Computacenter, the distributor of computers and associated hardware, failed to convince investors that its business was recovering from a series of contract losses today.

The group reported full-year pre-tax profits of £38 million, up from £36 million a year earlier.

Revenues were flat at £2.3 billion for the year to the end of December and the company admitted that results from Germany and France were disappointing.

Shares in the group were down 3.5 per cent, at 274.25p in morning deals, giving the company a market value of about £440 million.

Until today, the shares had gained about 15 per cent since a failed management buyout attempt in January 2006.

Computacenter also failed to provide any information on a major contract with BT, under which it manages the telecoms groups desktop computers. The contract runs out at the end of this month.

In 2005 Computacentre profits plummeted by about half as key clients chose to bypass the group and businesses bought hardware directly from manufacturers.

The company has since sought to shift itself into the services market.

Ron Sandler, the chairman, said in a statement: "The results reported today show the early signs of progress arising from the considerable efforts in recent years to improve the strategic positioning and operating performance of Computacenter."

Results in its core UK business were mixed, however.

UK revenues fell by 5.2 per cent to £1.3 billion, as modest services growth failed to offset a 7 per cent slide in sales of hardware.

On its prospects for this year, Computacenter said that it was 'difficult to draw any meaningful insights from current trading'.

Computacenter said that it would pay a final dividend of 5p a share.

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange