Computacenter is expecting stronger momentum in the second half – partly driven by a rise in so-called ‘podium’ customers – after logging a 10% first-half sales drop on tough comparables.
The LSE-listed global reseller and services outfit saw gross invoiced income (GII) fall 10.3% year on year to £4.54bn in the six months to 30 June 2024.
A 12.2% drop in ‘Technology Sourcing’ (ie product resale) GII to £3.74bn did the damage, while services revenues fell 0.6% to £796.5m.
Group adjusted operating profit fell 30% to £81.1m.
This performance “largely reflected the expected normalisation of Technology Sourcing volumes against an exceptionally strong comparative”, CEO Mike Norris said.
Why the optimism?
For a company that’s just posted a double-digit drop in sales and profits, Computacenter was remarkably upbeat as it pointed to an increasing committed product order backlog and pipeline of opportunities.
As per its July trading updated, Computacenter expects to “make progress in FY 2024 as a whole on a constant currency basis”.
Confidence is running high after the giant added a net seven ‘podium’ customers (those who generate over £1m of gross profit annually) during the first half.
In North America, Computacenter added eight podium customers, including two in the hyperscaler market, which it now sees as an “important community” given their appetite for the kind of AI-centric infrastructure Computacenter specialises in.
UK recovering from ‘disappointing’ H1
Computacenter also mustered some optimism for its UK arm, despite branding its first-half performance “disappointing”.
UK GII fell 14.7% to £1.085bn, with technology sourcing GII down 17.7% to £864.6m as the giant admitted demand for hardware proved “weaker than anticipated at the start of the year”.
UK services revenues were flat at £220.1m, with managed services revenues down 3.4% and professional services returning to growth with revenues up 7.9%.
On the plus side, Computacenter renewed a six-year contract worth around £1bn with a large UK customer covering all three service lines. Its professional services pipeline remains “healthy”.
Computacenter’s UK product order backlog as of 30 June 2024 stood at £360m, representing an 18.7% increase year on year, meanwhile, with Windows 11 expected to provide an impetus for a device refresh, it added.
Computacenter hailed “solid underlying performances” in its two largest operations of North America and Germany, which saw GII fall 9.4% to £1.654bn and by 14.3% to £1.189bn, respectively.
“We have made an encouraging start to Q3 and, consistent with our July trading update, we expect stronger momentum in the second half underpinned by the size of our committed product order backlog and wider pipeline of opportunities,” Norris stated.
“While we are mindful of the backdrop of continuing geopolitical and macro uncertainty across our markets we continue to expect to make progress in FY 2024 as a whole on a constant currency basis.”
