Shares in British technology company Computacenter jumped 13 per cent on Monday after the firm upgraded its annual profit forecast for the fourth time this year.
The rally lifted the Hertfordshire-based company's stock by 600p to 5190p, valuing the business at £5.5 billion and taking its share price gains over the past 12 months to 85 per cent. Monday's surge also added more than £200 million to the fortunes of co-founders Peter Ogden and Philip Hulme.
Computacenter told investors it now expects to report annual profits of no less than £425 million this year. That marks a sharp increase from the £380 million target the company set less than two months ago, driven by strong demand for its hardware and services from customers building data centres for artificial intelligence.
Order backlog and third-quarter trading
In Monday's trading update, Computacenter said its third-quarter performance beat expectations, building on a strong first half of the year. The group reported that its order backlog climbed from £9.3 billion at the end of June to £12.6 billion at the end of September.
In the corporate computer supply sector, an order backlog tracks the total value of contracted customer orders for hardware and installation services that have been placed but not yet completed. Computacenter said business during the third quarter was driven by hyperscale and neocloud customers in North America and the United Kingdom.
Hyperscale operators are the largest global cloud computing and internet platforms, which run vast networks of server facilities. Neocloud providers are specialist firms that build and rent out dedicated clusters of high-performance computing hardware tailored to train and run artificial intelligence models.
Founders add over £200 million on stock surge
The jump in the share price delivered another major boost for Ogden and Hulme, who founded Computacenter in 1981 and still sit on its board of directors. Ogden saw the value of his near-25 per cent holding increase by £157 million to reach £1.36 billion.
Hulme's 7.6 per cent slice of the company rose by £48 million, valuing his stake at £417 million. Both founders have retained large shareholdings since floating the business on the stock market in the late 1990s.
A former banker at Wall Street investment bank Morgan Stanley, Ogden served as Computacenter's chairman until 1998, when he became a non-executive director. Hulme stepped down as executive chairman in 2001 and remains on the board alongside him.
Outside the computer industry, Ogden co-owns MotorSport Vision, an operator that runs six motor racing tracks across the United Kingdom, including Donington Park. In May 2024, Ogden's children bought a controlling share in his hometown football club, Rochdale.
Analysts weigh AI hardware demand and margins
Market observers noted that the company, hailed as "a rare UK-listed beneficiary of the AI arms race", is capitalising on heavy capital spending by technology groups. Although wider doubts persist in financial markets over how long the current artificial intelligence spending splurge can last, Computacenter is part of a small group of British listed companies profiting from the build-out.
Neil Wilson, an investor strategist at trading and investment specialist Saxo, said Computacenter is cashing in "off the back of surging AI demand in the US and UK".
Russ Mould, investment director at investment platform AJ Bell, said the company occupies a practical role in supplying and setting up the physical machinery needed for advanced computing.
"Computacenter is effectively acting as a middleman in the AI infrastructure build-out, procuring, assembling and installing the complex hardware required to run artificial intelligence models," Mould said.
Mould noted, however, that sourcing and assembling physical data centre equipment carries tighter profitability than software licensing or IT consulting, because hardware resellers must buy expensive servers and components from manufacturers before delivering them to clients.
"One modest downside of how dominant this work is becoming for Computacenter is that it is typically lower margin than areas like software sales and the provision of other tech-related services," Mould said.
From corporate IT contractor to FTSE 100 entrant
Once viewed by investors as a traditional and unglamorous computer supplier, Computacenter began acting as an information technology services contractor for large British businesses during the 1990s. It subsequently expanded into continental Europe and the United States and listed on the London Stock Exchange in 1998.
The company's shift toward data centre hardware and engineering services accelerated in 2022 when it won a contract with what it described as "one very large volume customer". Analysts believed that client to be Facebook owner Meta, which was investing heavily to build computing infrastructure for its "Metaverse" augmented reality project.
The subsequent artificial intelligence boom propelled Computacenter into the FTSE 100 in June this year. The flagship London index tracks the 100 largest companies on the exchange by market value and has long been weighted toward banking, energy and mining groups, leaving Computacenter as one of its few technology stocks.
Investors will now look to management's upcoming briefing next month for further detail on long-term growth. As Mould added: "Having been seen as being at the dull end of the technology space, Computacenter's recent growth trajectory has been anything but. Next month's strategy day is management's opportunity to show this isn't just a flash in the pan."
