Computacenter ends the year on a high

UK premier reseller Computacenter has seen a very eventful 12 months, to say the least. And while it has had its ups and downs - one only has to look at the share price, for one thing - it finished the 20th Century on a relatively high note.

January: It begins the year reorganising its salesforce into eight teams to cover niche and geographical markets under UK sales director Andy Chudzik. The teams were set up to cover City and banking operations; commercial business, south (outside the City of London); financial business, south; financial and commercial business, north; Scotland regional sales; government; and open systems and sales administration. It follows relocation of the sales office from Maidenhead to Reading last year, making 13 sales offices in the UK.

March: Computacenter sees a 37 per cent rise in pre-tax profit to £64.6 million for the year ended 31 December 1998 and turnover up 40 per cent to £1.6 billion. Shares rise 23.5p to 523.5p on the strength of this, though not enough to restore them to the May 1998 IPO price of 670p. The hike signals a recovery from a recent plunge triggered by a slump in IT stocks and the City's perception of Computacenter's over-reliance on its reseller business for revenue.

April: The reseller giant attains the highest level of Microsoft accreditation, as it becomes a Microsoft Authorised Support Centre (ASC) after 18 months hard work, taking it a step closer towards its goal to become a services-led company. Six months after appointment as a Microsoft Alliance Partner, Computacenter becomes the first reseller in the UK to qualify as an ASC since the scheme's inception six years before, joining Compaq, Wang, Hewlett-Packard, Unisys and ICL Multivendor Computing as Microsoft's ASCs in the UK.

May: Computacenter, in conjunction with Compaq Services, wins a £13.5 million contract with National Power to supply hardware and services to the utility over five years. Computacenter is responsible for the procurement of servers, desktop PCs and notebooks, while Compaq provides desktop management services for National Power, which has also chosen Compaq as its preferred desktop hardware supplier, replacing Dell and AST.

A five-year investigation into racial discrimination at the reseller giant finally comes to an end, when Computacenter publicly signed an agreement with the Commission for Racial Equality (CRE), which a CRE representative said would hopefully "lay the basis for development of race equality employment practices at Computacenter."

June: Computacenter begins a run of acquisitions, with the purchase of the distributed systems and services division of ECS International, Belgium for 1.64 million euros. One of the ten largest corporate distributed systems and services providers in Belgium, the division had revenue of over 20 million euros in 1998, and was to be the foundation of Computacenter's Belgian unit, Computacenter NV/SA, based in Brussels, with plans to establish a branch in Luxembourg.

July: After months of sleepless nights, Computacenter manages to renew its lucrative four-year BT contract - worth £50 million and the largest IT contract in Europe - staving off competition from ICL, Compel and Dell. Computacenter has been BT's supplier for the past four years. Shares climbed 31p to 543.5p on the deal. Also, Computacenter acquires Datrontech recycling and disposal subsidiary RDT for £1.9 million in cash, ending the unit's brief but expensive association with the distributor. Datrontech had bought RDT two and a half years prior for £5 million, half in cash and the remainder as an earn-out.

August: One month into Computacenter and BT's renewed contract, they are sued jointly for breach of contract, misrepresentation and unlawful interference with a contract, with damages claimed in excess of £800,000. Switch Information Technology, a Hampshire computer disposals reseller, alleges that both parties reneged on a deal to remove IT equipment for the telecoms giant's millennium compliance scheme.

Computacenter records a pre-tax profit for the six months ended 30 June, up 30 per cent to £40.7 million, up from £31.3 million for the same period last year. Turnover increased almost 17 per cent to £904.8 million, compared with the same period last year.

September: Computacenter refutes rumours that it is to acquire maintenance and services rival Synstar for £250 million. Despite raging speculation about a deal between the companies, both Synstar and Computacenter categorically deny they are in talks to merge their operations.

October: Computacenter bolsters its enterprise distribution business by acquiring CHS subsidiary Metrologie for an undisclosed sum. Placing the unit under its Computacenter Distribution (CCD) arm, the reseller claims it will enable the division to focus on resellers serving SME and niche markets, and move into selling application systems.

November: Computacenter and software developer Computasoft eCommerce establish a joint venture, Biomni, to attack the growing business to business ecommerce market in the UK and mainland Europe.

The reseller also signs a multimillion pound deal with Gateway to distribute and offer services around the direct vendor's PCs in the government and corporate sector. The joint operation is called Service Direct, running initially for two years and piloting in the UK before launching into the rest of Europe.

December: Computacenter's share price receives a massive boost in the run-up to Christmas, rising more than 30p in one day. It spends the New Year hovering around the 1000p mark.