Computacenter sees trouble ahead

While Computacenter CEO Mike Norris has just reported a stonkingly good financial year, he is a little worried about what he is seeing in his crystal ball.

The services giant saw overall revenue grow 16 percent year on year to £5.02 billion, with its Technology Sourcing unit contributing over £3.8 billion to that number.

Norris warned that last year has set a “high bar” for its current fiscal year and that it may not see the same level of growth due to the impact of coronavirus.

“It is too early to predict the outcome for the year as a whole and there is still much work to be done, particularly as we have not yet completed our first quarter. Our services pipeline is the strongest we have seen for some time in both professional and managed services. While we still believe customers will continue to invest in product, particularly in the areas of security, networking, and cloud, it may well be difficult to achieve the same growth rates we have seen in recent years.”

He noted there had been an upswing in demand for laptops as more customers implement remote working policies to contain the spread of the contagion. However, he raised concerns about IT projects coming to a standstill and supply chains being disrupted.

“The current COVID-19 outbreak makes forecasting the future even more challenging. We are urgently supporting our customers focused on their business continuity plans, which involves the need for a greater degree of remote working. We have seen a surge in demand for laptops for this purpose. To date, supply constraints from our technology providers have been minimal, although there are some concerns.”

He is worried that in the medium term, customers may postpone significant IT infrastructure projects while the current uncertainty remains.

“In the longer term, we feel more certain, either because when this crisis is behind us, life will return to normal and the fundamental business drivers for IT growth remain or, if there is a long-term reduction in business travel and commuting with a consequent upsurge in remote working, it can only drive the need for technology even further.”

The only blip in the results was UK turnover, which fell nearly two percent year on year to £1.5 billion. Computacenter said that this comparative decline was due to two very large one-off deals in FY18. The UK also reported “modestly” lower revenues across its Managed Services, Professional Services and Technology Sourcing units.