Computacenter : Full Year Financial Results 2018

13/03/2019

Computacenter plc ('Computacenter' or the 'Group')

Final results for the year ended 31 December 2018

Computacenter plc ('Computacenter' or the 'Group'), the independent provider of IT infrastructure and services that enables users and their business, today announces audited results for the year ended 31 December 2018.

Financial Highlights	2018	2017	Percentage Change Increase/ (Decrease)
Financial Performance
Revenue(£ million)	4,352.6	3,793.4	14.7
Adjusted1profit before tax(£ million)	118.2	106.2	11.3
Adjusted1diluted earnings per share(pence)	75.7	65.1	16.3
Dividend per share(pence)	30.3	26.1	16.1
Statutory profit before tax (£ million)	108.1	111.7	(3.2)
Statutory diluted earnings per share (pence)	70.1	66.5	5.4
Cash Position
Cash and cash equivalents	200.4	206.6	(3.0)
Net Fund3(£ million)	57.3	191.2	(70.0)
Net cash flow from operating activities (£ million)	115.2	106.1	8.6
Revenue Performance by Sector
Services revenue (£ million)	1,175.0	1,157.2	1.5
Technology Sourcing revenue (£ million)	3,177.6	2,636.2	20.5
Reconciliation between Adjusted1and Statutory Performance
Adjusted1profit before tax(£ million)	118.2	106.2
Exceptional and other adjusting items:
Costs related to acquisition(£ million)	(5.7)	-
Release of provision for onerous German contracts(£ million)	-	1.4
Gain on disposal of an investment property (£ million)	-	4.3
Amortisation of acquired intangibles (£ million)	(4.4)	(0.2)
Statutory profit before tax(£ million)	108.1	111.7

Financial Highlights	Financial Performance

Financial Highlights	Revenue(£ million)
2018	4,352.6
2017	3,793.4
Percentage Change Increase/ (Decrease)	14.7

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Adjusted1profit before tax(£ million)
2018	118.2
2017	106.2
Percentage Change Increase/ (Decrease)	11.3

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Adjusted1diluted earnings per share(pence)
2018	75.7
2017	65.1
Percentage Change Increase/ (Decrease)	16.3

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Dividend per share(pence)
2018	30.3
2017	26.1
Percentage Change Increase/ (Decrease)	16.1

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Statutory profit before tax (£ million)
2018	108.1
2017	111.7
Percentage Change Increase/ (Decrease)	(3.2)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Statutory diluted earnings per share (pence)
2018	70.1
2017	66.5
Percentage Change Increase/ (Decrease)	5.4

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Cash Position
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Cash and cash equivalents
2018	200.4
2017	206.6
Percentage Change Increase/ (Decrease)	(3.0)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Net Fund3(£ million)
2018	57.3
2017	191.2
Percentage Change Increase/ (Decrease)	(70.0)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Net cash flow from operating activities (£ million)
2018	115.2
2017	106.1
Percentage Change Increase/ (Decrease)	8.6

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Revenue Performance by Sector
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Services revenue (£ million)
2018	1,175.0
2017	1,157.2
Percentage Change Increase/ (Decrease)	1.5

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Technology Sourcing revenue (£ million)
2018	3,177.6
2017	2,636.2
Percentage Change Increase/ (Decrease)	20.5

Financial Highlights	Reconciliation between Adjusted1and Statutory Performance
2018
2017

Financial Highlights	Adjusted1profit before tax(£ million)
2018	118.2
2017	106.2
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Exceptional and other adjusting items:
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Costs related to acquisition(£ million)
2018	(5.7)
2017	-
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Release of provision for onerous German contracts(£ million)
2018	-
2017	1.4
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Gain on disposal of an investment property (£ million)
2018	-
2017	4.3
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Amortisation of acquired intangibles (£ million)
2018	(4.4)
2017	(0.2)
Percentage Change Increase/ (Decrease)

Financial Highlights
2018
2017
Percentage Change Increase/ (Decrease)

Financial Highlights	Statutory profit before tax(£ million)
2018	108.1
2017	111.7
Percentage Change Increase/ (Decrease)

Operating Highlights

• The Group's total revenues grew £559 million during the year, £540 million in constant currency², to exceed £4 billion for the first time. FusionStorm joined the Group, contributing £3.0 million of adjusted¹ operating profit to the Group through the last three months of 2018
• Germany delivered another record performance with revenue growth of 8.3 per cent leading to a 14.5 per cent increase in adjusted¹ operating profit, both on a constant currency² basis. The German business opened a new Integration Center to address the growth in the Technology Sourcing
• The UK saw excellent revenue growth of 9.7 per cent, leading to an increase in adjusted¹ operating profit of 12.0 per cent
• Adjusted¹ operating profit in France rose 27.0 per cent on a constant currency² basis due to strong Technology Sourcing margins. Revenues were down by 4.1 per cent on a constant currency² basis due to the loss of a low margin Managed Services contract

Mike Norris, Chief Executive of Computacenter plc, commented:

'The Board's outlook remains in line with its expectation which was upgraded on 12 July 2018. While the second half of the year is a more difficult comparison to the first half, due to the outstanding performance in H2 2017, 2018 is proving to be a year of significant progress particularly for our Technology Sourcing business.

The buoyant market conditions are being driven by a number of factors specifically, but not limited to, the need to increase network capacity, the constant need for enhanced cyber security, workplace upgrades and a move to the cloud. While it is impossible to predict how long these buoyant market conditions will continue, most of these drivers have significant momentum.

As always Computacenter will continue to focus on the long term, investing in our business, innovating our offerings and enhancing our customer service. It is through delivering increased value and competitive offerings to new and existing customers which enables us to deliver shareholder value over the long term.'

1. Adjusted operating profit or loss, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss for the period, adjusted earnings per share and adjusted diluted earnings per share are, as appropriate, each stated before: exceptional and other adjusting items including gain or loss on business disposals, gain or loss on disposal of investment properties, 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, as Management do not consider these items when reviewing the underlying performance of the Segment or the Group as a whole. Additionally, adjusted gross profit or loss and adjusted operating profit or loss includes the interest paid on customer specific financing (CSF) which Management considers to be a cost of sale. A reconciliation between key adjusted and statutory measures is provided within the Group Finance Director's review included within this announcement. Further detail is provided within note 4 to the summary financial information included within this announcement, Adjusted measures.
2. We evaluate the long-term performance and trends within our strategic objectives on a constant currency basis. Further, the performance of the Group and its overseas Segments are 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. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period average exchange rates and comparing these recalculated amounts to our current period results or by presenting the results in the equivalent local currency amounts. Wherever the performance of the Group, or its overseas Segments, are presented in constant currency, or equivalent local currency amounts, the equivalent prior-period measure is also presented in the reported pound sterling equivalent using the exchange rates prevailing at the time. 2018 interim Financial Highlights, as shown at the beginning of this announcement, and statutory measures, are provided in the reported pound sterling equivalent.
3. Net funds includes cash and cash equivalents, CSF, other short or other long-term borrowings and current asset investments.

Read the full report
For further information, please contact:
Computacenter plc.
Mike Norris, Chief Executive 01707 631 601 Tony Conophy, Finance Director 01707 631 515
www.computacenter.com

Tulchan Communications 020 7353 4200
James Macey White
www.tulchangroup.com