July 17, 2012 / 8:27 AM / in 5 years

UPDATE 1-Computacenter says firming up to take on new contracts

2 Min Read

* H1 rev up 4 pct on reported basis

* Says on track to address challenges in Germany

July 17 (Reuters) - IT company Computacenter Plc said revenue grew 4 percent on a reported basis for the first half of the year and it was strengthening its ability to take on new contracts.

Computacenter, which provides IT infrastructure services and also advises customers on IT strategy, also said it was on track to address challenges in key market Germany where it has won several new contracts.

Contract start-up costs are a challenge in Germany and Computacenter's management devoted considerable time to address that, Investec Bank analyst Julian Yates wrote in a note.

"Progress on this front during H2 will be crucial and achieving satisfactory profitability on some of these contracts would give material forecast support," said Yates who has a "buy" rating on Computacenter's stock.

Computacenter, which gets most of its business from Eurozone countries, also said its revenue grew 8 percent in constant currency for the six months ended June.

Services revenue rose 15 percent in constant currency while supply chain revenue grew by 4 percent.

The company also said it continues to see additional start-up costs hurting full-year profit.

Computacenter said last month that it would incur 7 million pounds in additional costs related to hiring and sales commissions to bring on board some large contracts it won.

This additional cost is about 10 percent of the adjusted pretax profit it reported last year.

Shares in Computercenter were up 1.8 percent at 316.9 pence on the London Stock Exchange at 0817 GMT.

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