TIDMCCC
RNS Number : 1957I
Computacenter PLC
26 August 2016
Computacenter plc
Interim results for the six months ended 30 June 2016
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 2016.
Financial Highlights
H1 2016 H1 2015 Change
(per cent)
Financial Performance
Adjusted revenue(1) (GBP million) 1,478.2 1,438.0 2.8
Adjusted profit before tax(1)
(GBP million) 25.3 29.1 (13.1)
Adjusted diluted earnings per
share(1) (pence) 15.3 17.0 (10.0)
Dividend per share (pence) 7.2 6.4 12.5
Statutory revenue (GBP million) 1,478.2 1,441.2 2.6
Statutory profit before tax (GBP 23.6 70.7 (66.6)
million)
Statutory diluted earnings per
share (pence) 13.2 48.8 (73.0)
Cash Position
Net funds(3) (GBP million) 96.6 44.9 115.1
Revenue Performance by Sector
Adjusted Services revenue(1) (GBP
million) 498.0 489.2 1.8
Adjusted Supply Chain revenue(1)
(GBP million) 980.2 948.8 3.3
Reconciliation between Adjusted and Statutory
Performance
Adjusted profit before tax(1)
(GBP million) 25.3 29.1
Exceptional and other adjusting
items:
Line of business restructuring
and other increases in estimated
costs of redundancy in French
business (GBP million) (1.1) (0.4)
Release of provision for onerous
German contracts (GBP million) - 0.4
Exceptional gain recorded on
disposal of R.D. Trading Limited
("RDC") (GBP million) - 42.2
Pre-disposal earnings of RDC
in the year (GBP million) - 0.3
Amortisation of acquired intangibles
(GBP million) (0.6) (0.9)
Statutory profit before tax (GBP
million) 23.6 70.7
Highlights:
-- Group's first half performance marginally ahead of
Management's expectations for the period as set at the time of our
Q1 Trading Update in April 2016;
-- Challenging first half for the UK business, principally due
to a reduction in Services volumes driving a decline in Services
margins and lower hardware margins;
-- Strong revenue growth across the German business, continuing
the momentum generated in the second half of 2015; and
-- Profit performance from the French business significantly
ahead of Management's expectations, driven by improvement in Supply
Chain and Services margins.
Mike Norris, Chief Executive of Computacenter plc,
commented:
The first half of 2016 finished slightly better than we had
anticipated at the time of our Q1 Trading Update in April 2016,
mainly due to the better performance of Computacenter in France.
Despite the challenging market conditions in the UK referred to in
our Q1 2016 Trading Update, as well as planned investments, the
Board expects the full year to show modest progress in our adjusted
profit before tax(1) , as compared to 2015 after allowing for the
GBP3 million benefit from the one-off gain realised in the
comparative period.
The pipeline of Managed Services growth in the Group as a whole
is encouraging and should deliver growth in 2017. Even more
noticeable is the growing pipeline for Digital Workplace projects
which we are looking to close in the second half of 2016, as
customers look to take advantage of new operating systems.
Particularly pleasing is the likely growth in major customers, one
of our strategic key performance indicators.
We also remain confident that Computacenter will finish the year
with record levels of net funds(3) .
(1) Adjusted revenue, adjusted Services revenue, adjusted
Professional Services revenue, adjusted Supply Chain revenue, and
adjusted administrative expenses excludes the revenue and
administrative expenses from a disposed subsidiary, R.D. Trading
Ltd (RDC), for the comparative reporting periods. RDC was sold on 2
February 2015. Adjusted operating profit or loss, adjusted profit
or loss before tax, adjusted profit or loss for the year, adjusted
earnings per share and adjusted diluted earnings per share are, as
appropriate, each stated before: exceptional and other adjusting
items including gain or loss on business disposals, amortisation of
acquired intangibles, utilisation of deferred tax assets (where
initial recognition was as an exceptional item or a fair value
adjustment on acquisition), and the related tax effect of these
exceptional and other adjusting items, as Management do not
consider these items when reviewing the underlying performance of
the segment or the Group as a whole. Each of these measures also
excludes the results of RDC for the comparative periods.
Additionally, adjusted operating profit or loss includes the
interest paid on customer-specific financing (CSF) which Management
considers to be a cost of sale. A reconciliation between key
adjusted and statutory measures is provided within the Group
Finance Director's review included within this announcement.
Further detail is provided within note 5 to the summary financial
information included within this announcement.
(2) The performance of the Group and its overseas segments are
shown, where indicated, in constant currency. The constant currency
presentation, which is a non-GAAP measure, excludes the impact of
fluctuations in foreign currency exchange rates. We believe
providing constant currency information gives valuable supplemental
detail regarding our results of operations, consistent with how we
evaluate our performance. We calculate constant currency
percentages by converting our prior-year local currency financial
results using the current year average exchange rates and comparing
these recalculated amounts to our current year results or by
presenting the results in the equivalent local currency amounts.
Wherever the performance of the Group, or its overseas segments,
are presented in constant currency, the equivalent prior-year
measure is also presented in actual currency using the exchange
rates prevailing at the time. Financial Highlights, as shown at the
beginning of this announcement, and statutory measures, are
provided in actual currency.
(3) Net funds includes cash and cash equivalents, CSF, other
short or other long-term borrowings and current asset
investments.
Enquiries:
Computacenter plc:
Mike Norris, Chief Executive 01707 631601
Tony Conophy, Finance Director 01707 631515
Tulchan Communications:
James Macey White 0207 353 4200
Matt Low
DISCLAIMER - FORWARD LOOKING STATEMENTS
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "anticipates", "believes",
"estimates", "expects", "intends", "may", "plans", "projects",
"should" or "will", or, in each case, their negative or other
variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
announcement and include, but are not limited to, statements
regarding the Groups' intentions, beliefs or current expectations
concerning, amongst other things, results of operations, prospects,
growth, strategies and expectations of its respective
businesses.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements are not guarantees of future performance
and the actual results of the Groups' operations and the
development of the markets and the industry in which they operate
or are likely to operate and their respective operations may differ
materially from those described in, or suggested by, the
forward-looking statements contained in this announcement. In
addition, even if the results of operations and the development of
the markets and the industry in which the Group operates are
consistent with the forward-looking statements contained in this
announcement, those results or developments may not be indicative
of results or developments in subsequent periods. A number of
factors could cause results and developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation, those risks in the risk factor
section of the 2015 Computacenter Annual Report & Accounts, as
well as general economic and business conditions, industry trends,
competition, changes in regulation, currency fluctuations or
advancements in research and development.
Forward-looking statements speak only as of the date of this
announcement and may, and often do, differ materially from actual
results. Any forward-looking statements in this announcement
reflect the Groups' current view with respect to future events and
are subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Groups' operations,
results of operations and growth strategy.
Neither Computacenter plc nor any of its subsidiaries undertakes
any obligation to update the forward-looking statements to reflect
actual results or any change in events, conditions or assumptions
or other factors unless otherwise required by applicable law or
regulation.
LETTER FROM THE CHAIRMAN
INTERESTING TIMES
At a Group level, we have had a result in the first half of the
year which was marginally ahead of our expectations as set at the
time of our Q1 Trading Update in April 2016. There is much more to
be done in the second half. We have had a significant Managed
Services win in France as we strive to build our Services business
there and we are pleased with our results, our German business has
grown well in the first half and our UK business has been
disappointing.
120 years ago Joseph Chamberlain said "I think you will agree
that we are living in most interesting times. I never remember
myself a time in which our history was so full, in which day by day
brought us new objects of interest and, let me say also, new
objects for anxiety." At about the same time, the head of the US
Patent Office said that "everything which can be invented has been
invented."
I quote these because of the recent result of the UK referendum
on its EU membership, and the question many of you will be asking
which is 'what does it mean for Computacenter?' Simply put, we are
changing very little in what we do and expect for our business. We
are represented in our core countries of the UK, Germany, France,
Belgium and Switzerland by our own people, and we will continue to
support our customers in their countries and develop our business
there.
We will not waver from focusing on our customers and our quality
of service to them. Outside of customer-specific finance leases, we
have no external debt. We will benefit from a weaker pound, but
that is not significant for our future. Of greater significance is
winning contracts such as that from a French, truly global,
manufacturer, won during the period after a two-year effort to
understand the customer and its requirements, and address our team
and our offerings to deliver service in many countries which
enhances their competitiveness.
I take this opportunity to thank our apprentices around the
Group, who now number more than 200. We have high hopes for them,
and they represent an investment in their future by our company and
themselves.
Nothing we do is good enough for us. We take nothing for
granted, but we face the future with confidence in these
interesting times.
Greg Lock
Chairman
26 August 2016
PERFORMANCE REVIEW
GROUP
FINANCIAL PERFORMANCE
The Group's adjusted revenues(1) decreased by 0.6 per cent in
constant currency(2) to GBP1,478.2 million, and increased by 2.8
per cent in actual currency(2) (H1 2015: GBP1,438.0 million).
The Group's adjusted profit before tax(1) has decreased by 13.9
per cent in constant currency(2) to GBP25.3 million, and by 13.1
per cent in actual currency(2) (H1 2015: GBP29.1 million). This
profit performance is marginally ahead of Management's expectations
for the period as set at the time of our Q1 Trading Update in April
2016, with the comparative performance in H1 2015 benefitting from
a one-off gain of approximately GBP3 million, which as we explained
in our 2015 Interim Results, was not expected to repeat in future
years. It should be noted that at a country level, a somewhat
disappointing result in the UK was offset by a stronger than
expected performance across the rest of the Group, particularly in
France.
