London-based technology company Computacenter said the UK market “remained challenging” in the first quarter, although its business in Germany and North America performed well.

The FTSE 250-listed company said first-quarter business performance was “broadly in line” with expectations as revenue normalised following a period last year that benefited from a small number of “exceptional contracts”.

“Germany and North America delivered solid results, while the situation in the UK remained challenging,” Computacenter said on Wednesday.

It added that performance in the quarter “largely reflected the normalization of higher volume, lower margin technology sourcing contracts in North America and the excellent prior year growth in Germany.”

However, the company, which helps companies efficiently set up and manage their computer systems and software, expects adjusted pre-tax profit for the first half to be lower than the same period in 2023. This is due to lower service revenue in the first quarter as certain contracts expired.

“The strength of our integrated technology sourcing and services model, our committed product backlog and our pipeline of opportunities give us confidence in delivering stronger performance, with growth focused on the second half of the year,” the company said.

At the beginning of the second quarter, the company launched a major four-year public sector contract in the UK, secured in early 2024.

In March, Computacenter reported record revenues and profits, driven by significant investments by large companies in IT services.

The company’s shares rose 11 percent last year.