Computacenter Shares Rose 1.5% on a Pre-Close Trading Update

The Computacenter plc (LON: CCC) share price rose 1.46% after releasing its pre-close trading update for the year ended 31 December 2023. The company expects to book another year of record-adjusted profits before tax. The impressive financial performance was coupled with cash generation that surpassed the company's initial expectations despite ongoing investments to nurture future growth.

The fiscal year 2023 is a testament to Computacenter's resilience and strategic agility, delivering a record-setting adjusted profit before tax amidst uncertain macroeconomic conditions. This achievement underscores the robustness of the Group's integrated Technology Sourcing and Services model and the advantages derived from its geographical diversity.

The Group's total revenue, calculated on a Gross Invoiced Income basis, saw a noteworthy increase of 12% in both reported and constant currency terms. This growth was primarily fueled by a vigorous expansion in Technology Sourcing, complemented by steady growth in Services. 

While the first half of 2023 witnessed an exceptional performance in Technology Sourcing, the latter half experienced an expected normalisation following the completion of specific projects. Despite ongoing inflationary pressures, the Group effectively managed margin recovery throughout the year.

Geographically, the performance of the Group varied, with notable strength in Germany and North America, counterbalancing a softer performance in the UK. This regional performance variation aligns with the Group's ongoing efforts to refine and enhance operations in specific markets.

From a financial standpoint, Computacenter demonstrated exemplary management of its inventory in the face of normalising industry supply chains post-pandemic. 

The effective management resulted in solid cash generation, with the Group's adjusted net funds (excluding IFRS16 lease liabilities) closing the year at an impressive £450 million, exceeding expectations. The Group anticipates the usual net outflows in the cash cycle extending to the end of March 2024.

Looking towards 2024, Computacenter faces an ongoing uncertain macroeconomic environment. However, the Group remains confident in its ability to compete effectively and gain additional market share.

In terms of operations, Technology Sourcing volumes are expected to normalise in 2024, especially following the completion of high-volume, low-margin projects in the first half of 2023. In the Services sector, continued growth is anticipated, with inflationary pressures likely to ease further.

Computacenter share price. 

The Computacenter share price rose 1.46% to trade at 2909.0p from Tuesday’s closing price of 2867.0p.