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Company mail yesterday.1% additional pay increase across the board to help with rising cost of existing.
Following the message on Weds,the CEO was in Berlin and France presenting to large groups,larger than the last 2 years anyway.
If there is anything coming out of next Weds results i will post again.
Afternoon.I can report the CEO was recently in the states for 3 weeks touring all the branches.
In January 2 new contracts were awarded ,approx 50m plus one big one from Sap,total 670million euros.Inteesting is the contract involves 4 european destinations,one being Moscow.
General mood around the Hatfield site is positive,CC are in for winning back a big customer.Today the Dept of health and BT are in.Last week the Cabinet office.
The talking point is many staff are still working from home,today busy but will tail off tomorrow.
I'll be tuning in a week today for full year results but, sadly for the world, a lot has happened since January.
I'm keen to see if business sentiment has been affected negatively or if the pipeline of contracts has continued much as last year. I follow www.bidstats.uk and there seems to be reasonable flow of UK wins but my mind is more on the other side of the pond.
Chelwood, I appreciate that there is a limit to what you can divulge from within but what's the mood from where you are sitting?
My reaction was the same as yours Aqua.Firstly a near 25% increase in adj.pre tax profits is a great achievement. The response in muted, off the back of an edgy market (switch from growth to value/Russia & Ukraine).
The positives - £241m of adj.net funds (exc.leases) is fabulous versus £189m year end last year. However, assuming that the company continued the phenomenal repayment of debt as it did in the first half I would not be surprised if it has nearly cleared the majority of it £147m of borrowings during the course of the year. Add to this the stock build they have done, which lesser companies will struggle to do and should give a competitive advantage in the current chip shortage - the net current assets versus liabilities will look extremely healthy.
It's what the statement doesn't say that made me a tad nervous. So the sales growth of the first half +31% (currency weighted) seems to have slowed somewhat in the second half to finish the year +27%. First half pre tax profit was +59.4% and the year end is somewhere in the region of 21%.
The second half was always a tough comparative as I think we had about 1.5 months of Pivot/France BT business in 2020 numbers.
That leads me to think that we've had the best of the pandemic effect and it's back to the business as usual.
Having been a recipient of shares when the company floated in 1998 and a long term holder I still believe the company and its senior management is first class. Hopefully, they will continue to integrate and grow their US business and maybe it has given them an appetite to increase their global footprint. Sadly, the city doesn't give the company the premium rating seen of companies like Softcat - CCC are steady and consistent and I'd back it to win the long haul any day.
Now, to finish on a positive - the company is very cash generative and the EPS growth is terrific. Very roughly we may be looking at £1.63 per share which based on a 20x multiple (it should be 25!) gives a share price of £32.76 so it remains an accumulate for me. What can the company do with the cash they are generating? Obviously, they have a good history of returns to share holders but I hope that they continue to look for value accretive acquisitions to bolster footprint in ME, Asia.
Well having read the trading update before the Markets opened I expected a minimum 10% rise so can anyone provide an explanation for today's tepid response?
Ahead of next weeks results, a couple of internal mails were released about contracts won.
Just under 100million euros last week split between two companies and one company this week,manely SAP.5yr contract,value 670million euros.
Don't be shy Jefferies! c.50% upside!!?
JEFFERIES INITIATES COMPUTACENTER WITH 'BUY' - TARGET 4,100 PENCE
Mopped up another £10k yesterday sub £27 myself and playing with numbers based on possible profit outcomes I certainly thought mid-£30 is achievable on full year results, so I'd be happy with 20% return plus divi
I was a little surprised there wasn't a December trading update but this is good ??
Matthew Field: Computacenter
My 2021 punt on gaming services firm Keywords Studios only just clawed its way into the green, so I’m hopefully playing it safer this year. Long seen as a “slow and steady” City constituent, Computacenter, which supplies laptops and other IT kit, has been a big pandemic winner. Mike Norris, chief executive since 1994, has provided six profit guidance uplifts in the last two years. In November it secured a contract for 500,000 laptops for UK schools. With the omicron crisis and a renewed focus on working from home, Computacenter should continue to enjoy high demand.
walletinvestor.com
Sorry for the repeated post - LSE is not working so well for me right now. Sometimes it shows posts and others not and it is frightfully slow
I'd be most interested to read the assumptions made in the 5 year forecast if you can share the source please. It's hard enough to predict next week let alone that time frame.
I've held this company since floatation and seen it below £1 and now riding high. There's no doubting the stock has momentum which is what it will need to keep in my opinion, through acquisitions and global expansion, in order to retain the share price growth. The sales surge is helping but won't last forever.