Due to the decrease in the Group's overall profitability,
adjusted diluted earnings per share(1) decreased by 10.0 per cent
to 15.3 pence (H1 2015: 17.0 pence) in the first half of 2016.
The Group made a statutory profit before tax of GBP23.6 million,
a decrease of 66.6 per cent in actual currency(2) (H1 2015: GBP70.7
million), with the comparative performance in H1 2015 significantly
enhanced by the disposal of the Group's subsidiary, RDC, in
February 2015. The Group's statutory diluted earnings per share
decreased by 73.0 per cent to 13.2 pence for the period (H1 2015:
48.8 pence).
In the first half of 2016, the Group reported a net cost of
GBP1.7 million from exceptional and other adjusting items, with the
exceptional cost of restructuring activity in our French business
during the period totalling GBP1.1 million.
SERVICES PERFORMANCE
The Group's adjusted Services revenue(1) decreased by 1.2 per
cent on a constant currency(2) basis to GBP498.0 million, and
increased by 1.8 per cent in actual currency(2) (H1 2015: GBP489.2
million).
As expected, Services revenue in the UK has declined in the
first half of 2016, primarily due to the expiry of a large contract
at the end of the first quarter of 2015, and the large volume of
business take-on Professional Services activity in H1 2015 creating
a challenging comparison. These lower levels of activity have
created utilisation challenges, and resulted in a lower contractor
mix in Professional Services delivery during the period. Alongside
the completion of a significant number of Managed Services
renewals, these factors have created a downward pressure on
Services margins in the UK business.
Following a breakthrough year in 2015 for its Services growth
rate, the German Services business continued to deliver strong
top-line growth, although more a result of ongoing demand for its
Professional Services offerings rather than Managed Services
growth. It was expected that German Services margins would be
weaker in the period, principally due to the fact that the majority
of these new Managed Services contracts were in lower-margin
on-boarding processes during that time. Whilst a small number of
isolated issues within our Managed Services business have diluted
margins further during H1 2016, these are temporary in nature and
therefore we expect Managed Services margins in Germany to improve
over the remainder of 2016.
Our French Services business saw an overall Services revenue
decline, principally driven by a significant reduction in
Professional Services revenue, and it is clear that much work
remains to be done in this area. However, from a revenue
perspective, the French Managed Services business has stabilised,
following investment in its pre-sales capability. We are delighted
to have signed an international End User Service Desk Managed
Services contract, with a new customer headquartered in France, as
we look to build a solid portfolio of contracts with this
profile.
SUPPLY CHAIN PERFORMANCE
The Group's adjusted Supply Chain revenue(1) decreased by 0.2
per cent on a constant currency(2) basis to GBP980.2 million, and
increased by 3.3 per cent in actual currency(2) (H1 2015: GBP948.8
million).
The UK Supply Chain performance in the UK was below Management's
expectations, with a number of large customers delaying procurement
decisions. It is difficult to assess at this early stage to what
extent this was impacted by uncertainty created by the UK
referendum on its EU membership held during the period, or around
technology choice. However, as we have previously stated, our
Supply Chain business remains subject to the short and medium-term
buying decisions of our customers, and any external factors which
prohibit or delay these decisions will clearly have an impact on
this area of our business. Following its exceptional levels of
revenue growth in 2015, the German Supply Chain business has
consolidated this and delivered high single-figure revenue growth
during the period. Margin generation has been assisted by the fact
that this growth has come almost exclusively from within the
Datacenter line of business. French Supply Chain revenues continued
to reduce, as expected, as the business continued to exit
mid-market and other low-margin generating business, in order to
focus on its core customers. It should be noted that Supply Chain
margins in France have increased materially against those generated
in H1 2015, again assisted by increased volumes of
Datacenter-related sales and an overall improvement in the quality
of its customer base.
DIVID
We are pleased to announce an interim dividend of 7.2 pence per
share. The dividend announced is inline 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 14
October 2016. The dividend record date is set as Friday 16
September 2016, and the shares will be marked ex-dividend on
Thursday 15 September 2016.
CASH
Net funds(3) at 30 June 2016 was GBP96.6 million compared to
GBP44.9 million at 30 June 2015. The cash position remains strong
after what is historically the weaker half of the year in terms of
our working capital cycle. Net funds(3) has decreased by GBP24.2
million since 31 December 2015 with a net cash outflow from
operating activities of GBP1.1 million for the six months to 30
June 2016 (GBP1.0 million inflow for the six months to 30 June
2015). The net funds(3) positioning at the end of the half provides
a platform that will almost certainly leave us in a position of
record levels of net funds(3) by the end of the year.
The Group continues to have no material borrowings outside of
customer-specific finance leases and loans.
OUTLOOK
The first half of 2016 finished slightly better than we had
anticipated at the time of our Q1 Trading Update in April 2016,
mainly due to the better performance of Computacenter in France.
Despite the challenging market conditions in the UK referred to in
our Q1 2016 Trading Update, as well as planned investments, the
Board expects the full year to show modest progress in our adjusted
profit before tax(1) , as compared to 2015 after allowing for the
GBP3 million benefit from the one-off gain realised in the
comparative period.
The pipeline of Managed Services growth in the Group as a whole
is encouraging and should deliver growth in 2017. Even more
noticeable is the growing pipeline for Digital Work place projects
which we are looking to close in the second half of 2016, as
customers look to take advantage of new operating systems.
Particularly pleasing is the likely growth in major customers, one
of our strategic key performance indicators.
We also remain confident that Computacenter will finish the year
with record levels of net funds(3) .
Mike Norris
Chief Executive Officer
26 August 2016
UNITED KINGDOM
FINANCIAL PERFORMANCE
We have previously explained that the UK business would face a
challenging year in 2016, due to incremental tactical and strategic
investment through its Income Statement against that seen in 2015,
and a quieter rate of Managed Services wins in the second half of
2015. However, notwithstanding the impact of those known factors,
its performance has been below Management's expectations for the
period.
Adjusted revenue(1) in the UK business decreased by 5.2 per cent
to GBP652.7 million (H1 2015: GBP688.7 million). Adjusted operating
profit(1) decreased by 38.9 per cent to GBP14.0 million (H1 2015:
GBP22.9 million), whilst statutory profit before tax decreased by
77.8 per cent to GBP14.5 million (H1 2015: GBP65.4 million). These
results include incremental strategic and tactical investments of
GBP1.0 million against H1 2015, which principally relate to the
ongoing development of our Services offering and the temporary
relocation of our UK London office.
SERVICES PERFORMANCE
Adjusted Services revenue(1) decreased by 7.3 per cent to
GBP244.3 million (H1 2015: GBP263.6 million). This included a
decline of 10.0 per cent in Professional Services revenue and a
decline in Managed Services revenue of 6.4 per cent.
The majority of this decline relates to two issues. The first
half of 2015 provides a tough comparison due to the exceptional
volume of Professional Services work in 2015, which has not been
repeated. Additionally, and as we have previously explained, a
significant Managed Services contract finished at the end of Q1
2015. The reduction in Services volumes has reduced utilisation of
the Group's central engines, and a consequential reduction in
contractor mix used on work completed has impacted the overall
margin performance. There is likely to be an increase in the level
of Professional Services volumes seen in the second half of the
year due to the start-up of some large deployments. In Managed
Services, there has been a significant volume of renewal activity
during the year, and the business has been successful in each of
its Managed Services renewal bids which has been awarded during the
period, although there has been a net reduction in the overall
contract base. The pipeline for new contracts is somewhat stronger
than 12 months ago, but has not yet recovered to a position where
we feel fully comfortable.
SUPPLY CHAIN PERFORMANCE
Adjusted Supply Chain revenue(1) decreased by 3.9 per cent to
GBP408.4 million (H1 2015: GBP425.1 million). The first half of the
year has been somewhat disappointing. Whilst customer retention has
been strong, business uncertainty has caused a number of our large
customers to delay procurement decisions. We are beginning to see
significant volumes of Digital Workplace replacements, particularly
driven by Windows 10, which should assist revenue growth, both in
the second half of the year and more significantly in 2017.
SG&A
UK SG&A has reduced by 3.6 per cent compared to the first
half of 2015. It should be noted that, although UK SG&A remains
under sharp focus, this comparison is assisted by a lower level
percentage pay-out of bonus payments during the period. UK SG&A
will remain a Management focus for the remainder of the year and
into 2017, when we anticipate that it will fall as the requirement
for tactical spend reduces.
Kevin James
Managing Director, UK
26 August 2016
GERMANY
FINANCIAL PERFORMANCE
Computacenter in Germany has shown good top-line growth across
the business, which has been underpinned by its significant number
of Managed Services wins in 2015, and ongoing strong demand for its
Professional Services offering.
Total revenue increased by 6.6 per cent on a constant
currency(2) basis to EUR779.8 million (H1 2015: EUR731.3 million),
and by 13.5 per cent in actual currency(2) . Adjusted operating
profit(1) for the German business, increased by 5.2 per cent on a
constant currency(2) basis to EUR12.2 million (H1 2015: EUR11.6
million), and by 11.8 per cent in actual currency(2) . Statutory
profit before tax increased by 9.6 per cent in constant currency(2)
to EUR11.4 million (H1 2015: EUR10.4 million), and by 17.1 per cent
in actual currency(2) .
