It was a year of two halves for Computacenter, with a robust performance in the second half helping the business to deliver a decent performance.
Shares climbed by more than 10% on 18 March, despite the UK being described by the channel player as “disappointing”, largely on the back of the strength of the business in the US.
In a nutshell, gross profit increased by 1.2% in constant currency, with adjusted operating profit coming in 6.8% lower. The firm delivered record H2 adjusted operating profit, up 11.2%.
Overall, the business managed to increase the number of customers generating more than £1m of gross profit a year, with that happening across the UK, North America and Germany.
Examining the main parts of the business, the Technology Services arm saw gross invoiced income come in flat year-on-year (YOY) at £8.27bn. Things were better on the services side, with revenue improving by 2.12% to hit £1.63bn.
However, it was not those details in the results that saw shares climb by more than 10%, but the progress the firm was making in the US that excited investors.
In North America, the firm’s services revenues climbed by 27.1% and the technology sourcing improved by 8.1%. That growth was supported by contract wins with hyperscalers and enterprise customers. There were also signs that Computacenter viewed further opportunities this year in what it described as a “fragmented market”.
In contrast, the channel player found the UK performance “disappointing”, with the market for hardware continuing to be weaker than expected. The firm closed out the year with six major customer wins and with the elements being in place to bounce back in 2025.
For 2024, the UK delivered an increase of 2.5% in services revenue to £452.8m, but a decrease of 9.3% in technology sourcing gross invoiced income. Within the services operation, professional services grew at 19.4%, while managed services declined by 4.8%. Total revenue decreased by 4.6% to £1.15bn and gross profit fell by 8.0% to £230.8m.
Computacenter’s experiences of customers taking longer to sign off orders and dealing with the uncertainty caused by the general election were exacerbated by competition “sharpening” as a result of tougher conditions across the UK.
However, the firm did renew a six-year agreement worth around £1bn and grew the public sector business YOY. There was also strong demand emerging for AI-related infrastructure projects. The product order backlog on 31 December was £426.7m, which was a 17.1% increase on the previous period.
In Germany, total revenue came in roughly flat with professional services growth of 6.2%. Total gross invoiced income decreased by 4.9%, driven by a reduction in Technology Sourcing that could not be offset by the small growth in servicing.
Mike Norris, chief executive officer of Computacenter, described the results as a “solid performance” that had to be seen “in the context of a tough first-half comparative and a more challenging IT market”.
“Encouragingly, the second half was the most profitable in our history and was derived from our highest number of major customers. We executed well in North America, achieving another record year while Germany performed robustly. Technology Sourcing momentum improved through the year and we were particularly pleased with Professional Service’s double-digit growth.
“We are well-placed for progress in 2025, entering the year with a strong order backlog across all regions, an exciting opportunity set and a continued focus on helping our customers realise the transformative benefits of IT,” he added.
On 18 March, Bytes Technology Group shared a trading statement that indicated it had also experienced a strong second half to its year, which finished on 28 February, echoing the experiences of Computacenter.