Digital disruption trends are accelerating and plays right into the FTSE 250 member’s hands


Gain to date: 13%

Original entry point: Buy at £12.10, 2 May 2019

FTSE 250 IT reseller Computacenter (CCC) said revenue and profit in the third quarter were ‘well ahead’ year-on-year as it continues to enjoy firm demand from customers across its markets. This strong revenue and profit growth is drawn against tough comparatives from a year ago, so the latest performance is all the more impressive.

The share price has recovered much of the momentum lost during a weak September and October, when global slowdown concerns dominated investors’ mindset.

Its basic software reselling operations drove the growth, which included a strong public sector performance in Germany, and a promising bounce in sales and profit in the US. 

Computacenter is forecast to deliver 16% sales growth this year, equating to 11% growth in earnings per share to 79.1p per share. Achieving these numbers would be impressive for this mature business given the economic backcloth. There could also be a special dividend on offer. Its full-year results are expected to be published in March.

SHARES SAYS: A 12-month forward price-to-earnings multiple of 16.4 remains inexpensive for a business of its stature. Keep buying.

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