SERVICES PERFORMANCE
Services revenue grew by 7.4 per cent in constant currency(2) to
EUR272.5 million (H1 2015: EUR253.7 million), and increased by 14.4
per cent in actual currency(2) . This included Professional
Services growth of 15.9 per cent in constant currency(2) (23.1 per
cent on an actual currency(2) basis) and Managed Services growth of
4.2 per cent in constant currency(2) (11.0 per cent on an actual
currency(2) basis).
Services revenue growth has been assisted by our Managed
Services wins in the second half of 2015. However, a significant
number of these have been at the on-boarding stage during the
period, and the business take-on work associated with this has
negatively impacted margins in the first half. This margin dilution
is, for the most part, in line with Management's expectations, and
it is expected that these margins will improve during the second
half of 2016. We have seen a steady performance from the business
on those Managed Services contracts in place prior to the start of
the period.
In addition to the take-on of a significant number of new
Services contracts, much of our bidding activity has been focused
on consolidating our existing business through renewals. Out of
five significant Managed Services renewal processes due to take
place in 2016, we can confirm that we have already extended three
of these for a minimum five-year period, and we remain
competitively well-positioned in respect of the remaining two bids.
We believe that the renewal of these contracts are a clear
demonstration of Computacenter's service quality, innovation and
value.
Our Professional Services business has performed strongly over
the period, particularly in Security, and margin levels remain un
impacted by revenue growth in this area. The demands of our
customers in technical areas such as Cloud, Digital Workplace and
Security are increasing. We are seeing that Windows 10 is becoming
the operating system of choice for our customers, and a critical
focus for them as they design their strategic infrastructure and
enhance the experience of their users. In the second half of 2016,
there is a pipeline to deliver some significant projects around a
new Digital Workplace environment. We are well positioned to take
advantage of demand for private and Hybrid Cloud building services,
assisted by our recent track record and significant existing
customer advocacy in this area. Additionally, in the second half of
the year, we expect to see our first involvement with Industrie
4.0, which is having a significant impact on the automotive and
manufacturing customer sectors, which are so important to
Computacenter in Germany.
SUPPLY CHAIN PERFORMANCE
Supply Chain revenue grew by 6.2 per cent in constant
currency(2) to EUR507.3 million (H1 2015: EUR477.6 million), and by
13.1 per cent in actual currency(2) . It has performed strongly,
particularly within the Datacenter area which has benefitted from
customer demand for private Cloud infrastructure and the ongoing
move towards SAP Hana. This mix of business has helped to
contribute towards healthy margin levels. Our Networking business
remained flat at a top-line level, whilst Workplace revenues fell
against a particularly difficult compare from the prior year
period.
Our Supply Chain business has benefitted from the 'pull-through'
associated with an increase in our Managed Services customer base
during the year. Early adoption of Windows 10 will support our
Workplace business, although we expect that demand for this will
most likely impact activity levels in 2017.
SG&A
The German business saw SG&A costs increase by 5.5 per cent
in constant currency(2) and by 12.3 per cent in actual currency(2)
against levels seen in H1 2015. The primary reason for the rise is
due to increasing business volumes leading directly to higher
variable remuneration and increasing pre-sales costs for the
growing Services business. In addition, an agreed 2.0 per cent year
on year salary uplift and unplanned levels of severance costs due
to certain restructuring initiatives within the German middle
management have also contributed to the increase.
Reiner Louis
Managing Director, Germany
26 August 2016
FRANCE
FINANCIAL PERFORMANCE
Total revenue decreased by 4.4 per cent on a constant
currency(2) basis to EUR247.8 million (H1 2015: EUR259.3 million),
and increased by 1.8 per cent in actual currency(2) . The adjusted
operating result(1) for the French business improved by EUR5.3
million to an adjusted operating profit(1) of EUR1.2 million in
constant currency(2) (H1 2015: adjusted operating loss(1) of EUR4.1
million), and improved by GBP3.9 million in actual currency(2) .
The statutory loss before tax decreased by 89.1 per cent in
constant currency(2) to EUR0.5 million (H1 2015: EUR4.6 million),
and by 90.9 per cent in actual currency(2) .
SERVICES PERFORMANCE
Services revenue decreased by 3.9 per cent on a constant
currency(2) basis to EUR41.8 million (H1 2015: EUR43.5 million),
and increased by 2.2 per cent in actual currency(2) . Our Managed
Services business saw revenues decline by 1.9 per cent in constant
currency(2) , and an increase of 4.3 per cent on an actual
currency(2) basis. We have made material investments in our local
pre-sales capability to drive the growth of our Managed Services
business, in line with the Group's strategy. Supported by
specialised resources from the Group, we have been driving multiple
Managed Services bid campaigns in the first half of the year. We
are delighted to have recently signed an international End User
Service Desk Managed Services contract supporting over 65,000 users
worldwide, and expect this contract to make a positive margin
contribution from 2017 onwards. In addition, we are in the final
phase of some large Managed Services bid campaigns, and provided we
can renew some important existing contracts in the second half of
2016, we should materially
increase our Managed Services contract base value and
contribution in 2017.
The performance of our Professional Services business remains
disappointing, with a top-line revenue decline of 9.6 per cent in
constant currency(2) against the first half of last year, a decline
of 3.6 per cent on an actual currency(2) basis. The Social Plan in
2014 significantly reduced our operating and SG&A cost base in
this area, as part of our strategic focus on large private, public
and international customers, and we are still adopting revised
Management processes, both across pre-sales and implementation
requirements. In the second half of 2016, we expect to implement a
number of important initiatives to address these requirements, and
to align our Solutions portfolio better with the Group offering and
best practice.
SUPPLY CHAIN PERFORMANCE
Supply Chain revenue decreased by 4.5 per cent in constant
currency(2) to EUR206.0 million (H1 2015: EUR215.7 million), and
increased by 1.7 per cent in actual currency(2) .
Whilst revenues have not increased, we are pleased with the
improved margin contribution, as we have continued our focus on
removing low- margin, complex to administer, Supply Chain business.
After sustained investment in our internal Supply Chain processes
and infrastructure, we believe that we have now stabilised our
Supply Chain business. The result has been an improved level of
customer satisfaction and a reduction in working capital
requirements in France. Although much work remains to be done,
especially in our Private Sector customer segment, we have improved
our product business mix through winning more high-margin
Datacenter and Networking solutions. The above mentioned alignment
of our Solutions portfolio to the Group's offering should also help
to continue this business mix improvement in the second half.
SG&A
Levels of SG&A within the French business have increased by
10.8 per cent in constant currency(2) against the first half of
2015, largely driven as a result of the materially improving
performance of the business leading to increases within variable
bonus, commission and 'interressment' costs. Further, the business
absorbed EUR0.8 million of restructuring costs within SG&A in
addition to those restructuring costs reported separately as
exceptional. Whilst the implementation of the Social Plan in 2014
has already delivered significant cost reductions in affected areas
of the business prior to the period, we expect levels of SG&A
to be stable moving forward.
Lieven Bergmans
Managing Director, France
26 August 2016
BELGIUM
FINANCIAL PERFORMANCE
Total revenue decreased by 4.5 per cent on a constant
currency(2) basis to EUR31.5 million (H1 2015: EUR33.0 million),
and increased by 1.7 per cent on an actual currency(2) basis. The
adjusted operating profit(1) for the Belgian business decreased by
42.9 per cent on a constant currency(2) basis to EUR0.8 million (H1
2015: EUR1.4 million), and by 40.0 per cent on an actual
currency(2) basis. Statutory profit before tax decreased by 46.2
per cent in constant currency(2) to EUR0.7 million (H1 2015: EUR1.3
million), and decreased by 50.0 per cent in actual currency(2)
.
SERVICES PERFORMANCE
Services revenue increased by 0.9 per cent during the period in
constant currency(2) to EUR11.1 million (H1 2015: EUR11.0 million),
and increased by 8.7 per cent on an actual currency(2) basis.
We have benefitted from the implementation of both the Group ERP
system and the Group Operating Model, which has enabled the
transfer of best practice and sharing of Group capability which
improved our competitive positioning and have been selected as
preferred bidder on a significant Managed Services contract. In
addition, we are starting to see opportunities in the Digital
Workplace using Windows 10 which will generate demand in H2 2016
and beyond.
SUPPLY CHAIN PERFORMANCE
Supply Chain revenue decreased by 7.3 per cent in constant
currency(2) to EUR20.4 million (H1 2015: EUR22.0 million), and
decreased by 1.9 per cent in actual currency(2) .
SG&A
SG&A increased by 48.1 per cent on a constant currency(2)
basis to EUR4.0 million (H1 2015: EUR2.7 million), and by 55.0 per
cent on an actual currency(2) basis. As a result of the rollout of
the Group Operating Model and the implementation of the Group ERP
system, certain cost elements that were previously recognised
within gross profit, are now recognised within SG&A. Whilst
there is no impact on adjusted operating profit(1) , the H1 2016
SG&A now includes these cost elements, and the SG&A
comparison against H1 2015 is therefore not on a like- for-like
basis.
Jurgen Strijkers
Managing Director, Belgium
26 August 2016
GROUP FINANCE DIRECTOR's REVIEW
MAXIMISING SHAREHOLDER VALUE
REVENUE
Adjusted revenue(1) for the Group has increased by GBP40.2
million or 2.8 per cent over the period to GBP1,478.2 million as
measured in actual currency(2) . The revenue result has been
assisted by the decline in Sterling over the period with a decrease
of 0.6 per cent when measured in constant currency(2) .
Statutory revenue for the Group, including the results of RDC
for January 2015 within the comparative results, increased by
GBP36.8 million or 2.6 per cent from GBP1,441.4 million.
OPERATING PROFIT
Adjusted operating profit(1) for the Group has decreased by 15.3
per cent to GBP25.0 million (H1 2015: GBP29.5 million) primarily
due to lower adjusted operating profit(1) in the UK segment.
The Group's statutory operating profit of GBP23.4 million for
the period to 30 June 2016 is 19.6 per cent lower than the
comparative period (H1 2015: GBP29.1 million).
EXCEPTIONAL AND OTHER ADJUSTING ITEMS
A net loss of GBP1.7 million resulting from exceptional and
other adjusted items was recorded (2015: net gain of GBP41.6
million).
During the current period a Line of Business restructure has
been agreed with the business in France. This initiative to reduce
the underutilised resources within our Professional Services arm
will complete in H2 2016, the full cost of GBP1.0 million has been
recognised as at 30 June 2016. This restructure will see France
exit the direct provision of Group Field Maintenance Services. This
Line of Business has materially decreased over time, leading to a
significant resourcing overcapacity. Any future residual customer
requirement will be sub-contracted to an existing third party
provider.
Further provisioning to the existing Social Plan in France of
GBP0.1 million (H1 2015: GBP0.4 million) was also required during
the period ended 30 June 2016.
The principal item in the period to 30 June 2015 was the gain on
the disposal of R.D. Trading Limited ('RDC'), a Group's subsidiary,
of GBP42.2 million. The disposal occurred on 2 February 2015 with
cash proceeds, net of disposal costs and cash disposed of GBP56.0
million.
PROFIT BEFORE TAX
Adjusted profit before tax(1) decreased by 13.1 per cent to
GBP25.3 million at actual currency(2) (H1 2015: GBP29.1 million), a
decrease of 13.9 per cent in constant currency(2) .
The statutory profit before tax decreased by GBP47.1 million to
GBP23.6 million (H1 2015: GBP70.7 million), primarily due to the
gain of GBP42.2 million generated on the disposal of RDC in the
prior period.
RECONCILIATION FROM STATUTORY TO ADJUSTED(1) MEASURES H1
2016
Adjustments
================================ =========== =============================================== ===========
Utilisation
Statutory CSF of deferred Exceptionals Adjusted
results RDC interest tax & others results
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ =========== -------- --------- ------------ ------------ ===========
Revenue 1,478,219 - - - - 1,478,219
================================ =========== ======== ========= ============ ============ ===========
Cost of sales (1,288,844) - (111) - - (1,288,955)
================================ =========== ======== ========= ============ ============ ===========
Gross profit 189,375 - (111) - - 189,264
================================ =========== ======== ========= ============ ============ ===========
Administrative expenses (164,228) - - - - (164,228)
================================ =========== ======== ========= ============ ============ ===========
Operating profit:
================================ =========== =============================================== ===========
Before amortisation of acquired
intangibles and exceptional
items 25,147 - (111) - - 25,036
================================ =========== ======== ========= ============ ============ ===========
Amortisation of acquired
intangibles (601) - - - 601 -
================================ =========== ======== ========= ============ ============ ===========
Exceptional items (1,114) - - - 1,114 -
================================ =========== ======== ========= ============ ============ ===========
Operating profit 23,432 - (111) - 1,715 25,036
================================ =========== ======== ========= ============ ============ ===========
Exceptional gain on disposal - - - - - -
of a subsidiary
================================ =========== ======== ========= ============ ============ ===========
Finance revenue 689 - - - - 689
================================ =========== ======== ========= ============ ============ ===========
Finance costs (551) - 111 - - (440)
================================ =========== ======== ========= ============ ============ ===========
Profit before tax 23,570 - - - 1,715 25,285
================================ =========== ======== ========= ============ ============ ===========
Income tax expense:
================================ =========== =============================================== ===========
Before exceptional items (7,509) - - 892 (114) (6,731)
================================ =========== ======== ========= ============ ============ ===========
Exceptional items - - - - - -
================================ =========== ======== ========= ============ ============ ===========
Profit for the period 16,061 - - 892 1,601 18,554
================================ =========== ======== ========= ============ ============ ===========
RECONCILIATION FROM STATUTORY TO ADJUSTED(1) MEASURES H1
2015
Adjustments
================================ =========== =============================================== ===========
Utilisation
Statutory CSF of deferred Exceptionals Adjusted
results RDC interest tax & others results
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ =========== ======== ========= ============ ============ ===========
Revenue 1,441,404 (3,447) - - - 1,437,957
================================ =========== ======== ========= ============ ============ ===========
Cost of sales (1,255,033) 2,774 (180) - - (1,252,439)
================================ =========== ======== ========= ============ ============ ===========
Gross profit 186,371 (673) (180) - - 185,518
================================ =========== ======== ========= ============ ============ ===========
Administrative expenses (156,383) 354 - - - (156,029)
================================ =========== ======== ========= ============ ============ ===========
Operating profit:
================================ =========== =============================================== ===========
Before amortisation of acquired
intangibles and exceptional
items 29,988 (319) (180) - - 29,489
================================ =========== ======== ========= ============ ============ ===========
Amortisation of acquired
intangibles (851) - - - 851 -
================================ =========== ======== ========= ============ ============ ===========
Exceptional items (13) - - - 13 -
================================ =========== ======== ========= ============ ============ ===========
Operating profit 29,124 (319) (180) - 864 29,489
================================ =========== ======== ========= ============ ============ ===========
Exceptional gain on disposal
of a subsidiary 42,155 - - - (42,155) -
================================ =========== ======== ========= ============ ============ ===========
Finance revenue 621 (1) - - - 620
================================ =========== ======== ========= ============ ============ ===========
Finance costs (1,223) - 180 - - (1,043)
================================ =========== ======== ========= ============ ============ ===========
Profit before tax 70,677 (320) - - (41,291) 29,066
================================ =========== ======== ========= ============ ============ ===========
Income tax expense:
================================ =========== =============================================== ===========
Before exceptional items (8,883) 71 - 1,387 (113) (7,538)
================================ =========== ======== ========= ============ ============ ===========
Exceptional items (52) - - - 52 -
================================ =========== ======== ========= ============ ============ ===========
Profit for the period 61,742 (249) - 1,387 (41,352) 21,528
================================ =========== ======== ========= ============ ============ ===========
TAXATION
The adjusted tax charge(1) on ordinary activities was GBP6.7
million (H1 2015: GBP7.5 million), on an adjusted profit before
tax(1) of GBP25.3 million (H1 2015:GBP29.1 million). The adjusted
effective tax rate(1) ('ETR') was 26.6 per cent (H1 2015: 25.9 per
cent). The H1 2016 ETR is higher than the prior year period due to
a change in the geographic split of profit before tax with reducing
losses in France being offset by an increasing German cash tax rate
and a reduction in profits in the United Kingdom, where the tax
rate is substantially lower than in the other European
countries.
The statutory tax charge was GBP7.5 million (H1 2015: GBP8.9
million) on profit before tax of GBP23.6 million (H1 2015: GBP70.7
million). This represents a statutory ETR of 31.9 per cent (H1
2015: 12.6 per cent). The gain on the disposal of RDC of GBP42.2
million recorded in the statutory profit before tax for the period
ended 30 June 2015 was not a taxable gain and is the most
significant reason for the movement in the ETR.
As the German tax losses continue to be utilised, the deferred
tax asset, previously recognised as an exceptional tax item, is no
longer replenishing and the utilisation of the asset impacts the
statutory ETR.
The table below reconciles the statutory tax charge to the
adjusted tax charge(1) for the period ended 30 June 2016.
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
=================================================== ======== =========
Statutory tax charge 7,509 8,935 23,657
============================================ ===== ======== =========
Adjustments to exclude:
============================================ ===== ===================
Utilisation of German deferred tax assets (892) (1,387) (4,045)
============================================ ===== ======== =========
Tax on amortisation of acquired intangibles 114 113 314
============================================ ===== ======== =========
Tax on exceptional items - (52) (52)
============================================ ===== ======== =========
RDC - (71) (72)
============================================ ===== ======== =========
Adjusted tax charge 6,731 7,538 19,802
============================================ ===== ======== =========
Statutory ETR 31.9% 12.6% 18.7%
============================================ ===== ======== =========
Adjusted ETR 26.6% 25.9% 22.8%
============================================ ===== ======== =========
PROFIT FOR THE PERIOD
The adjusted profit for the period(1) decreased by 13.5 per cent
to GBP18.6 million (H1 2015: GBP21.5 million). The statutory profit
after tax decreased by GBP45.6 million to GBP16.1 million (H1 2015:
GBP61.7 million).
EARNINGS PER SHARE
The adjusted diluted earnings per share(1) decreased by 10.0 per
cent to 15.3 pence per share (H1 2015: 17.0 pence per share). The
adjusted diluted earnings per share(1) for the 2015 comparative has
been restated to exclude the result of RDC which was sold on 2
February 2015.
The statutory diluted earnings per shares has decreased 73.0 per
cent to 13.2 pence per share (H1 2015: 48.8 pence per share). The
2015 comparative includes the exceptional gain on the disposal of
RDC.
