Computacenter, Europe's biggest PC retailer, yesterday said it was "cautiously optimistic" that the poor trading conditions seen over the past year were finally improving.
However, it admitted that it could not be more upbeat while uncertainty still hangs over the financial performance of its biggest customers and the wider economy shows signs of slowing.
The company, which was forced to issue two profit warnings last year as big clients reined in spending, may not yet be out of the woods due to its dependence on big contracts with telecoms firms, analysts said.
Sales to firms such as debt laden BT and crisis-hit Cable & Wireless account for around 14% of revenues.
Chief executive Mike Norris agreed that it was prudent to remain cautious until it became clearer whether Computacenter would be affected by any slowdown in the growth of the US economy.
"We've had a satisfactory start to 2001 and we're looking forward to a more normalised year of trading, but we will remain cautious for a while yet," he said.
Shares in Computacenter bounced up 7% in early trading yesterday amid relief that figures for the year ending December 2000 were in line with the reduced analysts' expectations which followed the profit warnings. The shares closed up 25p at 385p.
Group turnover climbed 13% to £1.99bn, but profit before tax and investment in its Biomni e-commerce venture fell from £75m to £59m.
"Some of our peer group in Europe racked up huge losses during this period so we're doing well to be in positive territory," Mr Norris added.
Analysts are cautious about the shares' prospects of climbing while market recovery remains slow and the big PC manufacturers increasingly seek to bypass resellers by selling more of their products direct to end users.
Lucy McFetrich, an analyst at Merrill Lynch, predicts that low levels of demand, higher competition, pricing pressures and low levels of profitability in the industry makes consolidation in the sector likely.
Investment in Biomni, which had been eyeing a stock market listing, cost £3.6m and is not due to be profitable until 2003.
Ron Sandler, the former chief operating officer at NatWest bank, is to take over from Philip Hulme as the group's non-executive chairman.
