Computacenter PLC
10 January 2007
Computacenter plc
Pre-Close Trading Update
Computacenter is today providing an update on trading for the year ended 31
December 2006.
Group profit before tax for 2006 is expected to be in line with consensus market
expectations of £38.2 million before taking account of the exceptional charges
in France detailed below. Cash generation has been positive in the fourth
quarter and the year end net cash, excluding customer-based finance leases, will
be circa £25 million, before the funding of the Digica Group acquisition
announced on 4 January 2007.
Profitability in the UK improved steadily as the year progressed, even after
taking account of a £2 million adverse swing in relation to charges arising from
share-based payments. The main improvement in profitability came from better
product margins. Revenues from product sales were marginally reduced, reflecting
in part Computacenter's efforts to move away from low margin volume sales in
trade distribution. Services revenues grew modestly, with a strong performance
in Professional Services being offset by a small decline in contractual
services.
In Germany, the new datacentre shared services contracts signed in the first
half of 2006 have had a significant adverse impact on profitability,
particularly in the third quarter. These contracts performed better in the
fourth quarter, although they are not yet profitable. Elsewhere very good
trading has been evident in the fourth quarter, particularly in product sales.
The sales pattern appears to have been partly helped by customers buying ahead
of the VAT change at the end of the year, although it is too early to tell how
much of the improvement has resulted from this.
French performance improved in the second half of the year reflecting normal
seasonality patterns; however, there was also some underlying improvement. To
further reduce French losses in 2007, actions to decrease the cost base have
continued, resulting in an exceptional charge of slightly in excess of £2
million in 2006. In addition, an exceptional non-cash impairment charge of £2.5
million to write down the value of tangible fixed assets in France has also been
taken.
Computacenter will announce its preliminary results for the year ended 31
December 2006 on Tuesday, 13 March 2007.
Enquiries:
Computacenter plc
Mike Norris, Chief Executive 01707 631601
Tony Conophy, Finance Director 01707 631515
Tessa Freeman, PR Manager 01707 631514
Tulchan Communications 020 7353 4200
Andrew Grant
Stephen Malthouse
This information is provided by RNS
The company news service from the London Stock Exchange
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