11th Mar 2014 08:47
LONDON (Alliance News) - Computacenter PLC Tuesday raised its total dividend, as pretax profit in 2013 was hit by higher exceptional costs relating to onerous contracts in Germany and under-performance in its French business.
The company raised its total dividend for 2013 to 17.5 pence per share from 15.5 pence in 2012.
Computacenter posted a pretax profit of GBP50.5 million, down from GBP64.8 million in 2012, as it was hit by exceptional costs of GBP27.1 million. Revenue rose to GBP3.07 billion from GBP2.91 billion in the previous year,
Exceptional costs included impairment charges relating to three managed service contracts in Germany that Computacenter identified as onerous. As a result the company's German segment posted trading losses in 2012 and 2013 relating to the onerous contracts; and these losses have been reclassified as exceptional items. Computacenter accordingly restated its results for 2012 to reflect this.
Computacenter also posted GBP4.3 million in redundancy and restructuring costs, related to the German business. The company has been working to stabilise its operations in Germany, and said it was now well positioned for the future. The German operation posted revenue of GBP1.27 billion, up from GBP1.19 billion in the previous year.
Additionally, the deteriorating performance of the company's French business led to a GBP12.2 million write off of intangible assets. Although business conditions in France were challenging, Computacenter also blamed itself for the disappointing performance of the business, saying it had taken too long to implement its Enterprise Resource Planning system which had led to logistics issues.
Revenue in France declined to GBP466.3 million from GBP479.3 billion in the previous year.
Computacenter posted a one-off gain of GBP4.0 million relating to the evaluation of other long-term services contracts across the group, although this was not large enough to offset other exceptional costs.
In the UK revenue rose to GBP1.29 billion from GBP1.20 billion, driven by an increased customer base which boosted revenue growth in its Supply Chain business.
The company said that it expects to make further progress in 2014, although "at such an early stage of the year it is difficult to be very specific about the outcome."
For 2014, the company does not expect a significant improvement in Services revenues until the second half of the year "at the earliest", and expects the onerous contracts to continue to perform in line with its provisions. The company expects its French business to remain loss-making as it takes steps to better position it.
Shares in Computacenter were trading down 3.3% at 695.00 pence Tuesday morning, the third biggest faller on the FTSE 250.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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