Major IT firm reports deterioration in trade

Computacenter, a specialist provider of IT infrastructure services to large organisations, have reported deteriorating trading conditions in the sector.

Announcing interim results for the six months ended 30 June 2001, in line with expectations Computacenter unveiled a pre-tax profit of £34 million before exceptional charges of £3.4 million for the closure of iGroup and a share loss in Biomni of £1.4 million.

However, in his statement Chairman Ron Sandler said: “ Although in aggregate these results are encouraging, they conceal a deterioration in trading conditions as the first half progressed. Performance in the early part of the year was exceptionally strong as the post-millennium recovery in IT markets, which began in the latter half of 2000, continued to gain momentum.”

Mr Sandler said that from April the company had experienced the first signs of a “significant slowdown”. He added: “Trading conditions and therefore the outlook for profits in the second half are difficult to predict with confidence.”

He said: “Sales of Unix systems were particularly affected, as a result of the downturn in e-business investment. More generally, in a climate of growing economic uncertainty, a slowdown in corporate spending on IT development and deployment was experienced, most noticeably in the telecoms and investment banking sectors.

“In recognition of market conditions, Computacenter has continued to pay close attention to keeping costs under tight control and, even allowing for the growth in on-site Managed Services personnel, Group headcount during the period has been essentially static.”

Computacentre closed specialist e-business division the iGroup which had experienced an operating loss of 5 million in the period.

As a whole the Group’s balance sheet remained strong with sales of £1.173.7 million generating £56 million in cash.

The stock market did not warm to the news and shortly after the statement was released Computacenter shares fell by 10 per cent.

(SP)