Computacenter trading is curate's egg

Good in parts

Computacenter, the UK's biggest IT reseller, today issued a curate's egg of a trading statement for the year ended December 31.

First - the bad parts.

• Market conditions (Computacenter is also big in France) were were than expected, deteriorating since August 2001, when it reported its interims.
• Product supply revenue fell 28 per cent compared with the first half of 2001. In the mid-1990s, Computacenter sold one in five Compaqs and one in four IBM PCs in the UK. If it retains anything like this market share (the company only has SCC breathing down its neck), that augurs poorly for these manufacturers.
• Market conditions are not expected to improve materially in the short term. And it is too soon to forecast the outcome of 2002.

Now for the good parts.

• Computacenter will meet analyst FY profit projections (consensus is £52m post BIOMNI, pre-exceptionals).
• Improved service revenues means higher margins and greater resilience - the company says - when faced with a market downturn. The improved margin mix goes a long way to mitigate tumbling product sales.
• The integration of GE Capital Information Technology Services in the UK carries on apace. And the company is out of Germany, where it was too small to compete against GECITS. Computacenter is exercising its option to buy the services business of GECITS France, which will complete next month.

Full results are due in March.