Computacenter (CCC) H1 2024 earnings summary

Executive summary

• H1 2024 results reflect expected normalisation after exceptional H1 2023, with solid performances in Germany and North America, but softer UK market conditions and increased strategic investment spend.

• Strategic progress includes growth in podium customers, especially in North America, and continued expansion in Professional Services.

• Product order backlog up 47.8% since year-end, supporting a stronger H2 outlook.

• Disciplined capital allocation, including a £200m share buyback and nearly £1bn returned to shareholders since 2013.

Financial highlights

• Revenue: £3.1bn, down 13.4% year-over-year; gross profit: £472m, down 6.6%; gross margin up 111bps to 15.2%.

• Adjusted profit before tax: £87m, down 28.4%; adjusted diluted EPS: 55.0p, down 25.2%; interim dividend: 23.3p, up 3.1%.

• Adjusted net funds: £402m, up 40.9% year-over-year; net cash and equivalents at £411.4m.

• Free cash outflow of £28.8m (H1 2023: £82.0m inflow); net cash inflow from operating activities was £1.4m.

• £66m of the £200m buyback completed by early September.

Outlook and guidance

• Stronger H2 performance expected, supported by a record £1.8bn product order backlog and improved Managed Services margins.

• High near-term visibility in North America and a healthy pipeline of opportunities.

• FY 2024 strategic initiatives opex expected at £28-30m; capex £35-40m; adjusted effective tax rate 28.5-30.5%.

• Dividend cover targeted at 2-2.5x adjusted diluted EPS.

• c.£8m negative FX impact on adjusted PBT anticipated for FY 2024.