Computacenter warns weak US dollar could wipe £4m from profits this year

Reseller giant however says it is "extremely pleased" with profit growth in Q1 and gives optimistic outlook for year ahead

Computacenter says it is "extremely pleased" with its profit growth in Q1 in a trading update issued today, despite warning that a weak US dollar will put pressure on profits this year.

The Hatfield-based reseller says there has been a "strong demand across the business" - especially for its professional services business in both the UK and Germany as well as strong revenue growth for its Technology Sourcing business in the UK.

Computacenter added that its US operations and the recently acquired Pivot TS business have performed "ahead of expectations" and remain on track despite there still being "a lot of work to do".

But the company statement warned that the weakness of the US dollar puts unavoidable pressure on its US business and is expected to impact full year profit "by approximately £4m" if it stays at its current level.

The business's other recent acquisition, BT Services France which has now been renamed Computacenter Network and Systems, is still making a loss but performed "in line with expectations" with integration still on track, Computacenter claims.

Computacenter's share price fell by more than six per cent as markets opened this morning to 2,528 GBX but later rallied back up to 2,632 GBX.

"Due to the strong organic profit performance we expect 2021 to be a year of good progress in our reported profits," the statement added.

"Although we will generate incremental positive growth from the Pivot acquisition in 2021, this will be almost negated by currency movements (if the current exchange rates remain the same) and the expected losses from our French acquisition.

"Obviously, we are living through unpredictable times and much work remains to be done, but our good performance in Q1 and our internal forecast for the rest of the year gives us a great deal of confidence in our likely outcome."