UK remains a drag on Computacenter growth

14th Oct 2011 07:50

Information technology services provider Computacenter is on track to meet its full-year targets after third quarter continued on much the same lines as the first two quarters.Revenue growth for the quarter, on a reported basis, increased by 5% to £652m from £621m in the corresponding quarter of last year, but this included contributions from recent acquisitions; with those contributions stripped out, revenue declined by 1% year-on-year (YOY).Revenue growth in the first nine months of the year was 6% to £2.02bn from £1.90bn in the first nine months of 2010. With the effects of acquisitions excluded, revenue grew 2% from last year. Group Services revenue grew by 6% YOY in the third quarter, including acquisitions, and by 2% excluding acquisitions, bringing the year-to-date position to 6% and 4% respectively. Group Product revenue grew by 4% YOY in the third quarter, including acquisitions, with a decline of 3% excluding acquisitions, bringing the year-to-date position to a growth rate of 6% and 1% respectively.Revenue in the UK declined by 15% YOY to £234m, with the Product division's revenue tumbling 20%, though this represents an improvement on the 22% YOY decline seen in the first half of the year. The group said the fall-off can largely be accounted for by a shift in the spending profiles of some of its larger customers.Services revenue in the UK fell 6% YOY, a decline solely attributable to the Professional Services business, where a fall-off in large construction projects has caused a slump in demand for cabling.The picture is brighter in Germany and France, which saw revenue growth rates in the third quarter of 19% and 28% respectively, though France would have seen a 2% decline in revenues YOY had it not been for the effects of the company's recent acquisition in the country.On the subject of acquisitions, the group said its purchase of Switzerland-based Damax in the third quarter is looking like a winner, with the company trading ahead of expectations.At the end of the third quarter, net cash excluding customer specific financing was roughly £101m, compared to £107m at the end of third quarter of 2010 and £139m at the end of December 2010. "The prospects within the new business pipeline that we referred to in the group's interim results have either reached a successful conclusion, or are progressing encouragingly," Computacenter said. "While there are clearly no certainties, we are confident that 2011 will prove to be the most successful year in Computacenter's journey by delivering record growth rates in our contractual services business that will underpin growth in the years ahead," the statement concluded. --jh