.0
million and 31 December 2013: GBPnil).
At 30 June 2014 the Group had forward currency contracts, which
were measured at Level 2 fair value subsequent to initial
recognition, to the value of a net liability of GBP536,000 (30 June
2013: GBP465,000, 31 December 2013: GBP2,360,000).
The realised gains from forward currency contracts in the period
to 30 June 2014 of GBP1,824,000 (30 June 2013: GBP89,000 gain, 31
December 2013: GBP1,806,000 loss), are offset by broadly equivalent
realised losses/gains on the related underlying transactions.
The foreign currency forward contracts are measured based on
observable spot exchange rates, the yield
curves of the respective currencies as well as the currency
basis spreads between the respective currencies. All
contracts are fully cash collateralised, thereby eliminating
both counterparty and the Group's own credit risk.
The carrying value of the Group's short-term receivables and
payables is a reasonable approximation of their fair values. The
fair value of all other financial instruments carried within the
Group's financial statements is not materially different from their
carrying amount.
13 Analysis of net funds
Unaudited Unaudited Audited
H1 2014 H1 2013 Year 2013
GBP'000 GBP'000 GBP'000
Cash and short term deposits 70,982 76,336 91,098
Bank overdraft (1,418) (4,087) (764)
------------ -------------- ------------
Cash and cash equivalents 69,564 72,249 90,334
Current asset investment - 10,000 -
Bank loans (146) (107) (63)
------------ -------------- ------------
Net funds excluding CSF 69,418 82,142 90,271
Finance leases (8,134) (16,329) (11,577)
Other loans (7,266) (53) (7,280)
Total CSF (15,400) (16,382) (18,857)
------------ -------------- ------------
Net funds 54,018 65,760 71,414
============ ============== ============
14 Publication of non-statutory accounts
The financial information contained in the interim statement
does not constitute statutory accounts as defined in section 435 of
the Companies Act 2006. The auditors have issued an unqualified
opinion on the Group's statutory financial statements under
International Accounting Standards for the year ended 31 December
2013 and did not include a statement under section 498(2) or (3) of
the Companies Act 2006. Those accounts have been delivered to the
Registrar of Companies.
Appendix
Revenue growth summary by segment for H1 2014 vs H1 2013
Change vs H1 2013 H1 Change H1 Change
As Reported Constant
Currency
---------------------- ------------- ----------
Supply Chain Revenue
UK 17.6% 17.6%
Germany (18.3%) (15.4%)
France 13.3% 17.4%
Group 1.7% 3.9%
---------------------- ------------- ----------
Services Revenue
UK 8.2% 8.2%
Germany (1.8%) 1.7%
France 1.2% 4.8%
Group 3.3% 5.3%
---------------------- ------------- ----------
Total Revenue
UK 14.1% 14.1%
Germany (12.7%) (9.6%)
France 11.1% 15.1%
Group 2.2% 4.3%
---------------------- ------------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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