Computacenter raises profit expectations

Norris: restructured business

Shares in IT services firm Computacenter rose six per cent today on the back of news that the firm's restructuring had been succesful.

The restructure saw the sale of the company's CCD trade distribution division last year as well as an ongoing cost reduction exercise.

The firm said it expects profits for 2009 to be "materially" ahead of consensus market expectations of £48.4m.

In an interim trading statement the firm said it had successfully reduced operating costs by almost £30m, almost twice what it forecast 12 months ago.

The firm said it has also seen a seven per cent growth in annual services contracts to £500m, as customers have sought to reduce their operating costs by outsourcing.

"The actions we have taken to restructure and focus our business have enabled us
to significantly reduce our costs and create a step change in our profits," said chief executive Mike Norris.

During 2009 the firm also invested £11m in an enterprise resource planning system that is due to go live in the second half of 2010.

In the UK, 2009 revenue fell 11 per cent to about £1.25bn, though overheads were reduced by about £23m.

In Germany there was also a decline in revenues of one per cent to €1.03bn, (£0.92m) though this translates into growth of about 11 per cent when converted into sterling.

In France overall profit performance also declined slightly when compared with 2008, but was ahead of internal expectations.