Computacenter shares crash 20 per cent as it loses out on IT infrastructure sales
Computacenter shares plummeted almost 20 per cent in early morning trading after it told investors that revenue has fallen three per cent in the face of “significantly more challenging” conditions.
The FTSE 250 IT firm warned that third quarter revenues have fallen to £900m from £931m in the same period in 2017, while UK revenues dived nine per cent to £296m for the three months to the end of September.
The trading update held little good news for investors after Computacenter posted strong first half results of an 18 per cent boost to revenue, sending shares down 18 per cent from 1,210p to 1,029p.
Computacenter’s Germany business grew by just one per cent, while even international services revenue growth of 28 per cent failed to stop the rot as the firm’s revenues slumped.
“Our expectation for the fourth quarter is for improved growth before acquisitions but not to the levels seen in the first half of the year,” the company said.
Leadership predicted interest in its professional services, but said the managed infrastructure market space is “somewhat more challenged, which is making growth more difficult”.
The infrastructure market has come under pressure in recent years from US cloud giants like Amazon Web Services and Microsoft Azure.
Still, Computacenter stuck to its July trading update for the whole of 2018, saying core drivers of cloud services, cyber security and networking “remain robust”.
“We remain confident in our ability to gain infrastructure managed services market share due to our focus on innovation and productivity improvements,” the firm added.