Trading Update - 17 January 2013
Computacenter plc ("Computacenter"), the independent provider of IT infrastructure services and solutions, is today holding an investor and analyst conference call to provide an update on trading for the year ended 31st December 2012 ("the year").
The Group will announce its results on 12th March 2013, which are anticipated to be marginally ahead of the Board's expectations for the year.
Group revenue for the year increased by 2% on a reported basis and 6% in constant currency. These growth rates include the impact of acquisitions during 2011, which, at a Group level, was minimal. Group Services revenue increased by 8% on a reported basis and 12% in constant currency. Group Supply Chain revenue was flat on a reported basis with an increase of 4% in constant currency. Focusing on the fourth quarter, we saw an increase in our Group Services revenue of 6% in constant currency and an increase in Group Supply Chain revenue of 5% in constant currency.
At the end of the period, net cash excluding customer-specific financing ("CSF") was £150 million [£136.8 million at 31st December 2011]. Including CSF, net cash was £131 million [£113.7 million at 31st December 2011]. The year-end cash position continues to benefit by approximately £35 million [£45 million at 31st December 2011], from the extended credit facility provided by one of our major suppliers. We are pleased with the year-end cash position, particularly given some short term working capital demands during the year relating to the ongoing business growth and our, now completed move to a new warehousing facility in France. We have also made significant capital investment in the business, particularly in relation to new systems, logistics facilities, service desk capability and remote management in order to sustain our growth.
UK revenue grew by 9% for the year, with Services revenue increasing by 15% and Supply Chain revenue growing by 5%. In the fourth quarter, Services revenue grew by 13% with a 9% growth in Supply Chain. Services growth has remained strong throughout the year, due to new contract wins and high rates of retention. We have been particularly pleased with our successful business take-ons, both from a customer service and financial perspective. As previously explained, whilst Supply Chain margins have been slightly weaker than a year ago, we are extremely pleased with customer demand in the fourth quarter, which is encouraging for the start of 2013.
German revenue, in constant currency, increased by 4% for the year as a whole, with 8% growth in Services and 2% growth in Supply Chain. In the fourth quarter, Services revenue in constant currency decreased by 4%, whilst Supply Chain grew by 4%. The stronger Supply Chain growth in the fourth quarter, relative to the rest of the year, owes much to the extremely challenging comparisons, particularly in quarter two. Our main focus in Germany in recent months has been to stabilise our new contract take-ons, which proved to be financially challenging in quarter two and particularly quarter three of 2012. We are pleased to report that our performance in the fourth quarter has significantly improved and while much remains to be done, we anticipate further progress in the months ahead.
In France, revenue in constant currency grew by 7%, with 18% growth in Services revenue and 5% growth in Supply Chain revenue. The Supply Chain growth rate is flattered somewhat by our acquisition in 2011, but the Services growth has been unaffected. As previously highlighted, there have been some challenges in 2012, including our office move, relocation of our logistics facilities, completion of our acquisition integration and coping with the significant Services growth, which have impacted our margins. However, these factors represent major steps forward in enhancing Computacenter France's credibility in the market and in delivering both a sustainable and acceptable return. In the second half of 2013, our largest French customer will go through a periodic renewal, but this should be offset by improvements elsewhere.
Computacenter UK has entered 2013 in good shape, with a strong Services pipeline. We expect to make further progress in improving the performance of our problem contracts in Germany, where we will focus primarily on margin improvement. While it is too early to make predictions about 2013, we enter the year optimistic that the Group will make progress.
Computacenter will announce full year results for the year ended 31st December 2012 on Tuesday, 12th March 2013.
Mike Norris, Chief Executive 01707 631601
Tony Conophy, Finance Director 01707 631515
Tessa Freeman, PR Manager 01707 631514
Tulchan Communications 020 735 34200
Christian Cowley and Rebecca Scott