REG - Computacenter - Half Year Pre-Close Update <Origin Href="QuoteRef">CCC.L</Origin>

ComputacenterAnnouncement

06/09/2014 16:46

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RNS Number : 5485M
Computacenter PLC
17 July 2014 
 
Computacenter plc 
 
Trading Update - Overall trading ahead of last year and in line with
expectations 
 
17th July 2014 
 
Computacenter plc ("Computacenter" or the "Group"), the independent provider
of IT infrastructure  services that enables users is today providing an update
on trading based on preliminary unaudited financial information for the six
months ended 30 June 2014, in advance of the announcement of its interim
results on Friday, 29 August 2014. 
 
Group 
 
Group revenue for the first half increased by 2% on an as reported basis and
by 4% in constant currency. Group Services revenue increased by 3% on an as
reported basis and by 5% in constant currency. Group Supply Chain revenue
increased by 2% on an as reported basis and by 4% in constant currency. 
 
UK 
 
UK revenue grew by 14% in the first half of the year with Services revenue
increasing by 8% and Supply Chain revenue increasing by 18%.  We remain
pleased with the continued strong performance in the UK business, particularly
the Services growth.  Whilst the Supply Chain revenue growth was not as strong
in the second quarter as in the first, as expected, growth was still 9%.  We
have managed to secure a significant renewal of a major customer contract
within our Contractual Services business in the second quarter and we are
pleased to be at the exclusive stage, subject to contract, on a major new
contract.  We are also optimistic about our pipeline for the remainder of the
year. 
 
Germany 
 
German revenue fell by 10% in constant currency during the first half, with a
2% increase in Services revenue and 16% reduction in Supply Chain revenue.
Whilst we are disappointed with the Supply Chain revenue reduction, a
significant percentage of the reduction relates to one low margin software
licence of circa £25 million sold in the second quarter of 2013 and not
repeated this year. 
 
More significantly we are beginning to see some progress with our Services
business in Germany.  We are starting to deliver some new contract wins which
is likely to increase the growth rate going forward.  We are pleased with our
Professional Services sales and our Services margin continues to improve.  Our
three onerous contracts continue to perform in line with the provision
previously made for them. 
 
France 
 
French revenue increased by 14% in constant currency in the first half of the
year, with Services revenue increasing by 3% and Supply Chain revenue
increasing by 17%.  Whilst this Supply Chain revenue growth is flattered due
to an extremely quiet June 2013, as we migrated to our Group ERP system, it is
testament to the delivery of an improved customer experience and the fact that
our systems issues in France are now behind us. However, gross margins have
been challenging, particularly in Services. 
 
We are uncompetitive in France and in order to improve long term
profitability, we need to address our cost base.  We expect to incur an
exceptional restructuring charge of circa £9 million, which is at the top of
the range previously announced in our April 2014 Interim Management
Statement. 
 
Financial Position 
 
Group net funds excluding customer specific finance (CSF) increased by
slightly over £30 million from £39 million to approximately £69 million. 
 
The 30 June 2013 figure of £39 million provided above excludes the effect of
the £75 million of cash returned to shareholders during 2013, £44 million of
which was returned in July 2013, in order to show a like-for-like comparison
against the cash position as at 30 June 2014. 
 
Outlook 
 
For the first half of 2014 Computacenter will show progress over the same
period for last year. This has been delivered by a strong performance in the
UK held back somewhat by the performance in France and Germany much of which
was as expected. 
 
We are confident that the momentum that we have in the UK will continue for
the foreseeable future due to our P&L investment in organic growth and a
strong pipeline. Whilst we have been somewhat surprised and disappointed by
our Supply Chain performance in Germany so far this year, we are starting to
see some real improvement in our Services prospects which is strategically
more important. 
 
New management is now in place in our French business and we have rolled out
the Group Operating Model but work needs to be done to create a profitable and
sustainable business. 
 
We remain on track with the Board's expectations for 2014 and confident about
the growth prospects for the long-term. 
 
Enquiries: 
 
Computacenter plc 
 
Mike Norris, Chief Executive:                    01707 631601 
 
Tony Conophy, Finance Director:            01707 631515 
 
Tulchan Communications 
 
James Macey White                                     020 7353 4200 
 
Christian Cowley 
 
Conference call 
 
There will be a conference call for analysts and investors this morning at
9.00am. 
 
Appendix 
 
Revenue growth summary by segment for Q2 2014 vs Q2 2013 and H1 2014 vs H1
2013 
 
                                                                                                                     
   Change vs 2013          Q2 Change     Q2 Change Constant Currency    H1 Change     H1 Change Constant Currency    
                           As Reported                                  As Reported                                  
                                         
                                         
                                                                                                                     
   Supply Chain Revenue                                                                                              
   UK                      9%            9%                             18%           18%                            
   Germany                 -27%          -25%                           -18%          -16%                           
   France                  17%           21%                            13%           17%                            
                                                                                                                     
   Group                   -5%           -3%                            2%            4%                             
                                                                                                                     
   Services Revenue                                                                                                  
   UK                      9%            9%                             8%            8%                             
   Germany                 -2%           1%                             -2%           2%                             
   France                  9%            12%                            0%            3%                             
                                                                                                                     
   Group                   4%            6%                             3%            5%                             
                                                                                                                     
   Total Revenue                                                                                                     
   UK                      9%            9%                             14%           14%                            
   Germany                 -19%          -16%                           -13%          -10%                           
   France                  16%           20%                            11%           14%                            
                                                                                                                     
   Group                   -2%           0%                             2%            4%                             
                                                                                                                     
 
 
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