UK a drag on Computacenter's growth

20th Apr 2011 08:43

Information technology infrastructure services provider Computacenter has seen revenue growth in Germany and France offset weaker demand in the UK in 2011.Describing performance so far in 2011 as "satisfactory" the group said group revenue for the first quarter was up 2% on a year earlier, with services revenue growing 6%.UK services revenue grew by 3% while product revenue declined by 23%, in part due to the anticipated reduction in spending in the government sector but also because last year's figure was fattened by a one-off large product transaction.The first quarter is traditionally the one in which government expenditure is at its peak so the effects of government spending cuts should tail off as the year progresses. The group was, in any case, playing down the effect of the spending cuts, saying: "This downturn in product sales has not had anywhere near the same effect on our contribution and even less impact on our profitability."The UK services new business pipeline for the rest of the year "looks promising" due to contracts already won, but not yet started, as well as prospects. "Additionally, we are managing to implement new contracts at improved margins, when compared to the past," the company added.As for Germany, that market bounced back in comparison with the first quarter of last year, which was a tough one. Product revenue growth was 28% year on year (yoy), while services growth was 9%.In France, services revenue increased by 10% and product revenue grew by 22% yoy.At the end of the first quarter the company has net cash, excluding customer specific financing (CSF) of around £120m, down from £139m at the end of 2010. Net cash including CSF was about £94m, down from the year-end figure of £111m. "We remain confident that 2011, as a whole, will be another year of improvement for Computacenter's performance. Our services growth is solid across the group and we have again benefited from our portfolio of countries, in the product business. While much remains to be done, we are trading in-line with management expectations for the year," the company said. ---jh