Logica Revenue -2% Excl Currency; Cost Cuts Help Operating Profit Rise
07 August 2009 - 5:01PM
Dow Jones News
Anglo-Dutch computer services company Logica PLC (LOG.LN) Friday
reported first-half revenue fell 2% when adjusted for the effect of
sterling's weakness, but cost cutting of GBP30 million helped
adjusted operating profit to rise 7.6%.
The revenue decline on a pro forma basis was in line with
company forecasts, and the second half is expected to reflect a
similar level of decline, the company said.
Logica provides consulting, outsourcing and IT services to
companies in Europe, competing with International Business Machines
Corp. (IBM), Hewlett Packard Co.'s (HPQ) recent acquisition EDS,
and France's CapGemini (CAP.FR) and Atos Origin (ATO.FR) for a
share of the business market that has been shrinking as companies
scale back projects in the downturn.
Logica reported first-half revenue climbed to GBP1.88 billion
from GBP1.77 billion in the same period a year ago, up 6% on the
weaker pound, but down 2% excluding currency effects.
Operating profit adjusted for exceptional items and
amortization, rose 7.6% to GBP127 million, ahead of consensus
estimates of GBP120 million.
Net profit rose to GBP21.2 million from GBP6.1 million on the
improved operating profit and lower taxes and finance costs.
The company reiterated its outlook for the second half, saying
that it expected the remainder of the year to be similar to the
first half, and adding that margins are expected to be at the same
level as last year.
Chief Executive Andy Green said, "While there is still
uncertainty in the consulting and professional services market, we
have taken swift action in more difficult geographies to protect
margins."
Shares closed Thursday at 109 pence. They have risen 60% in
value since the start of 2009.
Company Web site: www.logica.co.uk
-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293;
kathy.sandler@dowjones.com