Computacenter Regulatory News (CCC)

10 Jan 2007 07:00

Computacenter PLC10 January 2007 Computacenter plc Pre-Close Trading Update Computacenter is today providing an update on trading for the year ended 31December 2006. Group profit before tax for 2006 is expected to be in line with consensus marketexpectations of £38.2 million before taking account of the exceptional chargesin France detailed below. Cash generation has been positive in the fourthquarter and the year end net cash, excluding customer-based finance leases, willbe circa £25 million, before the funding of the Digica Group acquisitionannounced on 4 January 2007. Profitability in the UK improved steadily as the year progressed, even aftertaking account of a £2 million adverse swing in relation to charges arising fromshare-based payments. The main improvement in profitability came from betterproduct margins. Revenues from product sales were marginally reduced, reflectingin part Computacenter's efforts to move away from low margin volume sales intrade distribution. Services revenues grew modestly, with a strong performancein Professional Services being offset by a small decline in contractualservices. In Germany, the new datacentre shared services contracts signed in the firsthalf of 2006 have had a significant adverse impact on profitability,particularly in the third quarter. These contracts performed better in thefourth quarter, although they are not yet profitable. Elsewhere very goodtrading has been evident in the fourth quarter, particularly in product sales.The sales pattern appears to have been partly helped by customers buying aheadof the VAT change at the end of the year, although it is too early to tell howmuch of the improvement has resulted from this. French performance improved in the second half of the year reflecting normalseasonality patterns; however, there was also some underlying improvement. Tofurther reduce French losses in 2007, actions to decrease the cost base havecontinued, resulting in an exceptional charge of slightly in excess of £2million in 2006. In addition, an exceptional non-cash impairment charge of £2.5million to write down the value of tangible fixed assets in France has also beentaken. Computacenter will announce its preliminary results for the year ended 31December 2006 on Tuesday, 13 March 2007. Enquiries: Computacenter plcMike Norris, Chief Executive 01707 631601Tony Conophy, Finance Director 01707 631515Tessa Freeman, PR Manager 01707 631514 Tulchan Communications 020 7353 4200Andrew GrantStephen Malthouse This information is provided by RNS The company news service from the London Stock Exchange