Interactive Investor

ii view: Covid boost for high-flying Computacenter

9th September 2020 12:29

Keith Bowman from interactive investor


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Financial services have compensated for industrial spending cuts at this IT solutions provider. 

First-half results to 30 June  

  • Revenue up 1.5% to £2.46 billion
  • Pre-tax profit up 43% to £72.4 million
  • Net funds of £24 million, up from debt of £114 million
  • Interim dividend up 22% to 12.3p per share


Adjusted full-year pre-tax profit is unlikely to be less than £180 million

Chief executive Mike Norris said:

'As previously stated, our business has performed well this year to date and proven to be flexible in these extraordinary times.

"While nothing can be taken for granted, it is the Board's view that, based on current business activity levels, our adjusted profit before tax for the year is unlikely to be less than £180 million. We feel it is important to give specific guidance given the broad range of market expectations concerning our likely results.

"Obviously, our markets have proved resilient as our customers have invested in their infrastructure to support their businesses, they have utilised the skills of our people and we have managed our cost base.

"It is impossible to predict exactly how the world will recover in 2021, and beyond, and the implications for our customer base. We do believe that our customers will continue to invest in technology and that we have built a substantial reseller business with the largest service capability of any reseller in the world and the most substantial international footprint.”

ii round-up:

IT equipment and solutions provider Computacenter (LSE:CCC) today reported a 43% increase in profits, as governments and financial services companies rushed to make good their systems for staff to work from home under pandemic lockdowns. 

Computacenter shares rose by more than 3% in early UK trading generating a gain of nearly a quarter since the start of the year. Shares for NHS patient records IT company Kainos (LSE:KNOS) are up by over a third, while shares for Industrial software maker AVEVA Group (LSE:AVV) are just into positive territory in 2020. 

Emergency demand from governments and finance companies helped offset spending cuts at industrial companies, such as German automotive makers, leaving Computacenter revenue little changed year-over-year.

A combination of higher margin customer sectors and reduced costs as its own staff moved to work from home helped to propel profits. Computacenter now expects full-year adjusted pre-tax profit of around £180 million or more, up from 2019’s £146 million.

Alongside the numbers, Computacenter also announced the acquisition of 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 Computacenter’s 2018 buy of Fusionstorm and expands its scale in North America.    

ii view:

Formed in 1981 and headquartered in Hatfield, Computacenter is today a major provider of IT infrastructure services. Along with supplying equipment, it advises organisations on IT strategy, implements the most appropriate technology, optimises performance, and manages its customers’ infrastructures. It operates across the three areas of technology sourcing and professional and managed services, with sourcing accounting for around three-quarters of overall 2019 revenues.

On a geographical basis, Germany is its biggest market, generating nearly two-fifths of sales, followed by the UK at just under a third and France and Belgium combined at around a quarter. It operates 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, IT sales are often volatile, while an estimated price/earnings ratio of over 20 is above both the three-and-10-year averages. But Covid-19 is arguably accelerating the world’s move online, with both public and private sectors increasingly leaning on IT providers such as Computacenter to aid operations. In all, while any return to normality from the pandemic could see investor enthusiasm dampened, the virtual world of tomorrow arguably supports Computacenter's long term prospects. 


  • Product and customer sector diversity
  • Holding net funds


  • German revenue fell by 3%
  • Volatile profits 

The average rating of stock market analysts:


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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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