August 30, 2013 / 10:07 AM / 4 years ago

UPDATE 1-Computacenter swings to loss on impairment charge, provisions

* Statutory pretax loss of 4.3 million stg

* Exceptional items total 29.3 million stg

* Adjusted profit before tax rose 1.9 percent to 26.2 million stg

* Expects trading to remain in line with expectations

* Business in France not expected to improve over the second half

By Tasim Zahid

Aug 30 (Reuters) - British IT services provider Computacenter Plc swung to a pretax loss in the first half, as it set aside more money for future losses on three contracts in Germany and took an impairment charge in France.

The company, which provides IT infrastructure services and also advises customers on IT strategy, reported a pretax loss of 4.3 million pounds ($6.66 million) in the six months ended June 30, compared with a profit of 20.8 million pounds a year earlier.

Computacenter said exceptional items totalled 29.3 million pounds, including a 10.7 million pound provision against future losses on three contracts in Germany and a 12.2 million pound charge due to deterioration in business performance in France.

“France was worse than I was expecting, but at the same time, Germany was better than what I was expecting. The narrative for UK was more positive than the pre-close statement,” Panmure Gordon analyst George O’ Connor told Reuters.

Trading losses on the three contracts in Germany widened to 5.9 million pounds from 1.7 million pounds a year earlier.

The company had said last month that it would make provisions for these contracts, expected to end between late 2014 and mid 2016. It had made provisions for 2.1 million pounds in December 2012.

Computacenter, which gets most of its business from Eurozone countries, said adjusted profit before tax rose 1.9 percent to 26.2 million pounds.

The company said it expected trading for the rest of year to remain in line with its expectations, and its UK business was likely to finish the year ahead of original expectations.

“I don’t see any underlying improvement in the business in France (in the second half), but there has been better performance in the UK and Germany,” Computacenter Chief Executive Mike Norris told Reuters.

France contributes about 16 percent to total revenue, while Germany and UK contribute about 40 percent each.

Computacenter said in May it would return a one-off 75 million pounds to it shareholders.

The company’s shares, which have risen about 29 percent since the beginning of the year, were up marginally at 515 pence at 0955 GMT on the London Stock Exchange.

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