17th Jul 2014 08:12
LONDON (Alliance News) - Computacenter PLC Thursday said it is confident in its growth prospects in the long term, and it remains on track to meet its expectations for 2014, as it saw revenue rise in the half year to end-June.
The IT services company said revenue rose 2% in the period, although revenues were up 4% at constant currency. Within this, services revenue rose 3% and supply chain revenue was up 2%, both on a statutory basis.
In both the UK and France, revenue was up 14%.
The company said it remained pleased with the performance of its UK business, particularly in its Services segment, which rose 8%.
It said that whilst supply-chain revenue rose 18% overall in the UK, growth was not as strong in the second quarter as it had been in the first. It has secured a significant renewal of a major customer contract within contractual services in the second quarter, and is close to securing a new contract.
In France services revenue was up 3% and supply chain revenue was up 17%. Supply chain revenue growth was hit by a quiet June as Computacenter switched its enterprise resource planning system. Gross margins have been challenging in France, particularly in services, Computacenter said.
"We are uncompetitive in France and in order to improve long term profitability, we need to address our cost base," the company said in a statement. It expects to post a restructuring charge of around GBP9 million in this business.
Revenues in Germany fell 10% at constant currency in the first half, with a 2% increase in services revenue failing to offset a decline of 16% in supply chain revenue. This reduction was due to one low-margin software license of about GBP25 million sold in the second quarter of 2013 that did not repeat, Computacenter said.
Computacenter said that its three onerous contracts continued to perform in line with the provision it previously made for them.
The company said that whilst it had been surprised and disappointed by the performance of the supply-chain business in Germany, it is starting to see some improvement in services, which it said is strategically more important.
Shares in Computacenter were down 0.6% early Thursday at 620.00 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Computacenter