Computacenter earnings rise but UK business declines
Updated : 13:13
IT service provider Computacenter said 2017 should be a "year of progress" after earnings rose in 2016 with good performances in Germany and France, although revenue fell in the UK.
The FTSE 250 company generated record adjusted diluted earnings per share of 54p, an increase of 1.1% and reported annual services revenue of over £1bn for the first time in 2016.
In the UK, the company said that strong revenue growth in the second half of the year could not prevent a 1.1% full year adjusted revenue decline to £1.39bn and supply chain margin challenges and services revenue decline contributed to a 21% reduction in adjusted operating profit to £46.8m.
On the upside, Germany delivered revenue growth of 1.2% to €1.14bn across supply chain and services, alongside a 15.4% increase in adjusted operating profit, while France performed ahead of expectation, with a £4.5m increase in adjusted operating profit to £2.9m due to supply chain margins.
Revenue for the whole company grew 6.3% to £3.24bn and adjusted pre tax profit fell 0.65 to £86.4m.
The company declared a dividend of 22.2p per share, up 3.7%.
Chief executive Mike Norris said: “The group should have a year of progress in 2017, with a rebalancing of profits between the first and second halves of the year towards the historical pattern. We expect the UK to see modest improvements due to professional services and supply chain helping the overall performance.
“While Germany will be coming off a strong year, and therefore a difficult comparison, the business has strong momentum and potential to improve services margins. For the French business we would be happy to repeat the same bottom line, with some deterioration in our supply chain compensated by improvement in services revenue.”
He added that new technologies and the drive to digitalisation within its core customer base is driving customers to invest capital in new projects which is unlikely to abate, however, this is coupled with a resolute desire by teh company to reduce run rate operating costs.