Computacenter Share Discussion Threads

[boadicea] 11/7/2024 12:38

srichardson8 - Yes, I think the current softness is probably related to expectations of a negative reaction to (well-explained) flatish figures for the first half year.
However, I view this company as being on the picks and shovels side of the AI gold rush.

[srichardson8] 09/7/2024 19:26

this doesn't get a lot of pi comments though it does have a pretty remarkable and consistent profit record to date and doesn't look at all expensive on most counts. That said, it seems to be trading in a range - basically 2200 to 2900 - and has taken a sharp drop today, down more than 3% and once again failing to overcome the £30 'barrier'.
I can offer only two possible reasons.
Firstly a possible reaction to the trading update at Softcat which is in a similar business, of similar size, and reacted badly to a recent statement that expected 2024 ernings were likely to be in line with market expctations (flattish at net level).
Secondly, and perhaps more pertinently given that CCC seems to me to be so much cheaper than Softcat, some concern as to how these VAR companies are going to deal with AI.
Finally I had a quck look at trading. It was mostly very small lot until two trades posted just after the close, one for 95k and another 19k - that first one has a nominal value close to £3mn so will likely be a biggish holder crossing with a broker imo.
JUST A REMINDER (from the May TU) THAT ' Given the first half comparison we have previously highlighted, adjusted profit before tax for the first half is expected to be below the equivalent in 2023'
Interims are due September 9th.

[boadicea] 24/6/2024 19:50

Thanks rik - Now edited.

[boadicea] 24/6/2024 10:44

shallwe - I trust you have hung in with these and are now feeling a little happier.
The £30 mark can be seen as a bit of a psycho-barrier but things could brighten if the market decides to go through it. Some recent days (as mentioned above) have looked quite interesting.

[boadicea] 18/6/2024 18:09

An interesting day's trading with the price pushed up by bidding on the book (which execute in advfn's analysis as sells). A significant proportion appear to have been recycled in the closing auction.
Someone with superior market experience to mine could possibly read something useful in the tea-leaves.

[shallwe] 18/4/2024 10:30

You can blame me for the share price decline over the last few weeks, after having this share on my watch list for a few years I took the plunge at the beginning of March, the rest is history :(

[boadicea] 10/4/2024 10:25

The trajectory of this company through the past three years has been really impressive when compared to the tribulations of many others. It barely receives the recognition it deserves.

In particular I note the magnitude of its foreign earnings and wonder whether a transatlantic quotation for its shares might not have become appropriate. The dollar content of its revenue is ~40%, the largest proportion, I would guess. Accounting in USD as a simplification??

[shallwe] 20/3/2024 20:41

Just realised that my post gave a negative when it was meant to be a positive!

[battyliveson] 20/3/2024 16:22

Very good free cashflow, and cash balance, suggesting buybacks may be possible is share price languishes.

B

[bigbertie1] 20/3/2024 14:51

One negative here. The performance in the UK is disappointing! Revenue is much lower than Germany and US, and actually fell whereas all other geographies rose. And the UK adj pre-tax profit dropped 27%.

They say they are doing something about it, but I don't think they explain the problem. However I will reserve judgement for now and wait for more informed comment!

Edit. And I note they had good overall performance for 5 years from 2016, but relatively flat performance since FY21. I didn't see any mention of a buy-back either (at first reading) although they raised the subject in a trading announcement.

[thorpematt] 20/3/2024 10:41

I would buy this.

Here's why: I have read the outlook commentary. It is not negative. On the contrary.
The market Commentary is that outlook is challenging....but it doesn't say that. What it actually says is this (my comments in brackets)


Looking ahead to 2024, in the context of a continuing uncertain macroeconomic backdrop, the Group is well positioned to continue to compete and gain further market share.

(so +ve despite macro)

As anticipated, we expect to see Technology Sourcing volumes normalise in 2024 as some of the high-volume, lower-margin projects we delivered, especially in the first half of 2023, were completed.

