2023 full-year results announcement

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Computacenter plc ("Computacenter" or the "Group"), a leading independent technology and services provider, today announces audited results for the year ended 31 December 2023.

2023 full-year results announcement

Financial highlights20232022ChangeChange in constant currency1
Technology Sourcing gross invoiced income (£m)8,444.97,481.612.9%13.1%
Services revenue (£m)1,636.51,570.64.2%3.1%
Gross invoiced income1 (£m)10,081.49,052.211.4%11.3%
Technology Sourcing revenue (£m)5,286.34,899.97.9%8.1%
Services revenue (£m)1,636.51,570.64.2%3.1%
Revenue (£m)6,922.86,470.57.0%6.9%
Gross profit (£m)1,044.0947.110.2%9.8%
Gross margin (%)15.1%14.6%+44bps 
Adjusted operating profit (£m)271.5269.10.9%0.6%
Adjusted profit before tax (£m)278.0263.75.4%5.1%
Adjusted diluted earnings per share (p)174.8169.73.0% 
Dividend per share (p)70.067.93.1% 
Net cash inflow from operating activities (£m)410.6242.169.6% 
Adjusted net funds (£m)459.0244.387.9% 
Operating profit (£m)268.8256.44.8% 
Profit before tax (£m)272.1249.09.3% 
Diluted EPS (p)173.2159.18.9% 
Net funds (£m)343.6117.2193.2% 

1Alternative performance measures (APMs) and other terms are used throughout this announcement. These are defined in full in the appendix to this announcement.

Financial highlights - 19th consecutive year of adjusted EPS growth

  • Another record year of revenue, gross profit and adjusted EPS while continuing to invest for future growth
  • Gross invoiced income of over £10bn, up 11.4%, driven by strong growth in Technology Sourcing and solid growth in Services, with gross profit up 10.2%
  • Adjusted PBT up 5.4% reflecting higher levels of strategic investment; adjusted diluted EPS up 3.0%
  • Excellent cash generation driven by effective inventory management with adjusted net funds increasing by £214.7m to £459.0m


Operational and strategic highlights

  • Strong Group performance reflects the benefits of our integrated Technology Sourcing and Services model as well as our broad geographic diversity
  • Technology Sourcing gross invoiced income growth of 13.1% in constant currency, driven by resilient large enterprise spend and further market share gains
  • Services revenue growth of 3.1% in constant currency, with gross margin performance improving across the year
  • Continued momentum in Germany with adjusted operating profit increase of 13.8% in constant currency, reinforcing our leading market position
  • Strong growth in North America with adjusted operating profit increase of 24.0% in constant currency, demonstrating the scale of the long-term growth opportunity
  • £28.1m of investment in strategic initiatives (2022: £14.8m) to improve our capabilities, enhance productivity and secure future growth
  • 2032 mid-term and 2040 Net Zero targets approved by SBTi as part of our Sustainability roadmap


Shareholder returns

  • Proposed final dividend of 47.4p, increasing the full year dividend by 3.1% to 70.0p
  • Given the strength of our balance sheet we continue to evaluate a number of capital allocation options


Outlook

  • Expect to make further progress in 2024 with growth weighted to the second half of the year, reflecting a significantly more challenging comparison in the first half of the year than in the second half



Read the full report

For further information, please contact: 

Computacenter plc.

Mike Norris, CEO        +44(0) 1707 631 601
Chris Jehle, CFO        +44(0) 1707 631 346
Christian Cowley,      +44(0) 1707 631 132
Investor Relations
www.computacenter.com

Teneo

James Macey White/    +44(0) 207 353 4200
Matt Low
www.teneo.com

We delivered our nineteenth consecutive year of growth in adjusted earnings per share, outperforming our markets in 2023, as our large customers continued to invest heavily in new technology. We managed an uncertain macroeconomic backdrop and inflationary pressures effectively, reduced our inventory significantly, resulting in a record net cash position. As planned, we stepped up our investment in strategic initiatives to underpin our competitiveness and future growth.

Overall we expect 2024 to be another year of progress with growth weighted to the second half, while continuing to invest for future growth. Looking further ahead, the combination of the strength of our integrated Technology Sourcing and Services model and our geographic diversity, gives us continued confidence in our long-term growth prospects.

Mike Norris , Chief Executive Officer of Computacenter plc
Photo of Mike Norris , Chief Executive Officer of Computacenter plc

Appendix:

Alternative performance measures

Alternative Performance Measures are used by the Group to understand and manage performance. These are not defined under International Financial Reporting Standards (IFRS) or UK-adopted International Accounting Standards (UK-IFRS) and are not intended to be a substitute for any IFRS or UK-IFRS measures of performance but have been included as Management considers them to be important measures, alongside the comparable Generally Accepted Accounting Practice (GAAP) financial measures, in assessing underlying performance. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures. The table below sets out the basis of calculation of the Alternative Performance Measures and the rationale for their use.

