Computacenter's woes to continue

SHARES in Computacenter slumped nearly 20% as the troubled hardware reseller and IT services firm warned investors that profit this year will be 'substantially' below market estimates, dashing hopes that it was turning the business around.

Difficult trading conditions in the first quarter - when sales slumped 10% - continued into the second quarter, and total first- half sales are expected to be down by about 10% on the year.

Chief executive Mike Norris said the company sees no chance of an improvement in trading conditions for the rest of the year.

'The improving trend seen at the end of the first quarter was not sustained and product sales in the second quarter have been below our expectations,' said a company statement. The shares were off 39¾p at 192¼p.

Norris said the company would tackle sliding sales by re-engineering its cost base. He also warned the final sales outcome will 'rely heavily' on the last few days of the quarter and said the company will give a more detailed analysis of first-half trading conditions and strategy at a meeting with investors and analysts on 5 July.