H1 2016 H1 2015 Year 2015
============================================================ ======= =========
Basic weighted average number of shares (excluding
own shares held) (no. '000) 120,617 124,571 122,948
=================================================== ======= ======= =========
Effect of dilution:
=================================================== ======= ==================
Share options 879 2,014 2,655
=================================================== ======= ======= =========
Diluted weighted average number of shares 121,496 126,585 125,603
=================================================== ======= ======= =========
Statutory profit attributable to equity holders
of the parent (GBP'000) 16,059 61,742 103,110
=================================================== ======= ======= =========
Basic earnings per share (pence) 13.3 49.6 83.9
=================================================== ======= ======= =========
Diluted earnings per share (pence) 13.2 48.8 82.1
=================================================== ======= ======= =========
Adjusted profit for the year(1) attributable to
equity holders of the parent (GBP'000) 18,553 21,528 67,072
=================================================== ======= ======= =========
Adjusted basic earnings per share(1) (pence) 15.4 17.3 54.6
=================================================== ======= ======= =========
Adjusted diluted earnings per share(1) (pence) 15.3 17.0 53.4
=================================================== ======= ======= =========
NET FUNDS(3)
Net funds(3) have decreased from GBP120.8 million at the end of
2015 to GBP96.6 million as at 30 June 2016. In addition to the
second interim 2015 dividend (paid in April 2016) of GBP18.1
million, the Group has generated a relatively flat operating cash
flow performance with an outflow of GBP1.1 million for the period
to 30 June 2016 (H1 2015: GBP1 million inflow).
The Group net funds(3) position takes account of current asset
investments of GBP35 million, an increase of GBP20 million since 31
December 2015 (H1 2015: nil).
The Group had no material borrowings outside of
customer-specific finance leases and loans
CURRENCY
The Group reports its results in Pound Sterling. The weakening
of Sterling, particularly against the Euro, is expected to continue
to be a foreign exchange translation benefit to the Group. If the
30 June 2016 spot rates were to continue through the remainder of
2016, the impact of restating 2015 at 2016 exchange rates would be
an increase of approximately GBP122 million in 2015 adjusted
revenue(1) and an increase of approximately GBP2 million in 2015
adjusted profit before tax(1) .
BREXIT CONSIDERATIONS
After the vote on 23 June 2016, the Management and the Board
have considered the implications of the vote to leave the European
Union on both the short and medium prospects of the Group.
Outside of two principal areas where Brexit could affect the
Group, including weakness within the UK economy driving down short
term demand for the Group's products and services, the potential
impact of which is too early to foresee at this stage, and the
impact of the change in foreign currency exchange rates, which has
been modelled on the 2015 results and disclosed above, the Group
does not see any major impact on its day to day business
activities. Clearly, we cannot comment on the likely impact when
the United Kingdom leaves the European Union, as the terms and
conditions have not yet been negotiated.
Due to the positive net funds(3) of the Group, our ongoing
strong cash generation and our continued policy to return excess
cash to shareholders, we are not adversely impacted by short term
fluctuations in interest rates. Further, our lack of material
defined benefit pension schemes makes our exposure to extremely low
gilt yields negligible.
Specifically the Group sees no change to its Going Concern
assumptions, Group Operating Model or Principal Risks and
Uncertainties as a result of the vote.
In short, we believe the Group is well positioned, through its
geographic spread, balance sheet strength, and diversity of
offering, to meet the foreseeable challenges that Brexit may
present. With change usually comes opportunity for Computacenter
and we remain positively focused on the interesting times
ahead.
RISK AND UNCERTAINTIES
The Group's activities expose it to a variety of risks;
economic, financial, operational and regulatory.
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.
The principal risks and uncertainties facing the Group are set
out on pages 16 to 19 of the 2015 Annual Report and Accounts, a
copy of which is available on the Group's website.
The Group's risk management approach and the principal risks,
potential impacts and primary mitigating activities are largely
unchanged from those set out in the 2015 Annual Report and
Accounts. Two new risks have been added, the first of which is the
result of the Brexit vote as set out above. The second new risk
relates to the potential for underinvestment in our indirect costs,
particularly sales, leading to missed opportunities or poor
decisions adversely impacting revenue and gross profit. Finally,
weak Group culture is no longer considered a primary risk.
Tony Conophy
Group Finance Director
26 August 2016
DIRECTORS' RESPONSIBILITY STATEMENT
Responsibility statement of the Directors in respect of the
half-yearly financial report.
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Mike Norris Tony Conophy
Chief Executive Officer Group Finance Director
26 August 2016
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
Note GBP'000 GBP'000 GBP'000
================================================== =========== ============= ===========
Revenue 5 1,478,219 1,441,404 3,057,615
============================================== =========== ============= ===========
Cost of sales (1,288,844) (1,255,033) (2,654,468)
================================================== =========== ============= ===========
Gross profit 189,375 186,371 403,147
================================================== =========== ============= ===========
Administrative expenses (164,228) (156,383) (315,380)
================================================== =========== ============= ===========
Operating profit:
================================================== =========== ==========================
Before amortisation of acquired intangibles and
exceptional items 25,147 29,988 87,767
Amortisation of acquired intangibles (601) (851) (1,553)
================================================== =========== ============= ===========
Exceptional items 8 (1,114) (13) (1,029)
============================================== =========== ============= ===========
Operating profit 23,432 29,124 85,185
================================================== =========== ============= ===========
Exceptional gain on disposal of a subsidiary 8 - 42,155 42,155
============================================== =========== ============= ===========
Finance revenue 689 621 1,598
================================================== =========== ============= ===========
Finance costs (551) (1,223) (2,171)
================================================== =========== ============= ===========
Profit before tax 23,570 70,677 126,767
================================================== =========== ============= ===========
Income tax expense:
================================================== =========== ==========================
Before exceptional items (7,509) (8,883) (23,605)
================================================== =========== ============= ===========
Exceptional items 8 - (52) (52)
============================================== =========== ============= ===========
Income tax expense 9 (7,509) (8,935) (23,657)
============================================== =========== ============= ===========
Profit for the period 16,061 61,742 103,110
================================================== =========== ============= ===========
Attributable to:
================================================== =========== ==========================
Equity holders of the parent 16,061 61,742 103,110
================================================== =========== ============= ===========
Non-controlling interests - - -
================================================== =========== ============= ===========
Profit for the period 16,061 61,742 103,110
================================================== =========== ============= ===========
Earnings per share
================================================== =========== ==========================
- basic for profit for the period 10 13.3p 49.6p 83.9p
============================================== =========== ============= ===========
- diluted for profit for the period 10 13.2p 48.8p 82.1p
============================================== =========== ============= ===========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
===================================================== ========= ========= ==========
Profit for the period: 16,061 61,742 103,110
===================================================== ========= ========= ==========
Items that may be reclassified to consolidated
income statement
===================================================== ========= ========= ==========
Gain/(loss) arising on cash flow hedge, net of
amount transferred to consolidated income statement 728 (480) 1,191
===================================================== ========= ========= ==========
Income tax effect (143) 97 (244)
===================================================== ========= ========= ==========
585 (383) 947
===================================================== ========= ========= ==========
Exchange differences on translation of foreign
operations 21,942 (12,662) (7,783)
===================================================== ========= ========= ==========
22,527 (13,045) (6,836)
===================================================== ========= ========= ==========
Items not to be reclassified to consolidated
income statement:
===================================================== ========= =====================
Remeasurement of defined benefit plan - - 24
===================================================== ========= ========= ==========
Other comprehensive income for the period, net
of tax 22,527 (13,045) (6,812)
===================================================== ========= ========= ==========
Total comprehensive income for the period 38,588 48,697 96,298
===================================================== ========= ========= ==========
Attributable to:
===================================================== ========= =====================
Equity holders of the parent 38,581 48,697 96,299
===================================================== ========= ========= ==========
Non-controlling interests 7 (2) (1)
===================================================== ========= ========= ==========
38,588 48,695 96,298
===================================================== ========= ========= ==========
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
================================= ========= ========= ==========
Non-current assets
================================= ========= ========= ==========
Property, plant and equipment 62,983 75,000 57,132
================================= ========= ========= ==========
Investment property 10,147 - 10,260
================================= ========= ========= ==========
Intangible assets 75,816 79,032 81,533
================================= ========= ========= ==========
Investment in associate 53 38 40
================================= ========= ========= ==========
Deferred income tax asset 11,973 14,177 12,840
================================= ========= ========= ==========
160,972 168,247 161,805
================================= ========= ========= ==========
Current assets
================================= ========= =====================
Inventories 40,546 41,379 45,647
================================= ========= ========= ==========
Trade and other receivables 525,493 506,375 621,756
================================= ========= ========= ==========
Prepayments 63,516 50,640 44,735
================================= ========= ========= ==========
Accrued income 98,179 89,478 61,785
================================= ========= ========= ==========
Derivative financial instruments 4,694 1,157 2,220
================================= ========= ========= ==========
Current asset investments 35,000 - 15,000
================================= ========= ========= ==========
Cash and short-term deposits 65,884 53,619 111,770
================================= ========= ========= ==========
833,312 742,648 902,913
================================= ========= ========= ==========
Total assets 994,284 910,895 1,064,718
================================= ========= ========= ==========
Current liabilities
================================= ========= =====================
Trade and other payables 484,212 466,481 581,855
================================= ========= ========= ==========
Deferred income 105,072 95,762 93,861
================================= ========= ========= ==========
Financial liabilities 2,904 6,169 4,279
================================= ========= ========= ==========
Derivative financial instruments 1,170 1,368 922
================================= ========= ========= ==========
Income tax payable 12,275 8,188 10,981
================================= ========= ========= ==========
Provisions 4,038 6,264 4,050
================================= ========= ========= ==========
609,671 584,232 695,948
================================= ========= ========= ==========
Non-current liabilities
