2021 Full Year Results Announcement

Financial Highlights	2021	2020	Percentage Change Increase/ (Decrease)
Financial Performance
Services revenue (£ million)	1,450.9	1,261.2	15.0
Technology Sourcing revenue (£ million)	5,274.9	4,180.1	26.2
Revenue (£ million)	6,725.8	5,441.3	23.6
Adjusted1 profit before tax (£ million)	255.6	200.5	27.5
Adjusted1 diluted earnings per share (pence)	165.6	126.4	31.0
Dividend per share (pence)	66.3	50.7	30.8
Statutory profit before tax (£ million)	248.0	206.6	20.0
Statutory diluted earnings per share (pence)	160.9	133.8	20.3
Cash Position
Cash and cash equivalents (£ million)	273.2	309.8
Adjusted net funds3 (£ million)	241.4	188.6
Net funds (£ million)	95.3	51.1
Net cash flow from operating activities (£ million)	224.3	236.9

 

 

Reconciliation between Adjusted1 and Statutory Performance
Adjusted1 profit before tax (£ million)	255.6	200.5
Exceptional and other adjusting items:
Costs related to acquisition (£ million)	-	(0.7)
Gain on acquisition of a subsidiary (£ million)	-	14.0
Amortisation of acquired intangibles (£ million)	(7.6)	(7.4)
Other exceptional items (£ million)	-	0.2
Statutory profit before tax (£ million)	248.0	206.6

 

Our strong financial and operational performance in 2021 has been facilitated by the consistent implementation of our strategy. It has also been underpinned by our focus on the long-term consequences of our decision-making across the organisation, and the actions we have taken to understand the needs, views and interests of our stakeholders.

Following 16 consecutive years of growth in adjusted¹ diluted earnings per share, we increased our adjusted¹ profit before tax by over 30 per cent in constant currency² during 2021, and have more than doubled it over the last three years. Our adjusted¹ profit before tax results for both the first and second halves of the year are individually greater than any full-year adjusted¹ profit before tax we achieved prior to 2019.

We have achieved improvement across each of the four key metrics that the Board uses to measure performance against our strategic priorities.

We have seen progress in the delivery of our Sustainability Strategy, winning together for our people and our planet. Our Scope 1 and 2 carbon emissions have fallen by 62 per cent in 2021, from 13,856 metric tonnes of CO2e in 2020 to 5,210 metric tonnes, we were certified as a Top Employer across a number of our major operating geographies, and we were recognised at the CRN Women in Channel Awards 2021 for our community outreach programme.

We continue to work diligently to enable the consistent delivery of value for our stakeholders, and make decisions to ensure the long-term sustainable success of our organisation and the achievement of our Purpose.

Operational Highlights:

• The Group’s total revenues grew by 23.6 per cent during the year, by 26.9 per cent in constant currency², and by 10.9 per cent in constant currency² organically, without the impact of acquisitions made since 1 January 2020. Significant increases in expenditure from industrial customers and hyperscale technology customers have complemented continuing business within the public and financial services sectors. Ongoing, but reducing, COVID-19 related cost reductions and further improved Services margins and stable Technology Sourcing margins has resulted in an increase in adjusted¹ profit before tax of 31.5 per cent in constant currency² during the year to £255.6 million. The doubling in adjusted¹ profit before tax in the three years since our 2018 results is the first time that we have achieved such an increase since we have been a public company.
• The UK saw an increase in revenues of 9.9 per cent balanced between Technology Sourcing and Services. Enterprise orders more than offset the decline in workplace as the short-term demand from COVID-19 dissipated. Professional Services revenues saw very strong growth as customers looked to their longer-term IT transformation programmes. Strong Services margins, due to increased utilisation and reduced external contractor costs and stable Technology Sourcing margins have resulted in an increase in adjusted¹ operating profit of 14.0 per cent during the year.
• Germany saw overall revenues increase by 11.6 per cent on a constant currency² basis with growth in Managed Services supporting a very strong performance in both Technology Sourcing and Professional Services. The increase in Professional Services volumes, at higher margins, coupled with overall Services margin improvements and secure Technology Sourcing margins have resulted in an increase of 27.8 per cent in adjusted¹ operating profit on a constant currency² basis.
• France had a slightly disappointing year, being impacted by the slower than anticipated return of volumes from its large industrial private sector customer base, lower than expected orders from its largest Technology Sourcing customer and the expected downturn in its Services business due to the cessation of the Group’s largest Managed Services contract which impacted from H2 2020. This has resulted in a 6.6 per cent decrease in organic revenues on a constant currency² basis, decreasing gross profits and a 70.8 per cent reduction in overall adjusted¹ operating profit to €4.2 million including the results of the Computacenter NS acquisition.
• North America has seen strong organic revenue growth of 27.9 per cent increasing to 114.3 per cent including the Pivot acquisition, both on a constant currency² basis. The combined growth has meant that the North American business now has the largest Technology Sourcing revenues of any Segment within the Group with $2.5 billion of Technology Sourcing sales, up from virtually nil in H1 2018. The hyperscale FusionStorm customers saw a good return to growth in the year. Services revenue saw 27.5 per cent organic growth, including the first major North American Managed Services customer won by the local team, with the Pivot acquisition contributing a further $104.5 million of Services revenue in the year. Adjusted¹ operating profit, including the impact of Pivot, has increased by 131.5 per cent to $42.6 million.

 

The result for the year benefited from £1,105.1 million of revenue (2020: £232.6 million), and £13.9 million of adjusted1 profit before tax (2020: £3.3 million), resulting from all acquisitions made since 1 January 2020. 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. A reconciliation between key adjusted1 and statutory measures is provided within the Group Finance Director’s review contained in this announcement.

 

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Read the full report

 

For further information, please contact: 
Computacenter plc.
Mike Norris, Chief Executive                01707 631 601
Tony Conophy, Finance Director        01707 631 515
www.computacenter.com

Tulchan Communications                020 7353 4200
James Macey White
Matt Low
www.tulchangroup.com

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¹ Adjusted 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, 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, as Management do 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 Group Finance Director’s review contained in this announcement which details the impact of exceptional and other adjusted items when compared to the non-Generally Accepted Accounting Practice financial measures in addition to those reported in accordance with IFRS.

² We evaluate the long-term performance and trends within our strategic priorities 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. We calculate constant currency percentages by converting our prior-year local currency financial results using the current year average exchange rates and comparing these recalculated amounts to our current year results or by presenting the results in the equivalent local currency amounts. Wherever the performance of the Group, or its overseas Segments, are presented in constant currency, or equivalent local currency amounts, the equivalent prior-year measure is also presented in the reported pound sterling equivalent using the exchange rates prevailing at the time. 2021 highlights, as shown above are provided in the reported pound sterling equivalent.

³Adjusted 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. A table reconciling this measure, including the impact of lease liabilities, is provided within note 8 to the summary financial information contained in this announcement.

⁴Gross invoiced income is based on the value of invoices raised to customers, net of the impact of credit notes. This reflects the cash movements from revenue, 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 Statement of Financial Position and Consolidated Cashflow Statement. This measure allows an alternative view of growth in adjusted gross profit, based on the product mix differences and the accounting treatment thereon. 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 contained in this announcement.

The term Group refers to Computacenter plc and its subsidiaries.