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By | Paul Kunert 14th June 2012 08:54

Computacenter to hire 700 new bods to meet bulging service needs

Painful Euro plunge could impact its bottom, however

Computacenter (CC) is splashing £7m on hiring hundreds of personnel and investing in systems to underpin faster than expected growth in services, the London-based reseller giant confirmed this morning.

But surprises for investors didn't stop there: CC also warned that should the depreciation of the Euro against sterling remain at current levels the bottom line will be some £3m lighter at the end of calendar 2012.

Europe's largest reseller said services growth has "increased substantially" and according to unaudited numbers for Q2 is likely to be 15 per cent up on last year, "which is clearly an acceleration" on the 11 per cent it recorded in Q1.

The firm said there are no indications that this expansion will moderate as it is fuelled by contracts already won and a healthy new biz pipeline which "requires material investment through our P&L" to be delivered, the company chuckled.

"The take-on cost of this new business includes, but is not limited to, the recruitment of over 700 new services personnel and the transfer of many staff from customers and their historical suppliers," adds the CC statement.

On top of recruitment and training overheads and coughing sales commissions, which are predominantly paid upfront, the company stated that it was also putting money into back office and customer facing systems.

"These incremental investments to support our future growth are likely to cost Computacenter in the region of an additional £7m in 2012, compared to our previous expectations.

"It should also be noted that the depreciation of the euro against sterling, if it were to remain at current level, would impact Computacenter's profit in 2012 by approximately an additional £3m," the firm says.

Chief exec Mike Norris said in tinned quotes:

While we highlighted the necessity for investment in our statement of 18 April 2012, both the size and scope of the opportunities we have won have increased significantly, requiring us to invest further.

It would seem that the product side of the CC group is also heading in the right direction, with high single digit growth expected for the first half of the year ended this month.

In the last trading statement in April CC said the UK operation was hit by a spending "freeze" by banking customers.

But today it revealed that despite the continuation of this issue, and a slowdown in spending by the public sector in France, cap-ex projects "remains satisfactory". ®

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