ii view: Computacenter extends rally amid profit boom prediction

First-quarter trading update to 31 March

• Now expects to deliver full-year profit comfortably above existing City forecasts of around £291.3 million

ii round-up:

Tech hardware supplier and IT consultant Computacenter (LSE:CCC) flagged a ‘strong’ first quarter trading performance, driven by demand from hyperscale customers in both the US and UK. 

The Hatfield, Hertfordshire headquartered company now expects annual adjusted pre-tax profit comfortably above current City estimates of around £291.3 million which compares with last year's £272 million. 

Shares in the FTSE 250 company soared around 14% following the update having come into this latest news up by a similar amount year-to-date. Software maker and supplier Kainos Group (LSE:KNOS) is down by around 17% so far in 2026. The FTSE 250 index is up by almost 1% over that time.

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As well as being one of the world's six largest resellers of tech equipment, Computacenter also advises organisations on IT strategy, implements the appropriate technology and manages customer’s infrastructures for them. 

Computacenter pointed to a strong product order backlog across all regions, with some customers ordering items further in advance than usual to secure supply given a backdrop of hardware component shortages impacting the IT industry.

Away from hardware, growth in consultancy, or professional services helped offset a decline in managed services for customers.  

Geographically, as well as North American hyperscale customer demand for hardware, UK customers are now completing big AI projects. Increasing German equipment demand compared with continued weakness for professional services, while other European demand saw only a small improvement. 

Broker UBS reiterated its ‘buy’ rating on the shares, flagging expectation of an increase in current full-year adjusted pre-tax profit to between £305 million and £310 million. 

Computacenter’s first-half results are scheduled for 8 September. 

ii view:

Started in 1981, Computacenter today employs more than 21,000 people worldwide. Technology sourcing accounted for most revenues over the group’s last financial year at just over fourth-fifths, with service revenues the balance. 

North America accounted for most sales in 2025 at 53% followed by Germany at 23%, the UK 15% and Western Europe most of the 9% balance. Group customers do or have included Microsoft Corp (NASDAQ:MSFT), International Business Machines Corp (NYSE:IBM), Dell Technologies Inc Ordinary Shares - Class C (NYSE:DELL), Cisco Systems Inc (NASDAQ:CSCO), and Transport for London.

For investors, some pulling forward of future demand may be the case given shortages of hardware components such as microchips. A forecast price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap. Corporate investment in technology is cyclical and subject to ups and downs, while a majority of sales overseas leave financial performance subject to currency moves.  

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To the upside, AI requirements, IT efficiency, digitalisation and cyber security all remain key focuses for companies, organisations, and governments globally. Customer sector and geographical diversification exist. Net funds of £426 million as of late December point to a robust balance sheet, while shareholder returns since floating on the stock market total over £1 billion, with the shares now on a forecast dividend yield of around 2%.

In all, and despite risks, huge sums of money being spent by giant tech companies like Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc Class A (NASDAQ:META) and Alphabet Inc Class A (NASDAQ:GOOGL) on AI investments look to offer grounds for ongoing investor enthusiasm.    

Positives: 

• Product and customer sector diversity
• Exposure to potential AI requirements

Negatives:

• IT sales are often volatile
• Currency moves can impact

The average rating of stock market analysts:

Buy