================================= ========= =====================
Financial liabilities 1,339 2,564 1,703
================================= ========= ========= ==========
Provisions 4,999 3,380 5,094
================================= ========= ========= ==========
Deferred income tax liabilities 446 696 523
================================= ========= ========= ==========
6,784 6,640 7,320
================================= ========= ========= ==========
Total liabilities 616,455 590,872 703,268
================================= ========= ========= ==========
Net assets 377,829 320,023 361,450
================================= ========= ========= ==========
Capital and reserves
================================= ========= =====================
Issued capital 9,299 9,297 9,297
================================= ========= ========= ==========
Share premium 3,913 3,830 3,830
================================= ========= ========= ==========
Capital redemption reserve 74,957 74,957 74,957
================================= ========= ========= ==========
Own shares held (11,025) (10,260) (10,571)
================================= ========= ========= ==========
Translation and hedging reserves 11,359 (16,988) (11,161)
================================= ========= ========= ==========
Retained earnings 289,307 259,176 295,086
================================= ========= ========= ==========
Shareholders' equity 377,810 320,012 361,438
================================= ========= ========= ==========
Non-controlling interests 19 11 12
================================= ========= ========= ==========
Total equity 377,829 320,023 361,450
================================= ========= ========= ==========
Approved by the Board on 26 August 2016
MJ Norris FA Conophy
Chief Executive Officer Group Finance Director
Consolidated statement of changes in equity
For the six months ended 30 June 2016
Attributable to equity holders of the parent
============== ================================================================= ======== =========== ============
Capital Own Translation Non-
Issued Share redemption shares & hedging Retained controlling Total
capital premium reserve held reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
At 1 January
2015 9,283 4,597 74,957 (10,760) (4,326) 311,648 385,399 13 385,412
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Profit for the
period - - - - - 61,742 61,742 - 61,742
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Other
comprehensive
income - - - - (12,662) (383) (13,045) (2) (13,047)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Total
comprehensive
income - - - - (12,662) 61,359 48,697 (2) 48,695
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Cost of
share-based
payments - - - - - 2,033 2,033 - 2,033
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Tax on
share-based
payments - - - - - 761 761 - 761
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Exercise of
options - - - 3,874 - (2,933) 941 - 941
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Return of
Value (RoV) - - - - - (97,916) (97,916) - (97,916)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Expenses on
RoV - (753) - - - - (753) - (753)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Issues of B
shares
relating to
RoV 14 (14) - - - - - - -
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Purchase of
own shares - - - (3,374) - - (3,374) - (3,374)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Equity
dividends - - - - - (15,776) (15,776) - (15,776)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
At 30 June
2015 9,297 3,830 74,957 (10,260) (16,988) 259,176 320,012 11 320,023
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Profit for the
period - - - - - 41,368 41,368 - 41,368
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Other
comprehensive
income - - - - 5,827 407 6,234 1 6,235
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Total
comprehensive
income - - - - 5,827 41,775 47,602 1 47,603
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Cost of
share-based
payments - - - - - 2,637 2,637 - 2,637
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Tax on
share-based
payments - - - - - 898 898 - 898
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Exercise of
options - - - 6,093 - (1,702) 4,391 - 4,391
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Purchase of
own shares - - - (6,404) - - (6,404) - (6,404)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Equity
dividends - - - - - (7,698) (7,698) - (7,698)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
At 31 December
2015 9,297 3,830 74,957 (10,571) (11,161) 295,086 361,438 12 361,450
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Profit for the
period - - - - - 16,061 16,061 - 16,061
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Other
comprehensive
income - - - - 22,520 - 22,520 7 22,527
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Total
comprehensive
income - - - - 22,520 16,061 38,581 7 38,588
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Cost of
share-based
payments - - - - - 1,697 1,697 - 1,697
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Tax on
share-based
payments - - - - - (854) (854) - (854)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Exercise of
options - - - 4,613 - (4,577) 36 - 36
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Issue of
shares 2 83 - - - - 85 - 85
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Purchase of
own shares - - - (5,067) - - (5,067) - (5,067)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
Equity
dividends - - - - - (18,106) (18,106) - (18,106)
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
At 30 June
2016 9,299 3,913 74,957 (11,025) 11,359 289,307 377,810 19 377,829
============== ======= ======== ========== ========== =========== ========= ======== =========== ============
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2016
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
============================================================= ========= ========= ==========
Operating activities
============================================================= ========= =====================
Profit before tax 23,570 70,677 126,767
============================================================= ========= ========= ==========
Net finance (income)/costs (138) 601 573
============================================================= ========= ========= ==========
Depreciation of property, plant and equipment 7,009 9,425 18,885
============================================================= ========= ========= ==========
Depreciation of investment property 113 - 227
============================================================= ========= ========= ==========
Amortisation of intangible assets 6,820 6,648 13,311
============================================================= ========= ========= ==========
Share-based payments 1,697 2,033 4,670
============================================================= ========= ========= ==========
Loss on disposal of property, plant and equipment 24 147 388
============================================================= ========= ========= ==========
Loss on disposal of intangibles 114 21 9
============================================================= ========= ========= ==========
Exceptional gain from disposal of a subsidiary - (42,155) (42,155)
============================================================= ========= ========= ==========
Net cash flow from inventories 9,161 (1,568) (4,530)
============================================================= ========= ========= ==========
Net cash flow from trade and other receivables 95,803 111,834 46,023
============================================================= ========= ========= ==========
Net cash flow from trade and other payables (137,922) (146,362) (43,073)
============================================================= ========= ========= ==========
Net cash flow from provisions (957) (1,172) (8,009)
============================================================= ========= ========= ==========
Other adjustments 178 (102) (137)
============================================================= ========= ========= ==========
Cash generated from operations 5,472 10,027 112,949
============================================================= ========= ========= ==========
Income taxes paid (6,582) (9,029) (18,611)
============================================================= ========= ========= ==========
Net cash flow from operating activities (1,110) 998 94,338
============================================================= ========= ========= ==========
Investing activities
============================================================= ========= =====================
Interest received 689 621 1,598
============================================================= ========= ========= ==========
Increase in current asset investments (20,000) - (15,000)
============================================================= ========= ========= ==========
Proceeds from disposal of a subsidiary, net of cash disposed
of - 56,145 56,145
============================================================= ========= ========= ==========
Proceeds from disposal of property, plant and equipment 97 18 653
============================================================= ========= ========= ==========
Purchases of property, plant and equipment (6,531) (7,862) (13,303)
============================================================= ========= ========= ==========
Purchases of intangible assets (2,071) (2,000) (7,294)
============================================================= ========= ========= ==========
Net cash flow from investing activities (27,816) 46,922 22,799
============================================================= ========= ========= ==========
Financing activities
============================================================= ========= =====================
Interest paid (551) (1,042) (2,171)
============================================================= ========= ========= ==========
Dividends paid to equity shareholders of the parent (18,106) (15,776) (23,474)
============================================================= ========= ========= ==========
Return of Value - (97,916) (97,916)
============================================================= ========= ========= ==========
Expenses on Return of Value - (767) (753)
============================================================= ========= ========= ==========
Proceeds from share issues 121 941 5,332
============================================================= ========= ========= ==========
Purchase of own shares (5,067) (3,374) (9,778)
============================================================= ========= ========= ==========
Repayment of capital element of finance leases (1,247) (1,704) (3,223)
============================================================= ========= ========= ==========
Repayment of loans (942) (433) (1,713)
============================================================= ========= ========= ==========
New borrowings - 113 1,030
============================================================= ========= ========= ==========
Net cash flow from financing activities (25,792) (119,958) (132,666)
============================================================= ========= ========= ==========
Decrease in cash and cash equivalents (54,718) (72,038) (15,529)
============================================================= ========= ========= ==========
Effect of exchange rates on cash and cash equivalents 8,861 (4,493) (1,937)
============================================================= ========= ========= ==========
Cash and cash equivalents at the beginning of the period 111,680 129,146 129,146
============================================================= ========= ========= ==========
Cash and cash equivalents at the end of the period 65,823 52,615 111,680
============================================================= ========= ========= ==========
1 CORPORATE INFORMATION
The interim condensed consolidated financial statements of the
Group for the six months ended 30 June 2016 were authorised for
issue in accordance with a resolution of the Directors on 26 August
2016.
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 2016 have been prepared in 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 2015 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 BASIS OF PREPARATION
The accounting policies applied by the Group in these interim
condensed consolidated financial statements are the same as those
applied by the Group in its consolidated financial statements for
the year ended 31 December 2015, except for the adoption of new
standards and interpretations as of 1 January 2016, which did not
have any impact on the accounting policies, financial position or
performance of the Group, as noted below:
-- Annual Improvements to IFRSs - 2010-2012 Cycle
-- Annual Improvements to IFRSs - 2011-2013 Cycle
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
4 ADJUSTED MEASURES
The Group uses a number of non-Generally Accepted Accounting
Practice (non-GAAP) financial measures in addition to those
reported in accordance with IFRS. The Directors believe that these
non-GAAP measures, detailed below, are important when assessing the
underlying financial and operating performance of the Group.
Adjusted revenue, adjusted Services revenue, adjusted
Professional Services revenue, adjusted Supply Chain revenue, and
adjusted administrative expenses excludes the revenue and
administrative expenses from a disposed subsidiary, RDC, for the
comparative reporting periods. RDC was sold on 2 February 2015.
