Summary Annual Report and Accounts 2017
Computacenter is a leading independent provider of IT infrastructure services.
To be the preferred IT provider, to enable users and their business in a digital world.
Computacenter’s mission is to maximise user productivity and the business value of IT, for enterprise and corporate organisations. In doing so, we deliver strong returns for our shareholders and enrich our employees’ careers.
Dividend per share [pence]
Statutory diluted earnings per share [pence]
Statutory profit before tax [£m]
Adjusted1 profit before tax [£m]
Adjusted1 diluted earnings per share [pence]
Managed for the long term
The annual Group Sales Kick Off event brings together Computacenter’s combined European sales force, to celebrate the successes of the previous year and look ahead to the challenges of the coming year.
At the event in Lyon on 3 February 2018, Greg Lock, Chairman of Computacenter for the last 10 years, was presented with his sales recognition jacket. The jackets are presented to people who have made significant contributions to sales over the course of their career.
The Chairman received his jacket from the sales force in recognition of Computacenter exceeding £100 million in adjusted1 profit before tax for the first time.
We have developed our global coverage to mirror our customers’ service requirements. As a result, we supply customers in more than 100 countries and support customers in more than 70 countries.
Computacenter has an integrated offer which provides three complementary entry points for our customers, giving us a balanced business portfolio and helping us to achieve long-term growth.
We deliver a set of proven and predictable solutions to optimise our customers’ technology. This enables them to change effectively and achieve their business goals.
Our revenue depends on our forward order book, which contains a multitude of short, medium and long-term projects.
Professional Services revenue [£m]
We determine our customers’ technology requirements and provide appropriate products and commercials to meet them, with complete service and support throughout the product lifecycle.
We earn revenue from large contracts, with thinner margins and lower visibility
Supply Chain revenue [£m]
We maintain, support, transform and manage our customers’ IT infrastructure and operations, improving the quality and flexibility of service and reducing costs.
Our revenue under contract has high visibility and is
long term and stable.
Managed Services revenue [£m]
Appetite to invest
As can be seen by our Supply Chain volume growth, and by the growth of some of our competitors, customers currently have the appetite to invest in new technology.
Whether this is to improve their competitiveness, enhance their users’ experience, develop new markets, strengthen their IT security or simply refresh legacy systems, the drive to digitalisation is strong across the customer base. However, along with this thirst for new technology comes an unerring desire to reduce the cost of their ongoing IT operations. These market drivers have a very positive influence on our Supply Chain and Professional Services businesses but create a challenge for our Managed Services revenue and margin – a challenge that we need to step up to.
Connecting everything up
Computacenter’s customers need to make digital work, so they can deliver their products and services more effectively, attract and retain talent, and drive growth.
To ensure we continue to meet their needs in a fast-changing and increasingly complex world, we have to do two things:
1.Stay abreast of changes in the global market
This section looks at the global megatrends that are changing our markets, considers our competitive environment and explains the dynamics of the key countries we operate in.
2.Innovate and deliver our customer offer, so we succeed in the market
In this section, we describe our portfolio of complementary service offerings, our global delivery capabilities and what makes us different.
Making all of the elements of our business model work together
Linking our strategy to market trends, customer offer, risk, performance and remuneration
Continuing to invest in our
The Group’s revenues increased by 16.9 per cent to £3,793.4 million (2016: £3,245.4 million), and were 12.0 per cent higher in constant currency2.
The Group made a statutory profit before tax of £111.7 million, an increase of 28.2 per cent (2016: £87.1 million).
In 2017, we saw another record year of progress for the Group with adjusted1 profit before tax exceeding £100 million for the first time. The Group’s adjusted1 profit before tax increased by 22.9 per cent to £106.2 million (2016: £86.4 million) and by 18.4 per cent in constant currency2.
The Group’s statutory diluted earnings per share increased by 27.2 per cent to 66.5 pence in 2017 (2016: 52.3 pence). The difference between statutory profit before tax and adjusted1 profit before tax primarily relates to the Group’s reported net gain of £5.7 million (2016: £1.4 million) from exceptional items. Further information on these can be found on page 51 of the Annual Report and Accounts 2017.
Adjusted1 diluted earnings per share, the Group’s primary measure, increased by 20.6 per cent to 65.1 pence.
Maximising shareholder value
The Group result was underpinned by an improving performance in France, another strong result in Germany and was supported by recovering UK revenues.
The Supply Chain performance in Germany was the story in 2017 which exceeded our expectations and has grown significantly from what was a very good year in 2016. This was well supported by similar strong Supply Chain growth in both the UK and France as customers invest in new technology, in particular in the Security, Networking and Digitalisation. Professional Services growth in the UK led the Group, based on several key contracts. Demand for our Professional Services resources in Germany has outstripped our capacity to service new customers and assist with difficult Managed Services business takeons. Managed Services growth was pleasing overall, although flat in the UK and with some difficult contracts in Germany reducing the expected margin.