Will Computacenter have the codes to unlock more growth following next week’s half year results?
The IT services company must be pretty damn pleased with how 2018 has panned out so far. Opening at £11.27, the stock had initially slipped to £10 by mid-March. Yet from that point it went on quite the climb, eventually hitting an all-time high of £16.28 in the aftermath of its Q2 statement in mid-July. Since then it has pulled back slightly, with Computacenter PLC now at a current trading price of £15.62 (Spreadex, 15/08/2018).
The financial year’s first update came at the end of April, when it said Q1 revenue had risen 21% at a constant currency basis, with a 2% increase in the Services division joined by a 31% surge in Supply Chain revenue. The company said these results were ‘flattered’ by a one-off software licence sale in the UK of £34.1 million; strip this away and revenue was up a still impressive 17% in constant currency.
As mentioned, however, it was July’s second quarter report that got investors really excited. Computacenter said that the half year to 30th June saw ‘considerable progress’ for the company in regards to adjusted profitability, ‘and even further progress in adjusted earnings per share following the buyback completed in February 2018’. The firm went on to state that, while there was still a ‘significant amount’ to do in H2, its full year results should now be ‘comfortably in excess’ of previous expectations.
In terms of the half year figures on Friday 24th August, Computacenter now needs to deliver on the growth promised back in July. For reference, at this point in 2017 the company posted a 15% rise in revenue to £1.7 billion alongside a 65.6% surge in adjusted pre-tax profit to £41.9 million.
Computacenter PLC has a consensus rating of ‘Hold’ alongside an average target price of £15.33.
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