As UK fades slightly, rest of Europe rises
A strong performance in Germany and steady growth in France have led to a good first quarter being reported by IT services group Computacenter.
The company has issued a trading update for the three months up to 31 March, saying it expects the group's performance for 2017 as a whole will “exceed current market expectations”. This is due to “buoyant” market conditions, “particularly in our German business, backed up by steady progress in France”, said Computacenter.
Computacenter said it also benefited from favourable currency movements. Total group revenue for the first quarter increased by 16% on an as reported basis and by 9% in constant currency. Group services revenue increased by 14% on an as reported basis and by 7% in constant currency. And group supply chain sales increased by 17% on an as reported basis and by 11% in constant currency.
Total UK sales actually reduced by 1%, with services revenue increasing by 4% and supply chain sales being down 4%. But German revenue increased by 23% for the first quarter, with services revenue increasing by 8% and supply chain revenue jumping 31% - all in constant currency. In France, sales increased by 6%, with an increase of 22% in services and a 2% rise in supply chain sales, all in constant currency.
Computacenter said: “We are encouraged by the group's performance in the first quarter in all our major geographies, but particularly in Germany. Our customers' drive to digitalise their operations is creating significant demand, particularly for our professional services and supply chain businesses. This is currently more than compensating for the pressure exerted by customers to reduce long term support costs, that has a potential negative effect on our managed services business.”
Peter Roe, an analyst at TechMarketView, said of the trading update: “This is an incredibly tough market, where a couple of contract wins can make a significant difference and can drive large swings in performance. Nevertheless, Computacenter management will be able to take substantial comfort from the recent performance in Germany and in the services market.”