Tuesday 12 March 2019 5:08 pm

Computacenter shares jump on strong 2019 outlook

Shares in Computacenter jumped nearly five per cent today, despite the FTSE 250 company reporting a slight drop in profit in its annual results.

The company said profit fell 3.2 per cent to £108.1m, despite a nearly 15 per cent increase in revenue to £4.4bn.

It increased its dividend 16 per cent to 30.3p per share.

Read more: Computacenter shares crash 20 per cent

Chief executive Mike Norris said: “'2018 was a record year in revenue, adjusted operating profit and adjusted diluted earnings per share for the group. We have also laid foundations for further growth in the years ahead.

We have invested in the physical infrastructure that enables our technology sourcing, increased our services capability and expanded our geographical footprint through acquisitions. In addition, we reduced the number of shares in circulation by 6.97 per cent, through a return of value tender offer of £100m. Even after these substantial investments, Computacenter finished the year with a strong balance sheet and a cash surplus, which underpins our confidence in the future.”

Looking forward Norris said lower services margins in 2018 gives the company a “significant opportunity to improve”.

Read more: Computacenter par for the course as first half revenue surpasses £2bn

He also said the company expected a profit contribution from its newly acquired US business.

“As we look out further into the future, we remain enthusiastic about our customers' desire to enhance the digital experience, grow their network capacity, modernise their infrastructure and enhance their competitiveness, by investing in technology,” he said.

Analysts at UBS said the company was “entering 2019 with some tailwinds to profits”.

Shares closed up 4.85 per cent at 1,168p.