Computacenter directors yesterday came under renewed pressure to revitalise the computer services firm after they admitted that the millennium bug-induced hangover that forced it to issue a profits warning in June would continue into 2001.
The chief executive, Mike Norris, said that while certain divisions were showing signs of recovery the market place as a whole remained tough. "The second half is likely to be substantially better than the first, but it may take until this time next year for normal growth rates to return," he said, as Computacenter shares fell 11% to 380p.
They now stand close to their all-time low, and way off the £15 level at which they traded in February.
Computacenter's troubles reflect a wider malaise among computer hardware and software companies which has forced several to issue profit warnings. Warnings from the likes of Unisys, Compel and EDS in the US that profits will be lower than forecast follow a reluctance among big corporate IT directors to spend on new computers and software.
Dutch firm Getronics yesterday became the latest firm to blame the millennium effect, posting a sharp fall in profits and seeing the price of its shares slump 18%.
Computacenter said that in the six months to June 30, pre-tax profits fell from £40.7m in the comparable period last year to £21.2m. France, Germany and Belgium were the worst-hit regions.
Turnover edged up from £904.8m to £926.7m. Margins fell from 22.6% to 21.2%, with the company expecting them to come under further pressure in the next few months.
Several analysts said they were looking to revise their full-year profit forecasts of around £61m - although Deutsche Bank analyst Ross Jobber said that the shares had probably already bottomed out.
Mr Jobber added that he expected trading to improve in time but given the range of other IT stocks available to traders the Computacenter shares were unlikely to be the first targeted for investment.
Mr Norris said that Computacenter also needed to improve its German business and product margins.
The general order book looks positive, with contracts from BP Amoco and Shell, Mr Norris added, while its e-business divisions were experiencing strong demand from dot.com companies.
Plans to float Biomi, an e-commerce joint venture that allows customers to order office supplies over the web which was the subject of a £2m investment during the period, have been shelved due to poor market conditions.
Computacenter shares trebled between October and February, and the company was looked upon as a major consolidator within its sector. In June it had an £85m offer for smaller rival Compel rejected, and although Computacenter is thought to be still keen to agree a deal it is unlikely to make any move until it has sorted out its own internal trading difficulties.
