Hatfield, UK-based Computacenter reported a profit after tax on ordinary activities of GBP44.8m ($86m) for the 12 months ended December 31, 2004, down 3% from a profit of GBP46.3m ($88.9m) in 2003, on revenue that declined marginally to GBP2.46bn pounds ($4.72bn). At the end of the period, Computacenter increased its cash position to GBP139.2m ($267.3m) from GBP97m ($186.2m) in 2003.
The bottom line was affected by a GBP2.6m ($4.99m) one-off charge relating to a dilution in Computacenter’s holding in Biomni to 41.7% and the disposal of its Austrian business to S&T System Integration & Technology Distribution. During the year, Computacenter also decided to discontinue any further investment in Biomni.
In January 2005, Vienna, Austria-based S&T announced its intention to acquire Computacenter’s loss-making Computacenter Austria operation for an undisclosed sum, through which 220 people will transfer to S&T from offices in Vienna, Linz, Salzburg, Graz, Klagenfurt, and Innsbruck. The operation is expected to have revenue of 60m euros ($79.2m) in 2005, and S&T will become Computacenter’s IT services partner in Austria, and other central and eastern European countries where it does not already have a service partner. The deal is expected to close during March 2005.
Despite the flat revenue in the year, Computacenter claims to be experiencing strong demand within its managed services business, which it said was growing at 16.6% in the UK during the year, compared to growth of 10.9% in 2003. Deals during the year included projects for South Lanarkshire Council, Channel 4 Television and BAA. Computacenter does not break down its revenue from managed services, however it said that it is currently transferring these skills to its German business, and this now has a managed services contract base of GBP82.9m ($159.2m), which is up 28% on 2003.
On a geographical basis, France contributed an unacceptable financial performance, with operating losses widening 130% to GBP6.2m ($11.9m), on revenue that fell 7.4% to GBP300.4m ($576.8m). The company has now placed former head of UK sales and services delivery Chris Webb to lead the operation. Meanwhile, UK revenue declined slightly to GBP1.43bn ($2.75bn), Germany increased 3% to GBP655.5m ($1.26bn), and Benelux increased 21% to GBP21m ($40.3m).
The company said that the market for its core products business continued to decline between 12% and 15%. It also managed to renegotiate its hardware reselling deal with HP in November, although this will reduce full year 2005 profit by GBP10m ($19.2m), and it does not expect the IT infrastructure pricing environment to improve.
Commenting on the first two months of 2005, Computacenter said: Trading…has been subdued and below anticipated levels. However, given Computacenter’s seasonal sales patterns it is too early to know whether this will have any impact on the overall result for the year.
