(Alliance News) - Computacenter PLC on Friday reiterated its recently-upgraded guidance for 2019 despite a marginal reduction in profit in first half.
The computer services provider reported a 2.3% decline in pretax profit in the six months to the end of June to GBP50.8 million from GBP52.0 million a year earlier, despite revenue jumping by 21% to GBP2.43 billion from GBP2.00 billion. On a constant currency basis, revenue increased by 22%.
The company said France has had a "pleasing" start to the year, with an increase in revenue of 19%, led by a buoyant Technology Sourcing marketplace, where Computacenter said it is growing its customer breadth.
Germany also delivered another "strong" performance, Computacenter noted, with revenue growth of 4.1% during the period, driven by a resilient Technology Sourcing performance and a strong Professional Services result.
"This was a very good performance given the material spend reduction from a key customer, which declined by 60% down to normal volumes rather than those seen in the prior period, which created such a challenging comparison," the company said in its statement Friday.
Meanwhile, the UK unit reported a reduction in revenue of 7.8% as both Services and Technology Sourcing units underperformed. The prior period comparative result contained two very large margin-dilutive Technology Sourcing deals, Computacenter noted, that, being one-off in nature, contributed to this decline.
The US acquisition, made halfway through the second half of last year, has seen a more subdued performance in the first half of 2019, due to an increase in operational costs, increased investment in the business, and a decline in operating margins.
Computacenterc declared an interim dividend of 10.1 pence, up 16% from 8.7p paid the year prior.
"The board's outlook remains in line with its expectations, which were upgraded on July 31," said Chief Executive Mike Norris.
At the time, the mid-cap company expected 2019 adjusted pretax profit to be "materially ahead" of the GBP127.5 million market expectation. In 2018, Computacenter generated GBP118.2 million adjusted pretax profit.
"Looking further ahead will always be challenging but the momentum in the industry remains positive as customers continue to invest in technology to digitalise their business," added Norris.
Computacenter (CCC)