Latest full year figures from ever reliable IT services business ComputerLand UK came in marginally ahead of market expectations, profits before tax rising 23% to £1.9m on as sales edged up by £1.6m to £56.4m. Particularly encouraging for investors was news of a strong year for the company's managed services division. Like many of its peers, ComputerLand is attempting to guide increasing numbers of customers towards the higher margin, more dependable managed service model and a 46% rise in the turnover attributed to this division is therefore extremely pleasing to management. More disappointing was chairman Graham Gilbert's acknowledgement that the company's hardware maintenance and IT product divisions had faced increasing competition and price deflation. The former has since been bolstered by the £1m purchase of rival Information Technology's hardware business. On the whole ComputerLand's prospects remain bright. The migration towards managed service contracts increases recurring revenue streams, cash reserves now top £7.5m and Gilbert notes a recent 'upturn in [the company's] bid pipeline'. Analyst Peter Ashworth of house broker Charles Stanley forecasts a £2.3m profit for the year to April 2005 and remains a firm believer in the stock. With the shares valued at a relatively inexpensive 12.4 times prospective earnings, and yielding a 2.2% historic dividend, it's easy to see why.