Computacenter plc ('Computacenter' or the 'Group'), a leading independent technology and services provider, today announces unaudited half year results for the six months ended 30 June 2024.
2024 Half Year results announcement
| Financial highlights | H1 2024 | H1 2023 | Change | Change in constant currency1 |
|---|---|---|---|---|
| Technology Sourcing gross invoiced income (£m) | 3,740.1 | 4,341.7 | -13.9% | -12.2% |
| Services revenue (£m) | 796.5 | 816.5 | -2.4% | -0.6% |
| Gross invoiced income1 (£m) | 4,536.6 | 5,158.2 | -12.1% | -10.3% |
| Technology Sourcing revenue (£m) | 2,307.3 | 2,768.4 | -16.7% | -14.8% |
| Services revenue (£m) | 796.5 | 816.5 | -2.4% | -0.6% |
| Revenue (£m) | 3,103.8 | 3,584.9 | -13.4% | -11.6% |
| Gross profit (£m) | 472.2 | 505.7 | -6.6% | -4.8% |
| Gross margin (%) | 15.2% | 14.1% | +111bps | |
| Adjusted1 operating profit (£m) | 81.1 | 118.5 | -31.6% | -30.0% |
| Adjusted1 profit before tax (£m) | 87.2 | 121.8 | -28.4% | -26.8% |
| Adjusted1 diluted earnings per share (p) | 55.0 | 73.5 | -25.2% | |
| Dividend per share (p) | 23.3 | 22.6 | +3.1% | |
| Net cash inflow from operating activities (£m) | 1.4 | 116.5 | -98.8% | |
| Adjusted1 net funds (£m) | 401.9 | 285.1 | +41.0% | |
| Statutory Measures | H1 2024 | H1 2023 | Change | |
| Operating profit (£m) | 78.4 | 121.5 | -35.5% | |
| Profit before tax (£m) | 84.0 | 122.8 | -31.6% | |
| Diluted earnings per share (p) | 52.9 | 76.5 | -30.8% | |
| Net funds (£m) | 287.8 | 164.8 | +74.6% | |
1Alternative performance measures (APMs) and other terms are used throughout this announcement. These are defined in full in the Appendix to this announcement.
Financial highlights
- Gross profit declined by 4.8% and adjusted PBT by 26.8% in constant currency driven by the expected normalisation of Technology Sourcing volumes against exceptionally strong comparatives, solid underlying performances in Germany and North America, softer UK market conditions and planned increased strategic investment in the half
- Strong balance sheet position with adjusted net funds increasing by £116.8m to £401.9m supporting a £200m return of capital by way of share buyback
Strategic and operational highlights
- Continuing to deliver our strategic priorities of growing our target market customers, scaling our activities and empowering our people
- Good progress in growing the number of customers generating over £1m of gross profit p.a., with a net 7 added across the Group since the year end, and 'podium' customers now totalling 190 (FY 2023: 183)
- In North America, new hyperscale and enterprise customer wins, with 8 'podium' customers added in the half; we remain excited about the scale of the long-term growth opportunity
- Product order backlog as at 30 June 2024 up 18.5% year on year in constant currency, and up 47.8% since 31 December 2023, driven by strong Technology Sourcing order intake in North America
- £17.6m of spend on strategic initiatives (H1 2023: £11.9m) to improve our capabilities, enhance productivity and secure future growth
Shareholder returns
- Interim dividend increased by 3.1% to 23.3p
- £200m share buyback programme commenced in late July given strength of balance sheet, and in line with our capital allocation policy; £66.1m completed to date
Outlook
- We have made an encouraging start to Q3 and, consistent with our July trading update, we expect stronger momentum in the second half underpinned by the size of our committed product order backlog and wider pipeline of opportunities. While we are mindful of the backdrop of continuing geopolitical and macro uncertainty across our markets we continue to expect to make progress in FY 2024 as a whole on a constant currency basis.
For further information, please contact:
Computacenter plc.
Mike Norris, CEO +44(0) 1707 631 601
Chris Jehle, CFO +44(0) 1707 631 346
Christian Cowley, +44(0) 1707 631 132
Investor Relations
www.computacenter.com
Teneo
James Macey White/ +44(0) 207 353 4200
Matt Low
www.teneo.com
Our performance in the first half largely reflected the expected normalisation of Technology Sourcing volumes against an exceptionally strong comparative. At the same time, we have executed well against our strategy by adding seven 'podium' customers in the half, broadening our customer base in North America. Professional Services has also delivered good growth, leveraging our experience in Germany into other markets.
We continue to invest in new systems and tools to ensure Computacenter's continued success while maintaining our strong track record of delivering shareholder returns. The previously announced £200m share buyback is ongoing, which will take the total value of capital distributed to shareholders, including ordinary dividends, to nearly £1bn since 2013.
We have made an encouraging start to our third quarter and continue to expect stronger momentum in the second half, resulting in progress in the full year on a constant currency basis. Overall we expect 2024 to be another year of progress with growth weighted to the second half, while continuing to invest for future growth. Looking further ahead, the combination of the strength of our integrated Technology Sourcing and Services model and our geographic diversity, gives us continued confidence in our long-term growth prospects.
