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Computacenter profit up 23%; UK business to return to operating profit in 2018

Computacenter reported adjusted profit before tax rose by 22.9% to £106.2m in 2017, as adjusted revenues rose to £3.79bn from £3.25bn in 2016.

The company declared a dividend of 26.1p per share, up 17.6%.

In the UK, Computacenter reported revenue increased by 8.8% to £1.50bn from £1.38bn the previous year driven by strong performance in supply chain and professional services businesses. That led to a 6% increase in adjusted gross profit to £214.6m from £202.5m.

The UK services business returned to growth in 2017 with revenues increasing by 6.2% to £505.8m.

In Germany, the company said revenue grew 15.5% to €1.97bn driven by a very strong supply chain business as the firm continued to focus on datacenter, security and networking segments. Adjusted operating profit for the German business increased by 57% to €68.3m.

Computacenter said it should be able to grow the supply chain business again in 2018, based on the strong German economy and its customers' ongoing investments into network infrastructure, security and cloud, as well as increasing demands driven by Windows 10.

France performed ahead of management's expectations as revenue rose 13% to €581.3m from €514.3m, while adjusted operating profit rose 17.1% to €60.9m driven by solid growth in both services and supply chain businesses.

In Belgium, the company said total revenue increased by 2.0% to €70.8m, while overall adjusted gross profit rose by 12.1% to €10.2m.

The group made a statutory profit before tax of £111.7m, up 28.2% from £87.1m in 2016.

The company reported adjusted diluted earnings per share of 65.1p, up from 54p and reported annual services rose 11.5% to £1.16bn in 2017.

Computacenter said it expects its UK business should return to operating profit growth in 2018, helped by recent contract wins and solid market conditions. While In France, 2018 is expected to be challenging ahead of significant contract renewals without the benefit of a successful project that finished at the end of 2017.

Chief executive Mike Norris said: 'The growth rates we recorded in 2017 meant we achieved record Group revenues, adjusted1 profit before tax and adjusted diluted EPS, and set ourselves a high bar to outperform in 2018. However, with a tailwind from the Return of Value completed in February 2018, we expect 2018 will be a year of progress in our primary measure of adjusted1diluted EPS.'

At 8:50am: (LON:CCC) Computacenter PLC share price was -80p at 1048p

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