Interactive Investor

ii view: Computacenter flags buoyant 2023 demand

31st March 2023 12:04

by Keith Bowman from interactive investor

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Down by over a third in 2022, shares in this FTSE 250 company are doing better in 2023. We assess prospects. 


Full-year results to 31 December

  • Revenue up 28.5% to £6.47 billion
  • Adjusted pre-tax profit up 3% to £264 million
  • Adjusted earnings per share rose 2.5% to 169.7p per share
  • Final dividend of 45.8p per share
  • Total dividend up 2.4% to 67.9p per share
  • Net cash down 3% to £264 million

Chief executive Mike Norris said:

“By the end of the first half of 2022, almost all of the Covid benefits had disappeared from the business. Demand from most of our largest customers remains solid, particularly for IT infrastructure on which their businesses rely.  We have seen top-line revenue extremely buoyant so far this year and expect this trend to continue.

“We remain positive about the outlook in the short, medium, and long term. While there are plenty of challenges due to the macroeconomic environment, we continue to expect 2023 to be a year of progress.”

ii round-up:

IT equipment and solutions provider Computacenter (LSE:CCC) today detailed its 18th consecutive year of earnings growth, with sales so far this year proving extremely buoyant. 

Adjusted earnings per share rose 2.5% to 169.7p, despite tough comparatives from the prior pandemic aided 2021, pushed by revenues up 29% to £6.47 billion. 

Shares in the FTSE 250 company rose by more than 2% in UK trading having come into this latest announcement up by 9% year-to-date. That’s similar to rival Softcat (LSE:SCT) and ahead of a gain of under 1% for the wider FTSE 250 index in 2023 so far. 

Along with supplying equipment, Computacenter also advises organisations on IT strategy, implements the most appropriate technology, optimises performance, and manages its customers’ infrastructures. 

Customer accounts with gross profit of over £1 million per annum increased by 11% over the year, underlining the Hertfordshire headquartered company’s ability to retain and develop long-term customer relationships. 

Sales for its technology equipment sourcing business climbed 37% year-over-year to £4.89 billion, helped by an easing in supply chain challenges, with sales for customer services expanding 8% to £1.57 billion. 

Geographically, North America topped sales, coming in at £2.5 billion or 39% of overall revenues, followed by Germany at £1.84 billion or 28% and the UK at £1.27 billion or 20%.  

Broker UBS reiterated its ‘buy’ rating following the results. 

ii view:

Started in 1981 and joining the stock market in 1998, Computacenter today employs around 20,000 people. A major reseller of both computing hardware and software, its major vendor partners include Microsoft Corp (NASDAQ:MSFT), Hewlett Packard Enterprise Co (NYSE:HPE), Cisco Systems Inc (NASDAQ:CSCO), and International Business Machines Corp (NYSE:IBM). Group customers have included the Met Office, William Hill, and Transport for London.  

For investors, the highly uncertain economic outlook, including rising interest rates, makes for a difficult environment for its customers to spend on products and services. The boost from the pandemic in terms of both customer spending and its own temporarily reduced costs has now passed, while costs for businesses generally now remain elevated. 

More favourably, digitalisation and IT efficiency remains a core focus for corporations globally, with demand during the early months of 2023 remaining robust. Both customer sector and geographical diversification are enjoyed, Computacenter itself is investing in its own operations, while a forecast dividend yield of over 3% is not to be ignored.   

For now, and with the consensus analyst estimate of fair value standing at over £26 per share, fans of this FTSE 250 company are likely to remain aboard.


  • Product and customer sector diversity
  • Continued bolt-on acquisitions


  • IT sales are often volatile
  • Currency moves can impact

The average rating of stock market analysts:


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