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Computacenter's H1 2025 shows strong revenue growth led by North America, though margins tightened. Full-year profit guidance remains ahead of 2024.
This article covers information on Computacenter PLC.
LON:CCCLast updated:
Computacenter has delivered a strong first half on the face of it, powered by a record performance in North America and a welcome return to growth in the UK. The trade-off: margins tightened, cash flow went backwards due to working capital, and Europe – particularly France – was soft. Guidance is unchanged, with management still expecting full-year adjusted operating profit ahead of 2024, despite a circa £4 million FX headwind.
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Gross invoiced income (GII) | £5,665.3m | £4,536.6m | +24.9% |
| Revenue | £3,988.8m | £3,103.8m | +28.5% |
| Gross profit | £504.2m | £472.2m | +6.8% |
| Gross margin | 12.6% | 15.2% | -257 bps |
| Adjusted operating profit | £82.1m | £81.1m | +1.2% (+4.2% cc) |
| Adjusted profit before tax | £81.5m | £87.2m | -6.5% |
| Adjusted diluted EPS | 52.5p | 55.0p | -4.5% |
| Interim dividend | 23.6p | 23.3p | +1.3% |
| Net cash from operating activities | -£165.8m | £1.4m | Outflow |
| Adjusted net funds | £278.0m | £401.9m | -30.8% |
| Product order backlog (GII basis) | £2,195.9m | £1,775.0m | +23.7% cc |
Quick jargon buster: Gross invoiced income (GII) is the value of all customer invoices including items booked as agent under IFRS – it is a good proxy for volume. Basis points (bps) are hundredths of a percent.
Mix matters: a heavier skew to hyperscale and AI infrastructure pulled gross margin lower (North America revenue margin down 286 bps), but the sheer volume more than compensated in profit terms. The region contributed 44% of adjusted operating profit before central costs.
The UK benefited from AI-related data centre projects and better execution with target customers. Managed Services remains a work-in-progress, but the pipeline – especially Device Lifecycle Management – is improving.
Both countries felt the impact of political change and lower public sector buying. Management expects some recovery in German public sector activity in H2; France is flagged as remaining challenging.
Group gross margin fell 257 bps to 12.6%. The story is straightforward: North America delivered much higher Technology Sourcing volumes at lower margins, especially into hyperscale customers and AI builds. Services margin actually improved by 80 bps, and Professional Services grew 6.5% in constant currency. The mix dilutes percentage margins, but not necessarily pounds of profit – which is why adjusted operating profit still grew at constant currency.
Operating cash outflow of £165.8 million looks ugly, but the company explains two drivers: the unwind of unusually strong year-end customer prepayments (circa £100 million ahead of the prior year at 31 December 2024) and heavier H1 activity pushing up receivables and inventory. Working capital outflows totalled £251.2 million.
Bottom line: still a strong balance sheet with ample liquidity, but investors should expect cash generation to skew to H2 as usual.
The interim dividend is up 1.3% to 23.6p, consistent with the policy of paying roughly one third of the prior year’s total dividend and targeting 2-2.5x cover on adjusted diluted EPS. Since 2013, over £1 billion has been returned to shareholders, and adjusted net funds remain healthy post the 2024 buyback.
The committed product order backlog stood at £2,195.9 million on a GII basis, up 23.7% year on year in constant currency, with healthy positions in all geographies. Managed Services pipeline is larger, and Professional Services continues to benefit from AI, workplace refresh ahead of Windows 10 support ending in October 2025, and data centre work.
Computacenter is spending to stay competitive: £21.9 million on strategic initiatives in H1 (H1 2024: £17.6m). This includes moving Service Desks to a common platform, upgrading Integration Centers, rolling out CRM and pricing tools, an ERP upgrade, and further cyber investment. Short-term pain in costs, but sensible levers for long-term productivity and scalability – particularly relevant as AI-related infrastructure demand ramps.
This is a classic high-volume, low-margin half where scale and execution did the heavy lifting. The North American machine is humming, the UK is improving, and Germany has a credible H2 catalyst. France is the weak spot. Cash outflow is notable but explained, and leverage is low.
Why it matters: the growing base of major customers – now 197 – plus a bigger backlog makes the earnings base more resilient. If Germany’s public sector spend returns as flagged, and North America stays buoyant, the full-year ambition of higher adjusted operating profit looks realistic. Watch the mix – if Services keeps nudging margins up while Technology Sourcing maintains momentum, the quality of earnings improves. For income investors, a rising interim dividend and strong balance sheet are comforting. For growth-focused holders, the AI infrastructure wave remains the near-term tailwind to watch.
Computacenter’s H1 2025 shows a company leaning into scale: big volumes, slimmer margins, and a growing footprint of major customers. The balance of risks looks manageable, guidance is intact, and the order book is stronger. If European public sector spend normalises and cash conversion improves as usual in the second half, shareholders should see that top-line momentum translate more cleanly into earnings and cash.
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