MeasureDescriptionRationale
Adjusted net funds and net fundsAdjusted net funds or adjusted net debt includes cash and cash equivalents, other short- or long-term borrowings and current asset investments. Following the adoption of IFRS 16, this measure excludes all lease liabilities recognised under IFRS 16. Net funds is adjusted net funds including all lease liabilities recognised under IFRS 16.A table reconciling this measure, including the impact of lease liabilities, is provided within note 9 to the summary financial information within this announcement.
Adjusted (expense and profit) measuresAdjusted administrative expense, adjusted operating profit or loss, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss, adjusted earnings per share and adjusted diluted earnings per share are, as appropriate, are each stated before: exceptional and other adjusting items, including gains or losses on business acquisitions and disposals, amortisation of acquired intangibles, utilisation of deferred tax assets (where initial recognition was as an exceptional item or a fair value adjustment on acquisition), and the related tax effect of these exceptional and other adjusting items. Recurring items include purchase price adjustments, including amortisation of acquired intangible assets and adjustments made to reduce deferred income arising on acquisitions and acquisition-related items. Recurring items are adjusted each period irrespective of materiality, to ensure consistent treatment. Non-recurring items are those that Management judge to be one-off or non-operational, such as gains and losses on the disposal of assets, impairment charges and reversals, and restructuring related costs.Adjusted measures exclude items which in Management's judgement need to be disclosed separately by virtue of their size, nature or frequency to aid understanding of the performance for the year or comparability between periods. Adjusted measures allow Management and investors to compare performance without these recurring or non-recurring items. Management does not consider these items when reviewing the underlying performance of the Segment or the Group as a whole. A reconciliation to adjusted measures is provided within the Chief Financial Officer's review, which details the impact of exceptional and other adjusted items when compared to the non-GAAP financial measures, in addition to those reported in accordance with IFRS. Further detail is provided within note 4 to the summary financial information within this announcement.
Constant currencyWe evaluate the long-term performance and trends within our strategic KPIs on a constant-currency basis. The performance of the Group and its overseas Segments are also shown, where indicated, in constant currency. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates.We believe providing constant currency information gives valuable supplemental detail regarding our results of operations, consistent with how we evaluate our performance.
Free cash flowFree Cash Flow is Cash Flow from Operations minus net interest received, interest and payments related to lease liabilities, income tax paid and gross capital expenditure. To measure the cash generated by the operating activities during the period that is available to repay debt, undertake acquisitions or distribute to shareholders. 
Gross invoiced income and IFRS revenueGross invoiced income is based on the value of invoices raised to customers, net of the impact of credit notes and excluding VAT and other sales taxes. Gross invoiced income includes all items recognised on an 'agency' basis within revenue, on a gross income billed to customers basis, as adjusted for deferred and accrued revenue. A reconciliation of revenue to gross invoiced income is provided within note 4 to the summary financial information within this announcement. IFRS revenue refers to revenue recognised in accordance with International Financial Reporting Standards including IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases'.Gross invoiced income reflects the cash movements to assist Management and the users of the Annual Report and Accounts in understanding revenue growth on a 'principal' basis and to assist in their assessment of working capital movements in the Consolidated Balance Sheet and Consolidated Cash Flow Statement. This measure allows an alternative view of growth in adjusted gross profit, based on the product mix differences and the accounting treatment thereon.
Organic (revenue and profit) measuresIn addition to the adjustments made for adjusted measures, organic measures exclude the contribution from discontinued operations, disposals and assets held for sale of standalone businesses in the current and prior period; exclude the contribution from acquired businesses until the year after the first full year following acquisition; and adjust the comparative period to exclude prior-period acquired businesses if they were acquired part-way through the prior period. Acquisitions and disposals where the revenue and contribution impact would be immaterial are not adjusted.Organic measures allow management and investors to understand the like-for-like revenue and current-period margin performance of the continuing business. The result for the year benefited from £221.4m of revenue (2022: £187.1m), and £9.3m of adjusted profit before tax (2022: £7.1m), resulting from all acquisitions made since 1 January 2022. All figures reported throughout this Annual Report and Accounts include the results of these acquired entities. The results of these acquisitions are excluded where narrative discussion refers to 'organic' growth in this Annual Report and Accounts.
Product order backlogThe total value of committed outstanding purchase orders placed with our technology vendors against non-cancellable sales orders received from our customers for delivery within 12 months, on a gross invoiced income basis.The Technology Sourcing backlog, alongside the Managed Services Contract Base and the Professional Services forward order book, allows us visibility of future revenues in these areas.
Return on capital employed (ROCE)ROCE is calculated as adjusted operating profit, divided by capital employed, which is the closing total net assets excluding adjusted net funds.As an indicator of the current period financial return on the capital invested in the company.

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