I am interested in the conundrum that I see with Mike Norris who strikes me as a kingpin to the businesses vision and calculated strategy.....what will happen when he retires? He's already the longest serving CEO of any FTSE350 company so he must be thinking of hanging up his clogs at some point surely. Or has he a few more deals in him yet.......?
Chelwood,
If possible, please can you share the source of the 5 year city forecast? Always interested to read these - I've held since floatation and my portfolio is heavily biased to CCC so have seen it below £1 to the dizzying heights of today.
It does feel like there is a lot of momentum here but my worry is how long Mike Norris will be around to drive further growth - strikes me he is quite a kingpin of the Board and he must be thinking of hanging up his clogs at some stage.
Still if they can crack US then a global strategy beckons me thinks.....
Afternoon All
As my previous posts i am at CC Hatfield.We have recently hosted new employees aquired through the Pivot takeover and from Bt France,not to mention the new branch in Romania.All were here to gain experience of what the comany does and how things work and by all accounts was very sucessful.
I personally maintain once we can crack a few big ones in the USA then the sky is the limit.The ops centre is working around the clock at Hatfield to cope with contracts,i noticed the 5year forecast for this share is estimated by the city to be £62.
For those that missed it Berenburg upped their target price to £36 - very nice too at c.25% over current levels.
I see that the November Public Sector order book looks healthy too with a new £70m order for laptops and around £15m of other orders too https://bidstats.uk/tenders/?q=computacenter
Yes, very short and sweet. I bought into this share recently and was expecting a lift in price. As you say not much info in this Rms, certainly nothing bad anyway.
Morning
I prefer to focus on what CC are doing,leave softcat to others.Looking forward to DEC 1st,saye mature day.
I was going to say "eyes down for the Q3 update" but it will take you all of 10 seconds to read it.
Still it seems from the brief passage that business is still going well.
We'll have to wait for pre-close at the end of January to get more detail.....
Thank God for UBS sounding some very sensible analysis - I've never understood how SCT has such a high rating. CCC certainly more deserving of a higher rating though....
You can read it for yourselves in the News but here it is:
(Sharecast News) - UBS initiated coverage of Softcat with a 'sell' rating and 1,860p price target on Tuesday and upgraded Computacenter to 'buy' from 'neutral', hiking the price target to 3,290p from 2,520p.
The bank said that while Softcat's high return on invested capital warrants a premium, the stock is vulnerable to a de-rating as growth slows.
UBS said the market underestimates the risks from Softcat's high exposure to SMBs - a segment particularly vulnerable as the UK government ends financial support measures. It noted that at the end of January, Softcat had a bad debt provision of £3m, just 1.1% of receivables.
"With 9,500 customers as of FY 20 in the UK & Ireland of which 3,800 spend less than £10k a year and just 300 more than £1m, we believe Softcat is more exposed to this risk than peers," it said.
The bank also reckons Softcat may see a slowdown in hardware spending growth in FY22 in the UK as remote-working and semiconductor-shortage induced demand fade.
"While software spending will be robust it is lower margin, dragging down profitability," it said. "Longer-term, we believe Softcat could also see margin pressure as it has a lower proportion of business coming from services than peers, and we see services as a differentiator that gives pricing power."
UBS said its 'buy' rating on Computacenter is predicated on the view that it can continue to benefit from its limited exposure to SMB bad debt risks and successful growth of its US presence via new local outsourcing relationships and the maturing of its US cloud relationships.
"A more mature managed services market aside, we think Computacenter is likely to see robust demand in Germany and the US which combined accounted for nearly 60% of sales in H1," it said.
Many Thanks Indeed
Not a dumb question at all. It appears to be a number of factors from the FD's report near the end under "cashflow".
No least - there was c.£50m of advanced cash on the books at year end which has been wound down over H1.
They have significantly paid down bank debt from c £121m to c £36m at end of H1. Plus they are carrying c.£100m more in inventory H1 21 v H1 '20. As ever, a faultless management of balance sheet is very robust for future acquisitions.
I was maybe a bit premature calling a cash return but H2 looks good for a debt free balance sheet and rapid increase in cash.
Forgive me if it’s a dumb question.
Only a positive note.Apologies for having to issue the RNS earlier this week but the bods in the city are not doing their jobs.
Looking forward to next week.Have a great weekend
The CEO weekly email to the business is due out at 2pm today.Good chance next weeks results will be discussed.I will post again if there is positive news
I helped with the Post Office Counters rollout here in Northern Ireland and can say the whole operation was very professionally done and the guys in Computacentre were a great bunch to work with.