Computacenter Share Discussion Threads

[boadicea] 11/11/2022 12:25

A recession, two year or otherwise, can only be "confirmed" after it has happened.
Ah, so they mean they confirm that it is predicted ... and we know how accurate predictions can be!

That said, we do actually need a recession to free up some labour for the jobs that need doing and force us to face economic reality.

However, there is little sign of recession at CCC and the market now seems to be waking up to the value here.

[fuji99] 03/11/2022 12:22

Although long term CCC is sound, one has to be a bit careful as a 2 year recession is confirmed by the BoE.: - - -

[bigbertie1] 29/10/2022 19:23

Thanks for the quotes. I'm holding onto the shares anyway - I'm just a bit wary of high inventories! Good luck all

[boadicea] 28/10/2022 14:04

There have indeed been deliveries held up by inability to complete the fitting critical components. The company has also been carrying higher uncommitted stock levels in an attempt to avoid such delays as reported in the last interim report - "With the exception of networking products where difficulties still remain, supply chain challenges have eased materially in the last 3 months. However, our customers have become extremely sensitive about supply chain shortages, and as such require us to hold more inventory, impacting our balance sheet...."
Whether due to uncommitted component stock or wip delays, an unwinding of the supply chain issues should be positive for inventory levels.

[fuji99] 28/10/2022 12:05

Bigbertie - Agree with you that some hardware shortage is one possibility as already flagged up by SCT operating in the same sector: "We were able to effectively navigate the ongoing hardware supply chain challenges throughout the year. More recently there is some evidence that the supply chain situation is improving, at least for end user devices, although shortages on some storage and networking hardware lines look set to continue well into the new year."

[bigbertie1] 28/10/2022 11:04

boadicea, I don't think the higher stocks are "precautionary". I think they are mainly orders which cannot be shipped until complete and have a few remaining items missing due to supply chain issues (maybe continued China lockdowns or microchip shortages). It's very frustrating - shipments and therefore revenue are being held up for a few items!

[fuji99] 28/10/2022 09:33

A great company but won't be the exception when one looks at the US recent results:
The state of the world economy is starting to show via the US bellwethers. From Microsoft to Google/Amazon. The UK could be worse. So CCC won't escape the stagnation. Even CCC flagged up the slowdown next year.
MSFT 231.32 (-7.72%)
AMZN 115.66 (-4.10%)
META 129.82 (-5.59%)
NVDA 128.96 (-2.75%)

[boadicea] 28/10/2022 09:08

An interesting update this morning. Not quite a profit warning but a message to restrain our expectations as they go for future growth rather than maximise current returns. At least the unwinding of the precautionary high stock commitments should lead to healthy cash flow from that source coupled with the implication that it will be diverted to supporting the growth targets.
Maybe we should be expecting an acquisition or two. There are a number of small players in the relatively volatile cybersecurity field which might fit into their plans. Some of them seem rather expensive or too niche to be of wide interest; others look remarkably cheap but usually for a reason such as a stretched balance sheet or dubious history.
The share price progression seems to have already anticipated this scenario and further or exaggerated weakness would seem unjustified at present, given that there are positive as well as negative factors in the current mix.

[shauney2] 27/9/2022 23:10

It's also worth looking at the Hadley trust via Philip Hulme.htTps://www.investegate.co.uk/Index.aspx?searchtype=1&words=Philip+hulmeWhatever his intentions CCC has got to be top of the pile of any US interest with its cash pile, cheap rating and US earnings.

[boadicea] 27/9/2022 21:25

That's a huge holding to acquire from nothing previously notified. It would be interesting to know the background and whether it has a particular significance for the run of the mill shareholder.

Edit: The answer in part is here, the significance is less obvious -

[countryboy] 09/9/2022 17:01

How long before we see interest from private equity firms in the US at current exchange rate?

[countryboy] 09/9/2022 16:57

How long before we see interest from private equity firms in the US at current exchange rate?

[boadicea] 09/9/2022 11:25

One fact to note is that the profit reduction in H1 is due to the product mix including some large low margin contracts as previously flagged. We can only trust that these create good entry points to future opportunities. Importantly the reduction is totally unrelated to the revenue reduction resulting from the change in recognition criteria which appear very sensible andcorrect. This will improve the notably low price/revenue ratio of the stock.

Today's market reaction seems unduly harsh on a stock that has not looked over-valued compared to its peers and which should also be gaining from currency rates - about 1/3 income is in dollars. If it comes good on the outlook statement, "... we remain on track to deliver our stated expectations of profit growth for the year as a whole", then it will look distinctly cheap at today's price imho.

PS: Out of interest I decided to compare the price/revenue figure for CCC with some others in the broad sector. CCC is quoted on advfn as 0.4 and falling. (It will be higher under the new revenue recognition rules, probably nearer 0.5.)
At the other extreme was CER with a ratio of 10.9 and rising ! (I excluded blue sky floating-on-air companies with negligible revenue.)

[ironstorm] 09/9/2022 10:34

so has the market . . .

[mngf] 09/9/2022 09:03

I read this negatively, was surprised by lack of reaction first up

[ironstorm] 09/9/2022 07:52

Not a profit warning. An in-line forecast for the year and a planned reduction in profit this half.

[scepticalinvestor] 09/9/2022 07:25

Ouch profit warning

[boadicea] 02/9/2022 09:41

Wake up and read the date! It closed up on the 31st Aug when the market was generally down.
Everything (almost) closed down on 1st Sep including CCC as you saw.

[countryboy] 01/9/2022 17:46

How was it a good day? Closed 3.2% down.

[boadicea] 31/8/2022 16:34

With dollar income accounting for almost 30% of revenue (similar to UK) and the pound weak, it is perhaps not surprising that we are having a good day somewhat against the trend. Maybe also some optimism ahead of interims slated for Friday week.

[boadicea] 29/4/2022 17:55

The company seems to be following a sensible strategy which should pay off in the medium to long term.
"There are clearly many challenges in the world and we, like most companies, are affected by wage inflation and supply chain shortages, but these offer us opportunities to differentiate from our competition with superior execution."

It looks good value to me and any short term weakness (not unlikely in current market conditions) could be an advantageous opportunity to accumulate.

[aewail] 29/4/2022 12:13

A very pleasing Q1 2022 Trading Update.With strong top line growth - Onwards and upwards.https://www.proactiveinvestors.co.uk/LON:CCC/Computacenter-PLC/rns/1133083

[matthew palmer] 09/4/2022 12:41

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Click my name and send a message.

[boadicea] 04/4/2022 13:05

Shadowing the £30 threshold tantalisingly for some time now and looking resilient in the face of market worries. At least the heavy share price discourages lightweight day traders. Ultimate progress will depend substantially on how well the company continues to manage supply line issues compared to its competitors.
On traditional metrics it continues to look very good value to me.
Maintaining customer loyalty through difficult times by accepting some pressure on margins due to purely temporary factors (eg: increased stock-holding, transportation cost spikes etc.) could be a price worth paying for future growth.