Computacenter warns on profits after softer end to Q3

28th Oct 2024 07:55

(Sharecast News) - Computacenter downgraded its full-year profit guidance on Monday after a softer-than-expected end to the third quarter.

In an update for the third quarter to 30 September, the company said it continues to expect to deliver a second half "comfortably ahead" of last year. However, after a softer end to Q3 than expected and amid a backdrop of "prudent" corporate spending, full-year adjusted pre-tax profit on a constant currency basis is expected to be "modestly behind" last year.

At current exchange rates, Computacenter expects a negative £7-8m translation impact on adjusted pre-tax profit in FY 2024.

The company said its performance in Q3 was broadly in line with the prior year. After a strong start to the quarter, Technology Sourcing volumes in September were below its expectations, it said, mainly due to "a more cautious" corporate spending environment and slower completion of committed product orders in North America.

Computacenter's overall performance in Germany met its expectations, while the UK was ahead of last year but below its expectations.

"During the quarter Technology Sourcing revenue increased driven by North America, as we continued to execute the orders won during the first half," it said. "However, certain US shipments are now expected to be completed in Q4 and early 2025. We are encouraged by further good order intake in the US during the period.

"Services revenue during the quarter increased year on year with strong revenue growth in Professional Services outweighing a decline in Managed Services."

Computacenter said it has made good progress with its £200m share buyback programme, which began in late July, and has completed £191.7m to date.

"Following the completion of the buyback we expect to maintain a strong balance sheet with positive adjusted net funds," it said.