Computacenter hails record year as pandemic boosts demand

(Sharecast News) - Computacenter reported record full-year profits on Tuesday, after the Covid-19 pandemic saw demand for technology and IT-related services soar.
Revenues for the year to 31 December 2020 came in 7.7% higher at £5.4bn. Within that, technology sourcing reported a 9.4% hike to £4.2bn while services rose 2.5% at £1.3bn.

Adjusted pre-tax profits jumped 37.0% at £200.5m, while pre-tax profits rose 46.5% to £206.6m.

Computacenter estimated that the Covid-19 had a net positive impact of approximately £30m of adjusted pre-tax profit. It acknowledged there had been "significant" reductions in spending by industrial customers during the year, but this was offset by new business in public sector and financial services.

In the UK, revenues jumped 11%, with technology sourcing in particular boosted by employees having to work from home.

In Germany, overall revenues eased 2.5%, following falls in the managed services and technology sourcing divisions, although a stronger performance in the higher margin professional services unit meant adjusted operating profits rose 38.1% despite the slide in revenues.

North America, however, was weaker-than-expected, with a "marked" reduction in activity, while France was hit by the slowdown in its large industrial customer base.

Overall, Mike Norris, chief executive, said the results had exceeded expectations: "2020 has seen the fastest profit growth Computacenter has achieved in its 22 years as a public company.

"Clearly, the challenge it gives us is to grow again in 2021. While Computacenter will always focus on the long term and resist the temptation of short-term actions to maintain growth, we feel the opportunity for progression this year, while not certain, is real.

"We have come into 2021 with solid momentum and have experienced a very positive start to the year."

As well as boosting demand for technology in the short term, Computacenter said that longer term, the pandemic had accelerated the drive towards digital.

Numis said: "Geographically, the UK had by far the best performance, with strong services margins due to increased utilisation, reduced external contractor costs and improving technology sourcing margins.

"After multiple upgrades during the year, it's clear 2020 exceeded all expectations."