Computacenter profits hit by costs of German contracts

Computacenter posted a drop in 2012 profits as the IT company invested heavily in France and underestimated the cost of projects in Germany.

Computacenter posted a drop in 2012 profits as the IT company invested heavily in France and underestimated the cost of projects in Germany.

Pre-tax profits came to £64.8m for the year to December 31st, down 10.1% from £72.1m in 2011. Diluted earnings per share decreased by 17.6% to 32.4p, compared to 39.3p the year earlier.

Chairman Greg Lock said last year the company "stumbled in Germany, invested significantly in France and reaped the reward of three years of building and investing in the UK".

"We were disappointed with our underestimations of the resource demands and associated costs of starting a significant number of contracts simultaneously in Germany," he said.

"Taken together with our out-performance in the UK, the impact upon our potential earnings was approximately £7.5m."

Nevertheless, group revenues grew 2.2% to £2.91bn, buttressed by an increase in contracts.

The group annual services contract base rose 11% in constant currency to a record £615m, with strong performance in the UK where adjusted operating profit increased 40.2% to £52.2m.

A total dividend of 15.5p per share was issued to shareholders, up 3.3% from the previous year.

During the course of 2013, the company intends to return up to £75m to shareholders, in addition to the normal dividend.

"We expect 2013 to be a year of progress for Computacenter," said Chief Executive Officr, Mike Norris.

"While the group financial outcome for 2013 will be dependent on the in-year performance of Germany and the speed at which we recover from our problem contracts, which is unpredictable, we are confident that these contracts will improve.

"More importantly, winning, contracting and taking on new contracts successfully, is more fundamental to the long-term growth of the business and its strategic development. This will be underpinned by our new group operating model, which has taken effect in the UK and Germany, since the start of 2013."

RD

Recommended

Get healthy returns from these three healthcare stocks
Share tips

Get healthy returns from these three healthcare stocks

Professional investor Paul Major of the BB Healthcare Trust highlights three of his favourite healthcare stocks.
25 Oct 2021
Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Emerging markets: the Brics never lived up to their promise – but is now the time to buy?
Emerging markets

Emerging markets: the Brics never lived up to their promise – but is now the time to buy?

Twenty years ago hopes were high for Brazil, Russia, India and China – the “Brics” emerging-market economies. But only China has beaten expectations. …
18 Oct 2021