IT services company Computacenter said rapid growth of its services business was the principal reason for the improvement in net profit margins at both the UK and Group level plc.

Commenting on results which showed Group turnover up 11.0% at £1.76 billion (1998: £1.59 billion) and pre-tax profit up 16.3% to £75.1 million (1998: £64.6 million) Chairman Philip Hulme said: "I am delighted to be able to report another record year for Computacenter - our seventeenth successive year of turnover and profits growth in the UK. These results are particularly pleasing because 1999 was an exceptionally difficult year to forecast.

"Most of Computacenter's customers spent heavily in preparation for the new millennium but a great deal of this work was completed in the early part of 1999 and in 1998. The consequence was that the sales of product slowed, as expected, towards the end of 1999 as customers endeavoured to 'lock-down' their IT systems."

By the end of 1999, over half of Computacenter's staff were employed directly in the provision of professional and managed support services to its clients.

Much of Computacenter's growth in 1999 was due to expanding relationships with existing long-term corporate customers such as Scottish & Southern Energy plc. In particular, this was reflected in the demand for managed services, where the growth in the contract base was greater than for the company as a whole. UK staff numbers in Computacenter's Managed Services Division grew to 1,907, an increase of 22.2%. New managed service contract customers include Avis Europe plc and Save the Children UK.

Richard Byatt