Adjusted operating profit or loss, adjusted profit or loss
before tax, adjusted profit or loss for the year, adjusted earnings
per share and adjusted diluted earnings per share are, as
appropriate, each stated before: exceptional and other adjusting
items including gain or loss on business disposals, amortisation of
acquired intangibles, utilisation of deferred tax assets (where
initial recognition was as an exceptional item or a fair value
adjustment on acquisition), and the related tax effect of these
exceptional and other adjusting items, as Management do not
consider these items when reviewing the underlying performance of
the segment or the Group as a whole. Each of these measures also
excludes the results of RDC for the comparative periods.
Additionally, adjusted operating profit or loss includes the
interest paid on customer-specific financing (CSF) which Management
considers to be a cost of sale.
A reconciliation between key adjusted and statutory measures is
provided on page 13 of the Group Finance Director's review. Further
detail is also provided within note 5, segment information.
5 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.
No operating segments have been aggregated to form the
reportable operating segments shown below.
Segmental performance for the periods to H1 2016, H1 2015 and
Full Year 2015 were as follows:
Six months ended 30 June 2016 (unaudited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- ------------ -------- ---------- ---------
Revenue
===================================== ========================================================
Adjusted Supply Chain revenue 408,448 395,395 160,569 15,837 980,249
===================================== ========= ============ ======== ========== =========
Adjusted Services revenue
===================================== ========================================================
Professional Services 58,194 62,943 8,063 851 130,051
===================================== ========= ============ ======== ========== =========
Managed Services 186,116 149,453 24,519 7,831 367,919
===================================== ========= ============ ======== ========== =========
Total adjusted Services revenue 244,310 212,396 32,582 8,682 497,970
===================================== ========= ============ ======== ========== =========
Total adjusted revenue 652,758 607,791 193,151 24,519 1,478,219
===================================== ========= ============ ======== ========== =========
RDC - - - - -
===================================== ========= ============ ======== ========== =========
Supply Chain revenue - - - - -
===================================== ========= ============ ======== ========== =========
Professional Services revenue - - - - -
===================================== ========= ============ ======== ========== =========
Total RDC revenue - - - - -
===================================== ========= ============ ======== ========== =========
Statutory revenue 652,758 607,791 193,151 24,519 1,478,219
===================================== ========= ============ ======== ========== =========
Results
===================================== ========================================================
Adjusted gross profit 91,080 75,219 19,259 3,706 189,264
===================================== ========= ============ ======== ========== =========
Administrative expenses (77,050) (65,703) (18,354) (3,121) (164,228)
===================================== ========= ============ ======== ========== =========
Adjusted operating profit 14,030 9,516 905 585 25,036
===================================== ========= ============ ======== ========== =========
Adjusted net interest 457 (36) (158) (14) 249
===================================== ========= ============ ======== ========== =========
Adjusted profit before tax 14,487 9,480 747 571 25,285
===================================== ========= ============ ======== ========== =========
Exceptional items:
===================================== ========================================================
- onerous contracts trading losses - - - - -
===================================== ========= ============ ======== ========== =========
- onerous contracts provision for - - - - -
future losses
===================================== ========= ============ ======== ========== =========
- exceptional gains/(losses) - - (1,114) - (1,114)
===================================== ========= ============ ======== ========== =========
Total exceptional items - - (1,114) - (1,114)
===================================== ========= ============ ======== ========== =========
Gain on disposal of a subsidiary - - - - -
===================================== ========= ============ ======== ========== =========
Amortisation of acquired intangibles - (561) - (40) (601)
===================================== ========= ============ ======== ========== =========
RDC - - - - -
===================================== ========= ============ ======== ========== =========
Statutory profit/(loss) before tax 14,487 8,919 (367) 531 23,570
===================================== ========= ============ ======== ========== =========
The reconciliation for adjusted operating profit to statutory
operating profit as disclosed in the Consolidated Income Statement
is as follows:
Six months ended 30 June 2016 (unaudited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- -------- ------------ -------- ---------- --------
Adjusted segment operating profit/(loss) 14,030 9,516 905 585 25,036
========================================= ======== ============ ======== ========== ========
Add back interest on CSF 5 106 - - 111
========================================= ======== ============ ======== ========== ========
Amortisation of acquired intangibles - (561) - (40) (601)
========================================= ======== ============ ======== ========== ========
Exceptional items - - (1,114) - (1,114)
========================================= ======== ============ ======== ========== ========
RDC - - - - -
========================================= ======== ============ ======== ========== ========
Segment operating profit/(loss) 14,035 9,061 (209) 545 23,432
========================================= ======== ============ ======== ========== ========
Other segment information
========================================= ======================================================
Share-based payments 1,375 306 16 - 1,697
========================================= ======== ============ ======== ========== ========
Six months ended 30 June 2015 (unaudited)
========================================== =======================================================
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- ------------ -------- ---------- ---------
Revenue
========================================== ======== ============ ======== ========== =========
Adjusted Supply Chain revenue 425,099 349,624 157,937 16,106 948,766
========================================== ======== ============ ======== ========== =========
Adjusted Services revenue
========================================== ======== ============ ======== ========== =========
Professional Services 64,665 51,061 8,381 752 124,859
========================================== ======== ============ ======== ========== =========
Managed Services 198,923 134,669 23,477 7,263 364,332
========================================== ======== ============ ======== ========== =========
Total adjusted Services revenue 263,588 185,730 31,858 8,015 489,191
========================================== ======== ============ ======== ========== =========
Total adjusted revenue 688,687 535,354 189,795 24,121 1,437,957
========================================== ======== ============ ======== ========== =========
RDC
========================================== ======== ============ ======== ========== =========
Supply Chain revenue 3,157 - - - 3,157
========================================== ======== ============ ======== ========== =========
Professional Services revenue 290 - - - 290
========================================== ======== ============ ======== ========== =========
Total RDC revenue 3,447 - - - 3,447
========================================== ======== ============ ======== ========== =========
Statutory revenue 692,134 535,354 189,795 24,121 1,441,404
========================================== ======== ============ ======== ========== =========
Results
========================================== ======== ============ ======== ========== =========
Adjusted gross profit 102,920 67,026 12,561 3,011 185,518
========================================== ======== ============ ======== ========== =========
Administrative expenses (80,008) (58,505) (15,554) (1,962) (156,029)
========================================== ======== ============ ======== ========== =========
Adjusted operating profit/(loss) 22,912 8,521 (2,993) 1,049 29,489
========================================== ======== ============ ======== ========== =========
Adjusted net interest 273 (738) 94 (52) (423)
========================================== ======== ============ ======== ========== =========
Adjusted profit/(loss) before tax 23,185 7,783 (2,899) 997 29,066
========================================== ======== ============ ======== ========== =========
Exceptional items:
========================================== ======== ============ ======== ========== =========
- onerous contracts trading losses - (690) - - (690)
========================================== ======== ============ ======== ========== =========
- onerous contracts provision for
future losses - 1,126 - - 1,126
========================================== ======== ============ ======== ========== =========
- exceptional gains/(losses) - - (449) - (449)
========================================== ======== ============ ======== ========== =========
Total exceptional items - 436 (449) - (13)
========================================== ======== ============ ======== ========== =========
Gain on disposal of a subsidiary 42,155 - - - 42,155
========================================== ======== ============ ======== ========== =========
Amortisation of acquired intangibles (240) (572) - (39) (851)
========================================== ======== ============ ======== ========== =========
RDC 320 - - - 320
========================================== ======== ============ ======== ========== =========
Statutory profit/(loss) before tax 65,420 7,647 (3,348) 958 70,677
========================================== ======== ============ ======== ========== =========
The reconciliation for adjusted operating profit to operating
profit, as disclosed in the Consolidated Income Statement, is as
follows:
Six months ended 30 June 2015 (unaudited)
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- --------- ------------ -------- ---------- --------
Adjusted segment operating profit/(loss) 22,912 8,521 (2,993) 1,049 29,489
========================================= ========= ============ ======== ========== ========
Add back interest on CSF 33 147 - - 180
========================================= ========= ============ ======== ========== ========
Amortisation of acquired intangibles (240) (572) - (39) (851)
========================================= ========= ============ ======== ========== ========
Exceptional items - 436 (449) - (13)
========================================= ========= ============ ======== ========== ========
RDC 319 - - - 319
========================================= ========= ============ ======== ========== ========
Segment operating profit/(loss) 23,024 8,532 (3,442) 1,010 29,124
========================================= ========= ============ ======== ========== ========
Other segment information
========================================= ========= ============ ======== ========== ========
Share-based payments 1,711 180 142 - 2,033
========================================= ========= ============ ======== ========== ========
Year ended 31 December 2015
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ------------ -------- -------- ---------
Revenue
======================================== ========= ============ ======== ======== =========
Adjusted Supply Chain revenue 875,041 820,196 335,024 33,686 2,063,947
======================================== ========= ============ ======== ======== =========
Adjusted Services revenue
======================================== ========= ============ ======== ======== =========
Adjusted Professional Services revenue 137,390 107,416 16,101 1,645 262,552
======================================== ========= ============ ======== ======== =========
Managed Services revenue 394,943 272,006 46,934 13,785 727,668
======================================== ========= ============ ======== ======== =========
Total adjusted Services revenue 532,333 379,422 63,035 15,430 990,220
======================================== ========= ============ ======== ======== =========
Total adjusted revenue 1,407,374 1,199,618 398,059 49,116 3,054,167
======================================== ========= ============ ======== ======== =========
RDC
======================================== ========= ============ ======== ======== =========
Supply Chain revenue 3,158 - - - 3,158
======================================== ========= ============ ======== ======== =========
Professional Services revenue 290 - - - 290
======================================== ========= ============ ======== ======== =========
Total RDC revenue 3,448 - - - 3,448
======================================== ========= ============ ======== ======== =========
Statutory revenue 1,410,822 1,199,618 398,059 49,116 3,057,615
======================================== ========= ============ ======== ======== =========
Results
======================================== ========= ============ ======== ======== =========
Adjusted gross profit 216,445 147,346 32,083 6,258 402,132
======================================== ========= ============ ======== ======== =========
Adjusted administrative expenses (157,110) (119,937) (33,715) (4,263) (315,025)
======================================== ========= ============ ======== ======== =========
Adjusted operating profit/(loss) 59,335 27,409 (1,632) 1,995 87,107
======================================== ========= ============ ======== ======== =========
Adjusted net interest 601 (577) (178) (79) (233)
======================================== ========= ============ ======== ======== =========
Adjusted profit/(loss) before tax 59,936 26,832 (1,810) 1,916 86,874
======================================== ========= ============ ======== ======== =========
Exceptional items:
======================================== ========= ============ ======== ======== =========
- onerous contracts trading losses - (1,123) - - (1,123)
======================================== ========= ============ ======== ======== =========
- onerous contracts provision for
future losses - 1,559 - - 1,559
======================================== ========= ============ ======== ======== =========
- exceptional losses on redundancy
and other restructuring costs - - (1,465) - (1,465)
======================================== ========= ============ ======== ======== =========
Total exceptional items - 436 (1,465) - (1,029)
======================================== ========= ============ ======== ======== =========
Exceptional gain on disposal of a
subsidiary 42,155 - - - 42,155
======================================== ========= ============ ======== ======== =========
Amortisation of acquired intangibles (361) (1,116) - (76) (1,553)
======================================== ========= ============ ======== ======== =========
RDC 320 - - - 320
======================================== ========= ============ ======== ======== =========
Statutory profit/(loss) before tax 102,050 26,152 (3,275) 1,840 126,767
======================================== ========= ============ ======== ======== =========
The reconciliation for adjusted operating profit to statutory
operating profit as disclosed in the Consolidated Income Statement
is as follows:
Year ended 31 December 2015
UK Germany France Belgium Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- ------------- -------- ---------- --------
Adjusted operating profit/(loss) 59,335 27,409 (1,632) 1,995 87,107
===================================== ========= ============= ======== ========== ========
Add back interest on CSF 56 284 - - 340
===================================== ========= ============= ======== ========== ========
Amortisation of acquired intangibles (361) (1,116) - (76) (1,553)
===================================== ========= ============= ======== ========== ========
Exceptional items - 436 (1,465) - (1,029)
===================================== ========= ============= ======== ========== ========
RDC 320 - - - 320
===================================== ========= ============= ======== ========== ========
Statutory operating profit/(loss) 59,350 27,013 (3,097) 1,919 85,185
===================================== ========= ============= ======== ========== ========
6 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.
