Computacenter says more work needed to improve French business

24th Apr 2014 07:42

- Restructuring charge expected due to changes in France - Group revenue up eight per cent- Trading mixed between regionsComputacenter said it expects to be hit with restructuring charges as it works to reduce costs further in France with 'much work to be done' in the region to improve its performance.The company, which provides IT infrastructure services, said that 2014 will be a "year of progress" and it still expects to meet full-year expectations. "However, it is clear that the group continues to be held back by the performance in France."Computacenter said group revenue for the first three months of the year was up 8% at £745.1m. In constant currency, this represented an overall increase of 9%, with Group Services revenue growing by 4% and Group Supply Chain revenue growing by 12%.The UK had a "particularly strong" first quarter with regional revenue rising 20% to £350.4m. In Germany, sales were down 2% in constant currency at £267.7m though trading was described as "stable".Over in France, the top line actually grew by 10% to £114.7m as 13% growth in Supply Chain outweighed the 5% fall in Services. However, this revenue growth came from the lowest-margin areas of the business and has not translated to a material improvement in profits.Meanwhile in Services, Computacenter said the revenue decline was disappointing and highlighted a need for the business to reduce central costs to an appropriate level. "As we have previously explained, there is much work to be done by our French business to improve its performance," the company said."Therefore, in order to improve the long-term profitability of our French business and ensure that it remains competitive, we will continue to reduce our cost base through the use of our improved systems, and additionally through our Group Operating Model. This is likely to create an exceptional restructuring charge this year, which we currently anticipate will total between £7m and £9m."BC