Interactive Investor

ii view: Computacenter aided by working from home boom

22nd January 2021 15:38

Keith Bowman from interactive investor


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This IT solutions provider has again raised profit guidance. Here’s why.

Full-year trading update to 31 December

  • Revenue, excluding acquisitions, up 3%
  • Expects full year adjusted pre-tax profit to be in excess of £195 million, up from a previous £190 million
  • Net funds of £188 million held

ii round-up:

IT equipment and solutions provider Computacenter (LSE:CCC) again raised its profit forecast as governments and corporations continued to make good and invest in their systems for staff to work from home under pandemic lockdowns.

Adjusted full-year profit is now expected to be more than £195 million, up from December guidance of not less than £190 million and an improvement from £146 million in 2019.

Computacenter shares gained more than 3% in UK trading, although drifted back to a marginal gain in afternoon trading. Its shares are up around 40% over the last year, comfortably outperforming a 10% retreat by the FTSE All Share index. 

Revenue adjusted for acquisitions rose by 3%, aided by technology sourced product sales to the public sector and service based customers. Spending by manufacturing and industrial customers remained materially slower. Strong use of its own staff as opposed to spending on contractors and reduced travel expenditure had helped to lift profit margins. 

Revenues including acquisitions rose by 8%. In 2020, Computacenter acquired Canadian headquartered IT company Pivot Technology Solutions for just over £60 million. Pivot generates most of its sales from customers in the US. The purchase follows its 2018 buy of Fusionstorm, further expanding its scale in North America.    

Accompany management outlook comments suggested that the pandemic push to trading was showing no sign of reducing. Pipelines for both technology sourcing and services are as strong as at any time over the last year.

Full-year results to the end of 2020 at scheduled for 16 March.

ii view:

Formed in 1981 and headquartered in Hatfield, Computacenter is today a substantial reseller business with the largest service capability of any reseller in the world. Along with supplying equipment, it advises organisations on IT strategy, implements the most appropriate technology, optimises performance, and manages its customers’ infrastructures.

In geographical terms, Germany is its biggest market, generating nearly two-fifths of 2019 sales, followed by the UK at just under a third and France and Belgium at around a quarter. It runs infrastructure operations centres and group service desks across Europe, South Africa, Asia and the Americas from which its employees provide user support in 30 languages.

For investors, management caution regarding any cooling of trading once the pandemic subsides is noteworthy. As is an estimated price/earnings ratio of over 20, above both the three and 10-year averages, suggesting the shares are not obviously cheap. However, the pandemic is accelerating the world’s move online, and public and private sectors are looking towards IT experts such as Computacenter to aid operations. In all, while the current pandemic push could ease, moves into North America and the virtual world of tomorrow arguably underpin long-term prospects. 


  • Product and customer sector diversity
  • Holding net funds


  • Slower industrial customer spend
  • IT sales are often volatile

The average rating of stock market analysts:


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