CCC Computacenter Plc

 
TIDMCCC 
 
Pre Close Trading Update - 11th January 2011 
 
 
Computacenter  is  today  holding  an  investor  and  analyst conference call to 
provide an update on trading for the year ended 31st December 2010. 
 
The  Group's unaudited  adjusted* profit  before tax  for 2010 is expected to be 
towards the top end of the range of market expectations. 
 
At the end of the period, net cash excluding customer-specific financing ("CSF") 
was  GBP138.6 million [net cash of  GBP86.4 million at 31st December 2009].  Including 
CSF,  net cash was   GBP112.7  million [net cash of   GBP37.3 million at 31st December 
2009].  The  year-end cash position  continues to benefit,  by approximately  GBP38 
million [ GBP30 million at 31st December 2009], due to the extended credit facility 
from one of our major suppliers. 
 
2010 has  proved to  be a  year of  good progress  for Computacenter, as we have 
continued with the strong services growth of recent years, coupled with a return 
to  growth in  our product  supply business,  as customers  have invested in new 
infrastructures.  Additionally, cost reductions made predominantly in 2009, have 
increased  the operational leverage of the business.  Group revenue for services 
grew by 6% on an as reported basis and 8% in constant currency.  Product revenue 
grew  by 13% and 15% in  constant currency, when  you exclude the  effect of the 
disposal of CCD at the end of 2009, but including acquisitions. 
 
As  we expected at  the half year,  services growth increased  materially in the 
second  half, whereas  product revenue  growth remained  constant throughout the 
year,  with the decline of UK  Government expenditure compensated by accelerated 
growth rates in France and Germany. 
 
In  the UK, total revenue increased by 10%, excluding the effect of the disposal 
of  CCD. Services  growth for  the year  as a  whole, stood at 11%, boosted by a 
particularly pleasing growth in the second half, compared with the same period a 
year  ago.  UK product revenue, excluding the  effects of the disposal, showed a 
9% growth  for the full year, with a  4% growth in the second half.  This slower 
growth  in the second half is attributable to a slowdown in Government spend and 
an exceptional one off deal in late 2009, which creates a difficult comparative. 
 While  undoubtedly there has been some incremental revenue in quarter 4, due to 
the VAT increase in early 2011, we do not believe this is material. 
 
We  have  previously  highlighted  the  challenging first quarter experienced in 
Germany.   Market conditions  subsequently, continued  to strengthen  quarter on 
quarter  and over the remainder  of the year, we  have seen a strongly improving 
trend  in performance of the German business.  This improving trend has resulted 
in  overall revenue for the year, growing  by 12% in local currency and 8%, when 
excluding the effects of acquisitions.  Services growth for the year was 4%, but 
a  more pleasing 9%, in the second half,  alone.  Product revenue grew by 18% in 
the year, with a growth of 19% in the second half. 
 
Computacenter  France has  had its  most successful  year for  some time  and is 
likely  to report a  small operating profit,  for the year  as a whole.  Overall 
revenue  in local  currency grew  by 17%, with  services growing  5% and product 
revenue  growing by  20%.  Whilst services  revenue growth  has been more modest 
than  it has been for a while, it has been affected by the successful completion 
of  some contracts  and the  underlying performance  remains steady.  The French 
business  has achieved a significant turnaround over  the last few years and its 
progress  owes a lot  to the broadening  of its customer  base and growth in the 
services business. 
 
The  Group has made  clear progress in  2010.  Our customers' appetite to reduce 
operating costs is a key driver of sustainable growth for our Services business. 
 We  reported  12 months  ago  that  there  had been an improvement in corporate 
capital  expenditure  although  it  was  unclear  whether  this  was a temporary 
improvement,  or something  more fundamental.   It is  now clear  to us that the 
improvement has proved to be more fundamental. 
 
Mike   Norris,  CEO  of  Computacenter  commented:  "Customers  are  refreshing, 
upgrading,  improving and investing in their  IT infrastructures and we are well 
placed  to meet these needs.  The  growth of long-term services contract revenue 
remains  fundamental  to  the  long-term  success  for  Computacenter  and it is 
pleasing  to note that we  have seen approximately an  8% increase in the annual 
services contract base.  There was significant product revenue decline in 2009, 
mainly  due to the  economic environment.  However,  in 2010 we have seen strong 
product  revenue  recovery  and  we  anticipate  that  product revenue will grow 
steadily in 2011, subject to the overall economic environment." 
 
Computacenter  will announce full year results for the year ending 31st December 
2010 on Thursday, 10th March 2011. 
 
*adjusted  profit  before  tax  is  stated  prior  to  amortisation  of acquired 
intangibles. 
 
 
Enquiries: 
 
Computacenter plc 
 
Mike Norris, Chief Executive01707 631601 
 
Tony Conophy, Finance Director 01707 631515 
 
Tessa Freeman, PR Manager01707 631514 
 
Tulchan Communications                 020 7353 4200 
 
Christian Cowley 
Lucy Legh 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Computacenter PLC via Thomson Reuters ONE 
 
[HUG#1478554] 
 

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