IT firm Computacenter's revenues have risen after strong rebound in UK sales.
The IT services provider said that WM Morrison and Lloyds Banking Group, who it provides infrastructure for, helped it grow the business by 12 pct.
Overall, including France and Germany, revenues were up a very respectable 7 pct whilst services revenue grew by 2 pct.
"Whilst it is not certain that these growth rates can be maintained throughout the year, the signs are encouraging. Our services business has seen slower growth than we have become used to, but we are expecting this to improve as the year progresses." the statement read.
"After a slow start to the year, our German business is showing some improvement. Trading this year to date across the Group has increased our confidence of another year of progress for Computacenter, in line with management expectations. "
George O'Connor, analyst at Panmure Gordon commented:
"Computacenter did not get where it is today by just selling product – but the product sales are very strong and ahead of our expectations. We think that the clearly successful Windows 7 is the causal factor, but so too is that Computacenter dominates the channel. Certainly there has been a dip in services sales but we are encouraged by the progress and the economic uncertainty helps managed services as it focuses users on reducing operating costs. Most pleasing though is that Germany experienced a "material" recovery. Computacenter teases us with news of further cost reductions; we can only lick our lips at the prospect of the operating leverage effect. To be sure there are grounds for tweaking estimates but in deference to the current economic backdrop (more so than IT backdrop) our top-of-the-range estimates are unchanged. However, a better product sales and outlook re-rates the product business in our SOTP model, a move that has increased our target price from 386p to 391p. We retain our Buy recommendation."