(so +ve because they had a lot of low margin stuff which now returns to more norm)

In Services we expect continued growth while inflationary pressures are expected to moderate further.

(+ve)



Overall we expect to make further progress in 2024 with growth weighted to the second half of the year, reflecting a significantly more challenging comparison in the first half of the year than in the second half.

(So 2023 1st half comparitve is hard to beat,not so much for 2nd - this is not comment on lack of performance for 2024. It has nothing to do with that)

Looking further ahead, we are excited by the pace of innovation and growth in demand for technology. With our strength in Technology Sourcing, Professional Services and Managed Services, and focus on retaining and maximising customer relationships over the long term, we believe that we are well placed to deliver profitable growth and sustained cash generation.

(very +ve)


-----------------

Here's what I think. Iread RNS when I am awake and have time to do so. Not so the IIs. A lot of them use AI to scan for keywords (been doing it a while now, some have spophisticated software).

The "challenging" word gets picked up on the AI that IIs use...I have a brain instead.

DYOR as they say. We'll see of the BFs drop once they have digested and chatted with the company I guess. I could be wrong.

[boadicea] 20/3/2024 09:43

The half year weighting has been well explained.
Just another mad moment on the market this morning.

[shallwe] 20/3/2024 09:14

And now another so well deserved negative reaction, although the half-year weighting appears to be a bit heavier than usual.

[boadicea] 30/1/2024 18:24

Finally a well-deserved positive reaction following last week's encouraging update.

[boadicea] 24/1/2024 14:55

Possibly the most interesting part of the update is this ...
"Given the strength of our balance sheet, we are evaluating our options. Historically, Computacenter has a track record of returning surplus capital to shareholders when suitable acquisitions are not available."

With the UK market at its currently very depressed level one might have expected a number of cheap acquisitions to have been available to them over recent months.

Adjusted net funds at ~£450m are standing at about 13.7% of market cap, so failing an acquistion there appears comfortable room for a special or materially increased dividend which they seem to be contemplating.

I was pleased to see no mention of the currency headwinds I had factored in to my previous thinking.

[thorpematt] 23/1/2024 17:00

Yes more of a longer-term quality holding for me this one. Any short-term fluctuations in fortunes tend to be top up opportunities. But we will see...

[boadicea] 23/1/2024 16:49

Given the recent relative weakness of the dollar I am not expecting anything spectacular tomorrow from U.S. business when translated into sterling although continental/Germany should be ok on that score at least. Margins may depend on the sourcing currency of their sales generally and U.S turnover in particlar.
I like the consistent strategy and reliability of this company as will its customers and whatever the ups and downs of short term issues that may arise I am expecting to stick with it for the ride.

[bigbertie1] 22/1/2024 20:08

Very quiet here. Trading update on Wednesday.

[greybroath] 01/12/2023 18:59

>£9m worth of shares traded in the last two hours of trading today.

Is something imminent?

[srichardson8] 30/10/2023 18:51

TRADING UPDATE TODAY IS EXCELLENT.
'Notwithstanding that Q4 is our largest quarter and much remains to be done, we continue to believe FY 2023 will be another year of progress with growth in profitability.'
At the current price of around 2500, the current (Dec 23) year p/e is around 14.5, the RoCE looks like staying at 25%, the dividend yield is around 3% and x2.5 covered, latest publicised net cash was around £165mn (mkt cap is £2.8bn). The business is growing in the US and Germany,overall the markets they serve should continue to expand.
There is conceivably a future overhang from the large shareholdings of the founders Sir Peter Ogden (18%) and Philip Hulme (8%) but I would think these could provide an extremely attractive entry point for either a big investor or a potential buyer if those shares became available for sale.
I am obviously prejudiced as this is one of our biggest holdings but it has been a real star and shows every sign that it will continue to be so.

[justiceforthemany] 08/9/2023 17:58

Will be out at £30 if it gets there.
CEO sale in June did not help sentiment here.

[boadicea] 08/9/2023 15:53

Good to see that some comapanies can give the nay-sayers a kick up the proverbial.