Computacenter (LON: CCC) shares were given a lift Monday morning after the company said it posted a record fourth quarter and a full-year result which is slightly ahead of the guidance provided in its Q3 trading update.
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The company was boosted in 2022 by a strong US dollar and a small acquisition in the second half of the year, although it has also faced headwinds, such as the Covid-related benefits from previous years unwinding, particularly impacting its Services margins.
Computacenter shares are currently up 8%.
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The computer services firm revealed total revenue for the year ended December 31, 2022, on a Gross Invoiced Income basis, grew by over 30%. This includes the effects of acquisitions made in the middle of 2022, while revenue grew by over 27% in constant currency.
The business noted strong demand in all countries from Technology Sourcing product sales, which remained extremely positive until the year's end.
Services revenue performance was also strong, although, as mentioned, its Services margin performance was impacted by the Covid unwinding headwind and inflationary pressures, which it expects to continue into 2023. Adjusted net funds finished the year at around £244 million.
In its interim results, Computacenter reported substantial increases in its inventory as a result of supply chain shortages, and while inventory levels continued to increase until the end of the third quarter, the company said they have since “improved materially.”
Computacenter has seen a substantial reversal of the inventory position as the industry readjusted. The company expects inventory levels to continue to reduce further in 2023 toward normal levels.
CCC said it is pleased with the profit growth it has achieved for the year and the significant momentum it will carry into 2023.
Looking ahead, it revealed that technology sourcing product sales remain “extremely buoyant,” and it is confident of continued services revenue growth, with services margins broadly in line with pre-covid levels, despite inflationary pressures making it challenging to maintain in the short term.
Computacenter said it is as bullish as it has ever been about its target market and competitive positioning. The company will publish its final results for the year on Monday, March 20, 2023.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.