29th Aug 2014 07:48
LONDON (Alliance News) - Computacenter PLC Friday said it was on track to meet its expectations for the full year as it swung to a profit in the half year to end-June. However, uncertainty remains over the future of the company's French business.
The company proposed an interim dividend of 5.9 pence, up from 5.2 pence in the previous year.
Computacenter posted a pretax profit of GBP18.0 million, swung from a loss of GBP4.4 million, as revenue rose to GBP1.46 billion from GBP1.43 billion, as the IT services firm saw fewer exceptional costs.
Computacenter posted exceptional costs of GBP9.1 million relating to restructuring it is preparing to undertake at its French business; in the previous year the company posted exceptional costs of GBP29.3 million, comprising of costs relating to onerous contracts and a non-cash impairment.
The company saw a strong performance from its UK business, with managed services revenues growing on new contracts and contract renewals.
In Germany, revenue fell 9.6%, hit by reductions at the company's Supply Chain business due to a single low-margin software licence and the loss of a significant customer contract in the second quarter of 2013.
Despite this, Computacenter said the German business had stabilised following challenges with contracts in 2011, and it continues to expect an improvement in margin and Services contract wins over the coming year, although it does not expect a "dramatic improvement" for 2014.
Computacenter's Belgian business performed well in the first half, with revenue up 15% at constant currency. Whilst the company expects this to continue into the second half, it faces a stronger comparative period, and Computacenter expects that growth rates will slow.
Computacenter's French business, however, is undertaking restructuring as it is "uncompetitive". Although its French business saw revenue growth of 15% during the period at constant currency, this was due to one particularly large contract, the company said, and a weak comparison period. It is shifting the business to become more focused on its Services operations, with a business model more similar to the company' UK and German businesses.
The company expects its German Supply Chain business to stabilise, although it warned that the French business is more difficult to predict, as "much work needs to be done in the second half of 2014 and thereafter."
Computacenter said trading remains in line with expectations, and that its continued organic investment and market opportunities underpin its confidence for the rest of the year and beyond.
Shares in Computacenter were trading down 0.4% at 613.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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