Computacenter smashes £6bn in annual revenues for first time ever
UK revenue jumped by almost 10 per cent as spending patterns returned to more normal levels
Reseller giant Computacenter shattered £6bn in yearly revenues for the first time ever during 2021 as the company was lifted by its "highest growth in services revenue for the last 20 years".
Revenue for the full year jumped 23.6 per cent to £6.7bn with adjusted profit before tax of £255.6m - up 27.5 per cent from the year before. Adjusted diluted earnings per share was 165.6p, up 31 per cent.
The group's revenue for its Technology Sourcing segment surged 26.2 per cent to £5.3bn. Organic revenue growth excluding the impact of acquisitions was 11.5 per cent on a constant currency basis.
Services revenue climbed by 15 per cent to £1.5bn with professional services revenue up 29.9 per cent and managed services revenue increasing by 7.5 per cent. Without the impact of acquisitions, services revenue went up by 9.2 per cent on a constant currency basis.
Computacenter's share price rose by around 4.7 per cent this morning as the results emerged.
"The more than doubling of profits that Computacenter has achieved over the last three years has been the result of deliberate actions that we have previously taken to enable growth," CEO Mike Norris said.
"Our acquisitions in North America and Western Europe have materially increased our total addressable market. The organic investments we have made, including the expansion of our sales force, recruiting technical expertise and investing in systems to enhance our productivity, have been substantial.
"Collectively, these have put us in a position to take advantage of the ongoing buoyant market conditions, as our customers invest in digitalising their businesses."
What was behind the growth?
Computacenter said it had seen "significant increases in expenditure from industrial customers and hyperscale technology customers" which "complemented continuing business within the public and financial services sectors".
The group pointed to a reduction in the impact of Covid-19 costs along with "further improved services margins and stable technology sourcing margins" as key contributors to the rise in profit.
Technology Sourcing saw "significant demand for software and hardware" across the company's main operating geographies as customers "invested in new technology to support their businesses".
Supply shortages continued to prove an issue, Computacenter said, but claimed these had given the group an "opportunity to outperform" its competition thanks to its "well-developed supply chain".
Norris also pointed to Computacenter's "ability to recruit and retain employees" in professional services as key to its growth in that area.
The reseller's UK performance was instrumental to the overall improvement, with revenue jumping 9.9 per cent to £1.95bn and adjusted operating profit increasing 14 per cent during the year.
Technology Sourcing growth was driven by "robust public sector activity in the UK and Germany" and by the "industrial enterprise sector in the UK and Germany" as these sectors "returned to more normal spending patterns and expanded their requirements".
Computacenter also said the "rebound of the mid-market sectors in North America complemented the sustained growth seen in the hyperscale markets" while adding that customers across its geographies have invested in longer-term IT transformations.
The UK and Germany saw strong professional services growth while managed services saw "robust revenue" in all areas apart from France.
Managed services benefitted from the reduced impact of Covid-19 on operations with call volumes beginning to return to pre-pandemic levels while the company's field engineer workforce saw "significant increases in activity".
In the UK, Computacenter said it had seen professional services customers re-engage with its consultancy experts to assist their post-pandemic IT requirements.
But despite this, the company admitted that its France operations had a "slightly disappointing year" due to the impact of a "slower than anticipated return of volumes from its large industrial private sector customer base".
Future outlook
Norris and Computacenter provided an optimistic outlook for 2022 - predicting "a year of further progress".
"While we live in uncertain times and much work remains to be done, these investments and current market conditions make us confident that 2022 will be a year of further progress," Norris said.
"Given the profile of our profitability in 2021, we have a more challenging comparison in the first half of 2022 compared to the second, due to the fact that an abnormally high percentage of our profits came in the first half of the year.
"As a business, we feel as confident as we have ever been about our target market, competitive position and investment strategy, and we look forward to the future in 2022 and beyond with enthusiasm and excitement."