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09/09/2020

Computacenter plc - Interim results for the six months ended 30 June 2020

Computacenter plc ("Computacenter" or the "Group"), a leading independent technology partner trusted by large corporate and public sector organisations, today announces results, based on unaudited financial information, for the six month period ended 30 June 2020.

 

Financial Highlights

 

H1 2020

H1 2019

Percentage

Change

Increase/

(Decrease)

Financial Performance

       

Services revenue (£ million)

594.4

595.7

(0.2)

       

Technology Sourcing revenue (£ million)

1,867.8

1,831.3

2.0

       

Revenue (£ million)

2,462.2

2,427.0

1.5

       

Adjusted1 profit before tax (£ million)

74.6

53.5

39.4

       

Adjusted1 diluted earnings per share (pence)

46.7

34.5

35.4

       

Dividend per share (pence)

12.3

10.1

21.8

       

Profit before tax (£ million)

72.4

50.8

42.5

       

Diluted earnings per share (pence)

45.3

33.2

36.4

       

Cash Position

     
       

Cash and cash equivalents (£ million)

222.1

114.3

 
       

Adjusted net funds/(debt)3 (£ million)

149.1

(3.1)

 
       

Net funds/(debt) (£ million)

24.3

(114.1)

 
       

Net cash inflow/(outflow) from operating activities (£ million)

47.0

(1.1)

 

Reconciliation to Adjusted1 Measures

 

   

Adjusted1 profit before tax (£ million)

74.6

53.5

 
       

Exceptional and other adjusting items:

     
       

Costs related to acquisition (£ million)

-

(0.5)

 
       

Amortisation of acquired intangibles (£ million)

(2.2)

(2.2)

 
       

Profit before tax (£ million)

72.4

50.8

 

 

Operational Highlights:

The Group's total revenues grew 1.5 per cent during the first half of the year, and by 0.6 per cent in constant currency2. Significant reductions in expenditure from industrial customers have been offset by new business within the government and financial services sector. COVID-19 related cost reductions and improving Services and Technology Sourcing margins has resulted in an increase in adjusted1 profit before tax of 39.4 per cent during the period.

  • The UK saw an increase in revenues of 7.2 per cent as Technology Sourcing revenues surged to cope with the demand generated by the COVID-19 crisis. Strong Services margins, due to increased utilisation and reduced external contractor costs and improving Technology Sourcing margins have resulted in an increase in adjusted1 operating profit of 95.3 per cent during the period.

  • Germany saw overall revenues decline by 2.8 per cent with falls in Managed Services and Technology Sourcing partially offset by another strong performance in Professional Services. The increase in Professional Services volumes, at higher margins, coupled with overall margin improvements and static administrative expenses have resulted in an increase of 15.4 per cent in adjusted1 operating profit, on a constant currency2 basis.

  • France has had a difficult start to the year, being more impacted by a slow-down of its large industrial private sector customer base and the downturn in its Services business which resulted in flat revenues but decreasing gross profits and a reduction in adjusted1 operating profit of 55.2 per cent on a constant currency2 basis.

  • The USA saw a slowdown in the second quarter with a marked reduction in activity by its higher-margin mid-market customer base which resulted in flat revenues for the period overall in constant currency2. Significantly reduced administrative expenses as part of a broader programme in the USA that began before, but was accelerated by, the COVID-19 pandemic, have contributed an increase of $4.3 million in adjusted1 operating profit for the six months to 30 June 2020 against a poor comparative period.

The Group has experienced significant operational and financial impacts from the unprecedented effect of the COVID-19 crisis. All results in these Interim Report and Accounts include these COVID-19 impacts and no attempt has been made to adjust for or exclude these impacts whether they be positive or negative. Further information on the COVID-19 impacts on the Group, and our response, can be found within the CEO's Performance Review contained within this announcement. The continued adoption of the going concern basis by the Directors in the preparation of the Interim Condensed Consolidated Financial Statements is set out on within the notes to the summary financial information contained within this announcement.

A reconciliation to adjusted1 measures is provided within the Group Finance Director's review contained in this announcement. Further details are provided in note 4 to the summary financial information contained within this announcement.

 

 

As previously stated, our business has performed well this year to date and proven to be flexible in these extraordinary times.

While nothing can be taken for granted, it is the Board's view that, based on current business activity levels, our adjusted1 profit before tax for the year is unlikely to be less than £180 million. We feel it is important to give specific guidance given the broad range of market expectations concerning our likely results.

Obviously, our markets have proved resilient as our customers have invested in their infrastructure to support their businesses, they have utilised the skills of our people and we have managed our cost base.

It is impossible to predict exactly how the world will recover in 2021, and beyond, and the implications for our customer base. We do believe that our customers will continue to invest in technology and that we have built a substantial reseller business with the largest service capability of any reseller in the world and the most substantial international footprint which should enable us to deliver a reliable and consistent business for our customers, employees and shareholders.

Mike Norris , Chief Executive of Computacenter plc

 

1Adjusted operating profit or loss, adjusted net finance income or expense, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss, adjusted earnings per share and adjusted diluted earnings per share are, as appropriate, each stated before: exceptional and other adjusting items including gain or losses on business acquisitions and disposals, amortisation of acquired intangibles, utilisation of deferred tax assets (where initial recognition was as an exceptional item or a fair value adjustment on acquisition), and the related tax effect of these exceptional and other adjusting items, as Management do not consider these items when reviewing the underlying performance of the Segment or the Group as a whole. A reconciliation to adjusted measures is provided within the Group Finance Director's review contained in this announcement which details the impact of exceptional and other adjusted items when compared to the non-Generally Accepted Accounting Practice financial measures in addition to those reported in accordance with IFRS. Further detail is provided within note 4 to the summary financial information contained in this announcement.

2 We evaluate the long-term performance and trends within our strategic objectives on a constant currency basis. Further, the performance of the Group and its overseas Segments are shown, where indicated, in constant currency. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information gives valuable supplemental detail regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period average exchange rates and comparing these recalculated amounts to our current period results or by presenting the results in the equivalent local currency amounts. Wherever the performance of the Group, or its overseas Segments, are presented in constant currency, or equivalent local currency amounts, the equivalent prior-period measure is also presented in the reported pound sterling equivalent using the exchange rates prevailing at the time. 2020 interim highlights, as shown above are provided in the reported pound sterling equivalent.

3 Adjusted net funds or adjusted net debt includes cash and cash equivalents, other short or other long-term borrowings and current asset investments. Following the adoption of IFRS 16 this measure excludes all finance lease liabilities. A table reconciling this measure, including the impact of finance lease liabilities, is provided within note 12 to the summary financial information contained in this announcement.

 

Read the full report
For further information, please contact: 
Computacenter plc.
Mike Norris, Chief Executive                01707 631 601
Tony Conophy, Finance Director        01707 631 515
www.computacenter.com

Tulchan Communications                020 7353 4200
James Macey White
www.tulchangroup.com

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