Computacenter Reports Steady Q3 Results Amid Cautious Spending Outlook
LONDON - Leading technology and service provider Computacenter plc reported a third-quarter performance that was close to last year's results. The company started the quarter strong, but stated that Technology Supply volumes fell short of expectations in September due to a more cautious corporate spending environment and delays in completing product orders in North America. Despite these challenges, the company's overall performance in Germany met expectations, while the UK performed better than last year, although it still fell short of the company's own projections.
For the quarter ending September 30, 2024, Computacenter saw an increase in Technology Supply revenues, particularly in North America, as the company continued to fulfill orders carried over from the first half of the year. However, some U.S. shipments are now expected to be completed in the fourth quarter and early 2025. The company also reported satisfactory order intake in the U.S. during this period.
Service revenues increased compared to last year; while Professional Services experienced significant growth, this offset a decline in Managed Services revenues. Computacenter also made significant progress in its £200 million share buyback program launched at the end of July, having completed £191.7 million of the buyback so far. The company expects to maintain a strong balance sheet and positive adjusted net funds following the completion of the buyback.
Looking at the full-year outlook, the fourth quarter is traditionally the most significant period for Computacenter in terms of revenue, and the company's committed product order portfolio remains strong and has grown since the end of the first half. Although the company anticipates a second half that will outperform last year, the softer end to the third quarter and cautious corporate spending have led to a projection that full-year adjusted pre-tax profit will slightly fall short of last year on a constant currency basis. At current exchange rates, Computacenter expects a negative translation effect of £7-8 million on adjusted pre-tax profit for the fiscal year 2024.
Despite these immediate challenges, Computacenter remains optimistic about long-term growth prospects, citing the strength and geographical diversity of its integrated Technology Supply and Services model. The company's next trading update is scheduled for January 28, 2025, with the announcement of a Pre-Close Trading Update.