Contractual services drive Computacenter

9th Jul 2009 08:20

Computacenter cheered the City Thursday when it said its interim profits will be ahead of current market expectations.The IT services group said it has seen solid growth of 10% in its Contractual Services revenue, while costs have reduced significantly. On the down side the trend is for its customers to reduce their capital budgets and this has hit product sales and Product Services revenue.Overall revenues reduced by 3% in the first half of 2009, and were down by 8% on a constant currency basis.The company reiterated that it will probably take an exceptional charge of around £5m this year, most of which will be taken at the interim stage.At the end of June net funds were around £49m before customer specific financing (CSF), compared to net debt before CSF of £29.7m at the halfway stage of 2008, though the company notes that the cash position this year has been “flattered on a one off basis” by around £10m in the UK due to the timing of the quarter end.CSF at the end of June was around £65m, compared to £66.2m at the same stage last year.“Looking particularly at the second half of 2009, we are unlikely to see a return to growth in capital expenditure on IT equipment across our geography, however we are confident of further progress in our contractual services business where we save our customers money,” the company said.