Computacenter PLC (LON:CCC) shares rose in early deals after the FTSE 250 IT supplier reported that revenues had topped £4bn in its latest financial year.
For the year ended 31 December 2018, the group reported a 14.7% jump in revenue to £4.35bn, while its adjusted pre-tax profit rose 11.3% to £118.2mln. The figures beat forecasts from a trading update in January, which had predicted revenue growth of 8%.
READ: Computacenter jumps as IT firm says "materially outperformed" its expectations for 2018
The record-breaking revenues were boosted by a strong uptick in the firm’s supply chain division, which resells manufacturers’ hardware and software to customers, as revenues surged 20.5% to £3.17bn. Revenues in the service segment, meanwhile, were up 1.5% at £1.17bn.
There was also a bumper year for the company’s German arm, which makes up around 46% of its profits, as it reported an 8.3% rise in revenues to €2.1bn (£1.8bn).
On the back of the improved results, Computacenter hiked its final dividend to 21.6p per share from 18.7 at the end of 2017, taking the total dividend up to 30.3p from 26.1p.
Mike Norris, the firm’s chief executive, said while the success of the supply chain division, which has now been renamed to technology sourcing, created a “difficult comparative” for the new financial year, a 104 basis point decline in margins for its services segment in 2018 meant there was “significant opportunity to improve”.
He also expected a “profit contribution” in 2019 from FusionStorm, a US IT solutions provider that the group acquired at the end of September, which had already contributed around £3mln in adjusted operating profits in the last three months of the year.
In a note to clients, analysts at UBS maintained their 'neutral' rating and 1,080p price target on the stock, saying various tailwinds including higher predicted profits from FusionStorm at £10mln for 2019 underpinned their profit forecasts of £125mln for the coming year.
Shares were up 4.5% at 1,164p.