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By | Brid-Aine Parnell 31st August 2012 15:07

Computacenter profit hit by start-up costs in Germany

'Growing pains impacted our bottom', groans chairman

Computacenter's shift towards IT services instead of products has started to pay off, giving revenues a boost, but first half results were still hit by the costs of catering to its new contracts.

"We are not pleased that we did not properly anticipate the operational impact of winning so many contracts at the same time," chairman Greg Lock said, "but growing pains are a challenge we have the financial strength to absorb."

The reseller is moving its focus onto contractual services instead of reselling products, a move that saw the group pull in revenue of £1.42bn, up 4.2 per cent in constant currency from the first half of last year, in line with its trading update in June.

Pre-tax profit for the group was £24m, a figure it said was impacted by start-up costs, particularly in Germany, to handle its new business.

"We suffered growing pains, particularly in Germany, during the first half of 2012," Lock said.

"The challenge of implementing multiple contracts simultaneously and delivering what our customers want, is leading us to spend an incremental £7 million on additional staff and related costs to ensure our future success."

Computacenter did particularly well in the UK, where revenue grew 5.7 per cent to £578m and operating profit rose 5.2 per cent to £17.6m. The group said it wants to see the same growth in its other operations.

"While we are clearly pleased with the services revenue growth in all countries, our success in business take-on in the UK must be replicated across the Group. This is not a simple or quick process and much work needs to be done," it said. ®

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