Computacenter Regulatory News (CCC)

10 Jul 2008 07:00



Computacenter plc

Pre-Close Trading Update

Computacenter is today holding an Investor and Analyst conference call to provide an update on trading for the six months to 30 June 2008.

Group revenues for the first-half of 2008 will show growth of approximately 8%. Even after taking into consideration the benefit of a strengthening euro, the organic growth rate is the strongest for a number of years. 

Since we last reported on trading, the improved performance at our UK and French subsidiaries has continued. We are pleased to report that the Q2 2008 performance was ahead of Q1 2008, and ahead of Q2 2007 in both revenue and profit in both countries.

As we have already announced, the UK had a difficult start to 2008 and the first six weeks trading was particularly tough, however UK sales for the first six months were up 4.8% and up 8.3% in Q2. We have seen strong growth from our Software Business Unit where we believe we have gained significant market share however this does have a diluting effect on our overall gross margins.

We continue to invest heavily in our UK business to build our position in the mid-market and to increase our services capability. These investments, together with the poor start to the year will, as anticipated, result in UK first-half profitability below last year.

The improved performance in France in Q2 has meant that the first half loss will be broadly similar to H1 2007 in local currency but the positive trend in performance together with some major contract successes bodes well for the second half of 2008.

In Germany trading has been consistent throughout the first half of 2008. Revenue in local currency has fallen slightly in comparison to the first-half of 2007, however, mainly due to improved services margins, the profit growth we experienced last year has continued. 

Group debt at the end of the period will be approx £30M (2007H1: £16.5M) before customer specific financing. Good cash generation meant that before taking into account the £20.8M we have spent buying back shares since 1 July 2007 our net debt position improved by £7.3M.

We are encouraged by the Group's performance in the second quarter. Although there is much uncertainty in the market place, customers undoubtedly need to invest in information technology to increase the efficiency of their businesses, reduce risk and improve their competitiveness. We believe customers are increasingly looking to Computacenter to gain an increased value from their information technology investment.

As anticipated first-half Group pre-tax profits are expected to be lower than the same period last year. However, due to the impact of share buy backs and an improved tax position, earnings per share will show an improvement.

Computacenter will report its Interim results on 28 August 2008.

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