Computacenter profit down

14 March 2006

VAR giant cites reduced vendor rebates as major reason for profit drop

Computacenter has blamed its significant drop in profits on lower vendor rebates in the UK.

The IT infrastructure services provider posted turnover of £2.29bn for the year ended 31 December 2005, compared to £2.41bn in 2004. Pre-tax profit stood at £34m compared to £67.9m the previous year. The firm revealed £27m of the profit decline was “attributable to lower vendor rebates in the UK”.

Ron Sandler, chairman of Computacenter said in a statement: “There is no denying that 2005 was a difficult year for Computacenter, and that the financial performance of the Group was disappointing.

“But the year was not without its positive features. Significant steps were taken in the UK to create an organisation that is considerably better equipped to respond to the challenges posed by the continuing commoditisation of IT. The long-running dispute in Germany with GE was brought to a satisfactory resolution. And across the Group, trading improved as the year progressed, and was particularly strong at the year-end.

“Trading activity in the first two months of 2006 has been below the comparable period in 2005. However, in recent years, our sales have become increasingly weighted towards the end of each quarter, such that trading in the early weeks of the quarter now provides a less reliable indicator of performance for the period as a whole.

“While much remains to be done to improve Computacenter’s profitability, there is a sense of optimism within the company that we are getting back on the right track.”