Computacenter — FY24 results reveal a story of contrasts

Computacenter (LSE: CCC)

Last close As at 17/03/2025

0.00 (0.00%)

Market capitalisation

GBP106m

More on this equity

Research: TMT

Computacenter — FY24 results reveal a story of contrasts

After 19 years of uninterrupted EPS growth, Computacenter’s (CCC’s) adjusted diluted EPS fell by 8.5% to 159.9p/share in FY24. CCC believes this result masks the fact that H224 was ‘the most profitable in our history’ as it ended the year with the highest number of major enterprise customers ever. Add to this a discount to US peers, and it is unsurprising that the shares responded positively to the results update.

Written by

Dan Ridsdale

Head of Technology

Technology

QuickView

18 March 2025

Price 2,334.00p
Market cap £2,480m
Price Performance
Share details
Code CCC
Listing LSE

Shares in issue

106.2m

Net cash/(debt) at 31 December 2024

£352.7m

Business description

Computacenter is a UK-based IT services provider, helping European and North American enterprise customers to manage digital technology across the workplace, network, data centre and cloud domains.

Bull points

  • History of strong returns, having returned over £1bn in dividends and special returns since listing.
  • Network of 193 large enterprise customers generating gross profits of more than £1m each.
  • Broad range of IT solutions available to customers including sourcing, managed services and professional services.

Bear points

  • Exposure to enterprise IT infrastructure spending cycles.
  • Exposure to lower-margin, long-term managed services contracts.
  • Exposed to large enterprise contract renewal risk.

Analysts

Dan Ridsdale
+44 (0)20 3077 5700
Ross Jobber
+44 (0)20 3077 5700

EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.

Financials

In its 28 January pre-close trading statement, CCC guided to FY24 adjusted PBT at the lower end of a £235.6–266.5m range (average: £261.3m). FY24 adjusted PBT of £254m was announced today (FY23: £278m). FY24 gross invoiced income was up 0.5% (cc) with total revenues up 2.9% (cc). Tough y-o-y comparisons in Technology Sourcing were offset by new customer wins. Gross profit was up 1.2% (cc), with margins down in Technology Sourcing (-31bp) but up in Services (+31bp). Adjusted operating profit was down 6.8% (cc) after an £8.1m increase in investments to £36.8m to improve productivity and underpin future growth. By contrast, adjusted operating profit in H224 was up 11.2%, with weakness in the UK offset by stability in Germany and growth in North America. A 1% increase was announced in the dividend to 70.7p/share. Year-end adjusted net funds were £482.2m, up £23.2m y-o-y and after a £200m buyback programme that completed in October 2024.

A year of contrasts

It seems that FY24 was full of contrasts. H1 faced a tough comparable, while H2 produced record profitability. There was customer uncertainty in the UK market, while North American demand grew strongly. Managed Services reported revenue fell 5.3%, while Professional Services revenue rose 11.9%. These contrasts resulted in the share price falling from a high of c 3,000p to a low of c 2,020p in 2024.

Valuation

CCC’s exposure to hardware versus some other European IT services names has sometimes held it back in valuation terms. That said, its track record should leave no doubt as to the quality and resilience of its operating model. Furthermore, CCC’s international footprint is one of the most well-developed Europe-listed IT services names, which brings its own attractions. Before the results, the stock traded at an EV/EBITDA discount to US peers CDW and Insight of 50% and 32%, and P/E discounts of 24% and 15%, respectively (source: LSEG Data & Analytics).

Source: LSEG Data & Analytics, company data. Note: EBITDA and EPS stated after adjustment for amortisation of acquired goodwill.

Consensus estimates

Year end Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) DPS (p) EV/EBITDA (x) P/E (x) Yield (%)
12/23 6,922.8 352.2 278.0 174.80 70.00 6.0 13.4 3.0
12/24 6,964.8 328.0 254.0 159.90 70.70 6.5 14.6 3.0
12/25e 7,055.0 342.4 269.0 176.70 72.70 6.2 13.2 3.1
12/26e 7,436.0 362.9 288.7 190.90 76.80 5.9 12.2 3.3
12/27e 7,999.0 381.0 307.1 203.20 80.40 5.6 11.5 3.4

General disclaimer and copyright

This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright 2025 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or sol icitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Computacenter

View All

Latest from the TMT sector

View All TMT content

Research: Metals & Mining

Sylvania Platinum — Strong FY26 EPS lift as chromite JV kicks in

Sylvania Platinum’s H125 results provided insightful disclosure around the Thaba joint venture (JV) accounting treatment and guidance on the outlook. We have taken the opportunity to recalibrate our modelling to allow for the meaningful pick-up in capital expenditure, the updated cost outlook and the treatment of Sylvania’s loan to the JV partner, Limberg Mining Company (Limberg). Considering the current uncertain global environment, we have increased the conservatism in our forecasts, which has resulted in a 6.8% lower valuation of 99.6p/share.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free