FTSE 250 IT reseller Computacenter (CCC) said revenue and profit in the third quarter were ‘well ahead’ year-on-year as it continues to enjoy firm demand from customers across its markets.
That this strong revenue and profit growth is drawn against tough comparables from a year ago is impressive. Shares in the company rallied more than 5% on Wednesday to £13.28.
That means the stock is up 32% year-to-date, although down on the £15.25 peaks hit in July.
RESELLING SOFTWARE
Technology Sourcing, what the company calls its basic software reselling bit, drove the growth, which included a strong public sector performance in Germany, and a promising bounce in sales and profits in the US.
The once problematic French market is also showing encouraging signs, with Computacenter saying it continued to see a better-than-expected performance through the three months through September.
This will come as little to surprise to those readers savvy to the drive to digitise that organisations both large and small, public and private, are increasingly embracing.
Computacenter, and many of its peers, SoftwareONE, SCC, CCS Media and not least, the UK’s own Softcat (SCT), have wide product portfolios and large advisory teams that are well placed to advise, supply, deploy, and manage products and services which ultimately provide solutions for clients.
MANAGED SERVICES A WEAK SPOT
If there is one area of weakness it is arguably in managed services, where Computacenter expressed its disappointment at losing out on a large managed services renewal in France. This will have a small impact to the group in 2020, although the company stressed that it still expected to continue a significant relationship with the customer.
As one analyst said today, managed services generally mean ‘tough renewal periods and significant competition from smaller specialist providers’ potentially capable of offering ‘better service at lower cost even to major enterprises’.
That’s something to watch as the 2019 draws to a close.
‘While the fourth quarter is always the most critical to the year's performance, the board's confidence with its current expectations continues to strengthen as we progress through the year,’ the company said.