Appendix:
Alternative performance measures
Alternative Performance Measures are used by the Group to understand and manage performance. These are not defined under International Financial Reporting Standards (IFRS) or UK-adopted International Accounting Standards (UK-IFRS) and are not intended to be a substitute for any IFRS or UK-IFRS measures of performance but have been included as Management considers them to be important measures, alongside the comparable Generally Accepted Accounting Practice (GAAP) financial measures, in assessing underlying performance. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures. The table below sets out the basis of calculation of the Alternative Performance Measures and the rationale for their use.
| Measure | Description | Rationale |
|---|---|---|
| Adjusted net funds and net funds | Adjusted net funds or adjusted net debt includes cash and cash equivalents, other short- or long-term borrowings and current asset investments. Following the adoption of IFRS 16, this measure excludes all lease liabilities recognised under IFRS 16. Net funds is adjusted net funds including all lease liabilities recognised under IFRS 16. | A table reconciling this measure, including the impact of lease liabilities, is provided within note 9 to the summary financial information within this announcement. |
| Adjusted (expense and profit) measures | Adjusted administrative expense, adjusted operating profit or loss, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss, adjusted earnings per share and adjusted diluted earnings per share are, as appropriate, are each stated before: exceptional and other adjusting items, including gains or losses on business acquisitions and disposals, amortisation of acquired intangibles, utilisation of deferred tax assets (where initial recognition was as an exceptional item or a fair value adjustment on acquisition), and the related tax effect of these exceptional and other adjusting items. Recurring items include purchase price adjustments, including amortisation of acquired intangible assets and adjustments made to reduce deferred income arising on acquisitions and acquisition-related items. Recurring items are adjusted each period irrespective of materiality, to ensure consistent treatment. Non-recurring items are those that Management judge to be one-off or non-operational, such as gains and losses on the disposal of assets, impairment charges and reversals, and restructuring related costs. | Adjusted measures exclude items which in Management's judgement need to be disclosed separately by virtue of their size, nature or frequency to aid understanding of the performance for the year or comparability between periods. Adjusted measures allow Management and investors to compare performance without these recurring or non-recurring items. Management does not consider these items when reviewing the underlying performance of the Segment or the Group as a whole. A reconciliation to adjusted measures is provided within the Chief Financial Officer's review, which details the impact of exceptional and other adjusted items when compared to the non-GAAP financial measures, in addition to those reported in accordance with IFRS. Further detail is provided within note 4 to the summary financial information within this announcement. |
| Constant currency | We evaluate the long-term performance and trends within our strategic KPIs on a constant-currency basis. The performance of the Group and its overseas Segments are also shown, where indicated, in constant currency. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. | We believe providing constant currency information gives valuable supplemental detail regarding our results of operations, consistent with how we evaluate our performance. |
| Free cash flow | Free Cash Flow is Cash Flow from Operations minus net interest received, interest and payments related to lease liabilities, income tax paid and gross capital expenditure. To measure the cash generated by the operating activities during the period that is available to repay debt, undertake acquisitions or distribute to shareholders. | |
| Gross invoiced income and IFRS revenue | Gross invoiced income is based on the value of invoices raised to customers, net of the impact of credit notes and excluding VAT and other sales taxes. Gross invoiced income includes all items recognised on an 'agency' basis within revenue, on a gross income billed to customers basis, as adjusted for deferred and accrued revenue. A reconciliation of revenue to gross invoiced income is provided within note 4 to the summary financial information within this announcement. IFRS revenue refers to revenue recognised in accordance with International Financial Reporting Standards including IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases'. | Gross invoiced income reflects the cash movements to assist Management and the users of the Annual Report and Accounts in understanding revenue growth on a 'principal' basis and to assist in their assessment of working capital movements in the Consolidated Balance Sheet and Consolidated Cash Flow Statement. This measure allows an alternative view of growth in adjusted gross profit, based on the product mix differences and the accounting treatment thereon. |
| Organic (revenue and profit) measures | In addition to the adjustments made for adjusted measures, organic measures exclude the contribution from discontinued operations, disposals and assets held for sale of standalone businesses in the current and prior period; exclude the contribution from acquired businesses until the year after the first full year following acquisition; and adjust the comparative period to exclude prior-period acquired businesses if they were acquired part-way through the prior period. Acquisitions and disposals where the revenue and contribution impact would be immaterial are not adjusted. | The results for the half year did not benefit from any acquisitions made since 1 January 2023, with organic revenue and reported revenue being equivalent. |
| Product order backlog | The total value of committed outstanding purchase orders placed with our technology vendors against non-cancellable sales orders received from our customers for delivery within 12 months, on a gross invoiced income basis. | The Technology Sourcing backlog, alongside the Managed Services Contract Base and the Professional Services forward order book, allows us visibility of future revenues in these areas. |
| Return on capital employed (ROCE) | ROCE is calculated as adjusted operating profit, divided by capital employed, which is the closing total net assets excluding adjusted net funds. | As an indicator of the current period financial return on the capital invested in the company. |
News Nieuws Neuigkeiten Actualités
TIME erkent Computacenter als een van 's werelds beste bedrijven voor duurzame groei
Awards
Cisco benoemt Computacenter tot Partner van het Jaar in tien categorieën
Awards
Computacenter is een marktleider in 2024 ISG Provider Lens™ Future of Work
Awards
2024 Half Year results
Building long-term value based on trust
Financial Results
