Computacenter pulled down by France and Germany

Price erosion

By John Oates • Get more from this author

Posted in IT Channel, 7th September 2004 10:09 GMT

Computacenter revenues for the six months ended 30 June 2004 are unchanged at £1.25bn. Profits rose slightly to £33.2m, up from £32m for the same period of 2003.

The reseller blamed continued pressure on prices for the static turnover. Profits in Germany fell to £2.5m from £3.2m in 2003 and France posted a loss of £1.5m, slightly less than last year. The programme of turning round both businesses is continuing and chairman Ron Sandler expects positive results in both countries.

He said the full year outlook "remains in line with market expectations...the core UK franchise remains healthy, with continued growth prospects in Managed Services. We are working hard to deliver the turnaround of our European operations."

Market conditions remain challenging. The firm saw an increase in spending from financial services companies, but this merely offset a fall in central government spending. Price competition is fierce with increasing commoditisation of products. Computacenter continues to try and streamline its sales process to protect margin.

Computacenter attributes profit protection to managed services. UK revenue growth from the business unit was 18.7 per cent, compared with 10.7 per cent growth for the whole 2003. The company has "an encouraging pipeline of Managed Services opportunities for the remainder of the year".

Press release here. ®