7 DIVIDS PAID AND PROPOSED
A second interim dividend for 2015 of 15.0 pence per ordinary
share was paid on 5 April 2016. An interim dividend in respect of
2016 of 7.2 pence per ordinary share, amounting to a total dividend
of GBP8,831,370, was declared by the Directors at their meeting on
25 August 2016. The expected payment date of the dividend declared
is 14 October 2016. This interim report does not reflect this
dividend payable.
8 EXCEPTIONAL ITEMS
Unaudited Unaudited Audited
H1 2016 H1 2015 GBP'000 Year 2015
GBP'000 GBP'000
=============================================================== ================ ==========
Operating profit
====================================================== ======= ----------------------------
Redundancy and other restructuring costs (1,114) (449) (1,465)
====================================================== ======= ================ ==========
Onerous contracts - 436 436
====================================================== ======= ================ ==========
(1,114) (13) (1,029)
====================================================== ======= ================ ==========
Gain on disposal of a subsidiary - 42,155 42,155
====================================================== ======= ================ ==========
Exceptional items before taxation (1,114) 42,142 41,126
====================================================== ======= ================ ==========
Income tax
====================================================== ======= ============================
Tax on onerous contracts included in operating profit - (52) (52)
====================================================== ======= ================ ==========
Exceptional items after taxation (1,114) 42,090 41,074
====================================================== ======= ================ ==========
2016:
Included within the current period are the following exceptional
items:
-- During the current period a Line of Business restructure has
been agreed with the business in France. This initiative to reduce
the underutilised resources within our Professional Services arm
will complete in H2 2016, the full cost of GBP1.0 million has been
recognised as at 30 June 2016. This restructure will see
Computacenter France exit the direct provision of Group Field
Maintenance Services. This Line of Business has materially
decreased over time, leading to a significant resourcing
overcapacity. Any future residual customer requirement will be
sub-contracted to an existing third party provider.
-- Computacenter France is close to completing responsibilities
under the Social Plan related to the substantial restructuring
exercise that occurred in 2014. An additional cost of GBP0.1
million has been recognised as part of the wind-down of the Social
Plan. As the redundancy and restructuring costs were previously
treated as an exceptional item on recognition, this further
provision has also been treated as an exceptional item.
2015:
Included within the prior period are the following exceptional
items:
-- Computacenter (UK) Limited disposed of its wholly owned
subsidiary RDC during the year. An exceptional gain of GBP42.2
million was recognised on disposal of RDC. In line with our
accounting policy, Management elected under IAS1 to report this
gain as a separate line item on the face of the income statement
due to the materiality, infrequency and nature of the gain on
disposal of RDC. As noted within the summary of significant
accounting policies the adjusted results excluded this gain. This
election provided the best guidance to users of our external
reporting as to the underlying profitability trends within the
Group and presented the results of the Group in a way that is fair,
balanced and understandable.
-- Computacenter France continued with its substantial
restructuring exercise that began in 2014. An additional cost of
GBP0.4 million was recognised as part of the Social Plan. As the
redundancy and restructuring costs were previously treated as an
exceptional item on recognition, the further provision has also
been treated as an exceptional item.
-- The Group's remaining two onerous contracts continued to show
operational improvements therefore management revised its estimates
of the losses to be incurred. On this basis the Group released
GBP0.4 million of the provision. As the onerous contracts were
previously treated as an exceptional item on recognition, the write
back of the provision was also released as an exceptional item
9 INCOME TAX
The Group calculates the period income tax expense using the tax
rate that would be applicable to the total expected annual
earnings.
The charge based on the profit for the period comprises:
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
=========================================================== ========= ==========
Tax charged in the consolidated income statement
==================================================== ===== =====================
Current income tax
==================================================== ===== =====================
UK corporation tax 3,487 6,077 14,639
==================================================== ===== ========= ==========
Foreign tax 3,244 3,643 6,485
==================================================== ===== ========= ==========
Adjustments in respect of prior periods - - (232)
==================================================== ===== ========= ==========
Total current income tax 6,731 9,720 20,892
==================================================== ===== ========= ==========
Deferred tax
==================================================== ===== =====================
- origination and reversal of temporary differences (114) (785) (1,276)
==================================================== ===== ========= ==========
- adjustments in respect of prior years - - (276)
==================================================== ===== ========= ==========
- changes in recoverable amounts of deferred tax
assets 892 - 4,265
==================================================== ===== ========= ==========
Exceptional items - - 52
==================================================== ===== ========= ==========
Total deferred tax 778 (785) 2,765
==================================================== ===== ========= ==========
Tax charge in the consolidated income statement 7,509 8,935 23,657
==================================================== ===== ========= ==========
10 EARNINGS PER 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 period
(excluding own shares held).
To calculate diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential shares. Share options granted to
employees where the exercise price is less than the average market
price of the Company's ordinary shares during the period are
considered to be dilutive potential shares.
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
============================================================= ========= ==========
Profit attributable to equity holders of the parent 16,061 61,742 103,110
==================================================== ======= ========= ==========
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
GBP'000 GBP'000 GBP'000
============================================================ ========= ==========
Basic weighted average number of shares (excluding
own shares held) 120,617 124,571 122,948
=================================================== ======= ========= ==========
Effect of dilution:
=================================================== ======= =====================
Share options 879 2,014 2,655
=================================================== ======= ========= ==========
Diluted weighted average number of shares 121,496 126,585 125,603
=================================================== ======= ========= ==========
Unaudited Unaudited Audited
H1 2016 H1 2015 Year 2015
pence pence pence
================================= ========= ==========
Basic earnings per share 13.3 49.6 83.9
=========================== ==== ========= ==========
Diluted earnings per share 13.2 48.8 82.1
=========================== ==== ========= ==========
11 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:
Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
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
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 2016 the Group had forward currency contracts, which
were measured at Level 2 fair value subsequent to initial
recognition, to the value of a net asset of GBP3,524,000 (30 June
2015: GBP210,000 net liability, 31 December 2015: GBP1,298,000 net
asset).
The net realised gains from forward currency contracts in the
period to 30 June 2016 of GBP1,335,000 (30 June 2015: GBP2,255,000
loss, 31 December 2015: GBP747,000 gain), are offset by broadly
equivalent realised losses/gains on the related underlying
transactions. There were no transfers between Level 1 and Level 2
during the period (2015: nil).
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.
12 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 comparative figures for the financial year ended 31 December
2014 are not the company's statutory accounts for that financial
year. Those accounts have been reported on by the company's auditor
and delivered to the registrar of companies. The report of the
auditor was (i) unqualified,
(ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their
report, and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAAPSAEEKEAF
(END) Dow Jones Newswires
August 26, 2016 02:00 ET (06:00 GMT)
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