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Computacenter lifts dividend and makes US-focused acquisition after strong half year

Based on current business activity levels, the group said adjusted profit before tax for the year is “unlikely to be less than £180mln”

Computacenter PLC -

Computacenter PLC (LON:CCC) upgraded its interim dividend by 22% and announced the C$106mln acquisition of US-focused Pivot Technology Solutions Inc (TSX:PTG) after thriving amid the challenges of the first half of the year.

A fellow IT solutions provider, Pivot made an underlying profit of US$26.8mln on revenues of US$1.2bn revenues in 2019, with roughly 85% of its sales coming from the US and the rest from Canada.

“The acquisition of Pivot represents an opportunity to increase our scale, geographic footprint and capabilities in US. Additionally, Canada expands our total market opportunity and helps us meet the needs of international customers,” said Computacenter chief executive Mike Norris.

As for the FTSE 250-listed group itself, it reported revenues up 0.6% on a constant currency basis to £2.5bn in the first six months of 2020.

Cost reductions made during the coronavirus pandemic led to pre-tax profits growing 42.5% to £72.4mln, or up 40% to £74.6mln if adjusted for amortisation.

Based on current business activity levels, Norris said adjusted profit before tax for the year is “unlikely to be less than £180mln”. 

“We feel it is important to give specific guidance given the broad range of market expectations concerning our likely results.”

Revenues during the year saw a shift in the usual patterns due to the pandemic, as significant reductions in spending from industrial customers was offset by new business within the government and financial services sector as organisations moved to working from home.

In Germany this resulted in “spectacular” growth in professional services, while the US business improved compared to a weak half last year, while France slowed after a record couple of years as companies reduced spending more than that seen in Germany and the UK. 

On the outlook, Norris said that while it was impossible to predict exactly how the world will recover in 2021 and beyond, “we do believe that our customers will continue to invest in technology and that we have built a substantial reseller business with the largest service capability of any reseller in the world and the most substantial international footprint which should enable us to deliver a reliable and consistent business”.

Quick facts: Computacenter PLC

Price: 2212 GBX

LSE:CCC
Market: LSE
Market Cap: £2.52 billion
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