On Friday, Computacenter PLC (LON:CCC) will report on first-half results, having revealed at the end of the first quarter that customers did not seem to be deterred by the “slightly more challenging economic conditions throughout our major markets”.
The FTSE-250 IT supplier also recently said that underlying adjusted profit before tax in the first half was “marginally ahead” of last year's £52mln and raised its outlook for the full year to a level “materially ahead of current market expectations”.
This mainly reflected the fact that last year management took a number of provisions on mainly on German outsourcing contracts and it now feels the level of provisioning is adequate and so new provision creation will “reduce significantly” in the second half.
UBS noted that Computacenter had taken £14mln of specific contract-related provisions in 2018, up from £4mln in 2017, “pointing to the potential magnitude of benefit”.
For this FTSE SmallCap outfit, UBS analysts expect first-half sales growth of 14% to €2.3bn, driven by 5% like-for-like growth, 8% from acquisitions and some currency benefit.
Trading profit is pencilled at €325mln, representing growth of 20% as margin expansion is driven by deflation in commodity prices.
The analysts concluded, “we think guidance could imply some upside to consensus EBITA estimates of ~€480m (UBSE €500m), with upside likely from input costs. The downside risk is the evolution of end markets, in particular the UK.”
Friday August 23:
Economic data: US new home sales