Computacenter issues second profits warning
June 28, 2005
Computacenter, the PC sales and services firm, has issued its second profits warning for 2005. The company said it expected sales in the first six months of the year to be approximately 10% down on the same period last year. The company said its services business grew, but more slowly than expected. Conditions are not expected to improve in 2005.
At close of trading in London, shares in the group closed down 21.98%, or 51p, at 181 pence. As a result, the company said that it expected its profit to be “substantially below current market estimates”.
It is anticipated that analysts will now reduce their profit forecasts for the year to between £25m and £28m from £42m- £47m.
Computacenter said its final sales figure for the first half would be heavily dependent on the last few days of its second quarter. It said that reduced sales would result in lower rebates from suppliers and profit margins would be affected.
At a conference call, chief executive Mike Norris said that the level of service that customers require for PC products has reduced. He said “We are building and selling a Rolls-Royce solution and Dell have beaten us because they are delivering a good enough solution”.