22nd Oct 2014 07:40
LONDON (Alliance News) - Computacenter PLC Wednesday maintained its outlook for the full year, as it saw revenue decline 3% in its third quarter to end-September, although revenue was flat at constant currency.
The company said it has seen a strong performance in the UK, but has been held back by its performance in France and Germany, although it expects both of these markets to improve in the fourth quarter. This, it said, combined with the continued progress in the UK, underpins its expectations for the full year.
The IT services company said revenue fell 3% to GBP707 million from GBP729 million a year before, as revenue in its group services segment were flat, while its group supply chain revenue fell 4%.
In the UK, revenue grew 5% to GBP314 million in the quarter from GBP299 million a year before, as it signed a "significant" managed services agreement early in the quarter. This contract, combined with the strength of its sales pipeline, helps underpin its expectations for its services business in 2015 and 2016, it said, despite expecting a "likely significant reduction" of one contract at the end of the first quarter of 2015.
In Germany, revenue fell 12% to GBP281 million from GBP320 million. Computacenter said that a significant contract it lost towards the end of the third quarter of 2013 will no longer hit its comparative performance going forward. This, combined with another recently won contract, should lead to growth rates increasing, it said.
Computacenter said the rate of decline in its German supply chain business has reduced, and it expects the businesses performance to further improve in the fourth quarter.
Its three onerous contracts in Germany performed within the provisions it has taken, Computacenter said, and one came to an end in September. Its legal dispute with a sub-contract on one of the contracts has been resolved, it said, and this means it will be able to release some of the provision in the final quarter. It expects this to be over GBP1 million.
In France, revenue was flat at GBP99 million in the quarter. The company said "much work" remains to be done in France, but it is beginning to see returns from its efforts so far. It is implementing what it calls its 'social plan' for the French business. It expects to see an improvement in the French business throughout 2015.
Computacenter said that looking beyond 2014, contract wins in the UK, and to a lesser extent in Germany, position it for services revenue growth in 2015 and beyond.
The company expects to release its full-year results on January 21, 2015.
Shares in Computacenter are trading flat at 603.50 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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