Sign In
Last checked at 
16 Oct 2009 07:00
ο»Ώ
Interim Management Statement
Computacenter plc the independent IT services provider,Β today,Β publishes its Interim Management Statement based on unaudited financial information, for the thirdΒ quarter of 2009.
Β
Financial Performance
Trading in the third quarter was in line with our expectations.Β
Group revenue,Β for the third quarter,Β declined by 8% to Β£552 million on an as reported basis and by 12% on a constant currency basis.Β Β After nine months of the year,Β Group revenues have declined byΒ 5% to Β£1,769Β million. Some of this decline is due to the partial exit from trade distribution business at the end of 2008. Our services business has performed well,Β withΒ revenueΒ growth in Q3 ofΒ 10% (YTDΒ 12%)Β and we are now starting to benefit from the contract wins earlier in the year, particularly in the UK. We have also been able to secure additional services wins in the third quarter,Β although these will not make a significant contribution to group performance until 2010.
We are managing to over achieve on our cost reduction plans,Β which were laid out at the beginning of the year and we are now expecting to achieve in excess of Β£20 million ongoing expense reduction per annum,Β by the end of 2009,Β an increase of over Β£5 million against our previous target. We took an exceptional charge in the first half of 2009 for these cost reductions, which may increase by circa Β£1m in the second half,Β as we identify further cost reduction opportunities.Β
In the UK,Β revenue in the third quarter from services was up 10%,Β while revenue from continuing product operations was down 25%. UK operating profit for the third quarter was ahead of the same period of the previous year,Β mainly due to the accelerating services revenue growth and material cost reductions.
In Germany,Β the third quarter of last year was particularly strong. In Q3 2009, in constant currency, services revenue was down 5% and product revenue was down 7%.Β
In France, in constant currency, in the third quarter services revenue increased byΒ 17%,Β while product sales reduced by 9%. As we expected, the second half performance in France will be difficult,Β compared to the second half of last year, due to a significant spend reduction by our largest customer.
Β
Financial PositionΒ
Cash generation continued the positive trend we have experienced so far this year. At the end of the quarter,Β we had net cash excluding customer- specific financing of approximately Β£56 million,Β compared to net debt of Β£16Β million at the end of Q3 2008. Net debt,Β including customer -specific financing,Β reduced to approximately Β£4 million compared to Β£89Β million at the end of Q3Β 2008.
Β
Group Outlook
The encouraging performance we experienced in the first half,Β particularly in services growth,Β has continued into the third quarter. This,Β coupled with the strong list of recent wins and encouraging pipeline for the future, particularly in the UK, continues to improve Computacenter's visibility for 2010 and beyond. We are particularly encouraged by the high percentage of customers that are renewing and extending their contracts,Β which we see as testament to our ability to deliver on our promises and reduce their operating costs. The current economic climate has had a significant effect on capital projects and consequently,Β our product business. However, ourΒ cost controlΒ measuresΒ have more than offset the reductionΒ of contribution from the decline inΒ product revenueΒ and haveΒ enabled us to increase Computacenter's operational leverage,Β so we are positioned to take full advantage of any upturn, no matter how small. While much remains to be done, as we enter into the all important fourth quarter,Β the business remains on track for the year as a whole.Β
Our next scheduled trading update will be the pre-close briefing,Β prior to our annual results,Β which is scheduled for 12 January 2010.
Β
EnquiriesΒ
Computacenter plc
Mike Norris, Chief Executive 01707 631601
Tony Conophy, Finance DirectorΒ 01707 631515
Tessa Freeman, PR Manager 01707 631514
Β
Tulchan CommunicationsΒ 020 7353 4200
Andrew GrantΒ
Lucy LeghΒ
Β
Follow the stocks
