FT.com / Companies / IT - LogicaCMG sees strong growth in Europe
LogicaCMG sees strong growth in Europe
By Alan Cane
Published: November 5 2007 08:51 | Last updated: November 5 2007 08:51
LogicaCMG, the Anglo-Dutch computing services group, said it expected full-year revenue growth for 2007 to be about 3 per cent at constant currency after strong performances in France and the Netherlands offset continuing weakness in the UK and Asia. Last year the company reported full-year revenues of £2.6bn.
In a generally cautious interim statement, the first it has issued under the new reporting requirements, the company predicted that growth in demand for IT services in Europe in 2008 would be broadly comparable with the current year at about 4 to 6 per cent. The Andy Green, a BT executive, takes over as chief executive at the beginning of next year, following the retirement of Martin Read.
The company, which has made a number of controversial acquisitions in the past few years, also said it intended to use the single brand name Logica from next year, a transition that will involve incremental costs of about £5m. The change, it said: “will help us to enhance our brand recognition internationally amongst customers, partners and employees”.
Turnover for the nine months of the year to September 30 was £2.24bn compared with £2.15bn for the comparable period last year, with revenues in the third quarter at £710.5m (£683.4m) representing growth of 4 per cent on a pro forma constant currency basis.
Jim McKenna, interim chief executive, said revenue growth above the market in France, the Netherlands and the Nordic region was partially offset by weaker performances in the UK and in the company’s international business: “In the UK, we remain focused on improving operational performance in our commercial business and were pleased with the return to growth in the energy and utilities sectors in the third quarter,” he said.
Revenues in France were up 17.1 per cent to £136.7m on a pro forma basis. The company said it continued to win new cross selling orders and was awarded an SAP governance and risk compliance project to be delivered out of France and Belgium together with a €7m project for the French postal service.
International revenues, however, were down 3.4 per cent at £74m and the company said it expected broadly similar results in the fourth quarter with some impact on margins compared with last year.
It has now completed a £130m share buyback scheme. It has not seen any material impact on its financial services business from the recent difficulties in the capital markets and the recruitment market remains competitive with high demand for specialist IT skills, the statement said.
Copyright The Financial Times Limited 2007
Tuesday, November 06, 2007
Monday, November 05, 2007
FT.com / By sector - Study urges IT valuation rethink
FT.com / By sector - Study urges IT valuation rethink
Study urges IT valuation rethink
By Pan Kwan Yuk in Paris and Philip Stafford in London
Published: November 4 2007 23:52 | Last updated: November 4 2007 23:52
Companies need to dramatically rethink the way they manage and value their information technology assets if they are to extract better returns from these investments, according to a study published on Monday.
Describing IT hardware and software as the “last remaining hidden corporate asset”, the study, commissioned by Micro Focus, a UK software developer, said core IT assets should be valued with the same rigour and discipline as other corporate assets such as brand and goodwill.
Insead, the Paris-based business school that carried out the research, said that while IT now plays a vital role in driving corporate performance, companies have continued to treat their IT not as assets for value creation but as an expense item to be minimised.
“It’s astounding,” said Soumitra Dutta of Insead.
“While firms have long focused on creating value from physical assets such as factory or store space and intangible assets such as brands, IT assets as a vehicle for value creation have remained largely ignored.”
One problem, according to Prof Dutta, is that even though companies spend billions on IT every year, few boardrooms know the value of their hardware and software and the contributions that they make to their business.
In a study released last month, Micro Focus and Insead found that of the 250 chief information officers and chief finance officers surveyed from companies in the US, UK, France, Germany and Italy, fewer than half had tried to value their IT assets, while 60 per cent did not know the worth of their software.
“When it comes to technology, people tend to get lost in jargon and focus on the new and shiny,” said Stephen Kelly, chief executive of Micro Focus. “Very little thought goes into the benefits that result from the new system and almost none to deriving maximum value from it.”
Yet Prof Dutta said that the potential savings for companies who take the time to analyse the value of their software assets could be huge.
“Think of a house,” he says.
“Would you knock down an entire house when what you need is to update the kitchen? No.
“Yet we see companies spending millions of dollars to build a new IT system every other year when, in many cases, what they needed was just to update the existing one.”
One way Prof Dutta says companies can measure the business value of their core IT assets is through conjoint analysis, a statistical technique used in market research in which people make trade-offs across different attributes.
Copyright The Financial Times Limited 2007
Study urges IT valuation rethink
By Pan Kwan Yuk in Paris and Philip Stafford in London
Published: November 4 2007 23:52 | Last updated: November 4 2007 23:52
Companies need to dramatically rethink the way they manage and value their information technology assets if they are to extract better returns from these investments, according to a study published on Monday.
Describing IT hardware and software as the “last remaining hidden corporate asset”, the study, commissioned by Micro Focus, a UK software developer, said core IT assets should be valued with the same rigour and discipline as other corporate assets such as brand and goodwill.
Insead, the Paris-based business school that carried out the research, said that while IT now plays a vital role in driving corporate performance, companies have continued to treat their IT not as assets for value creation but as an expense item to be minimised.
“It’s astounding,” said Soumitra Dutta of Insead.
“While firms have long focused on creating value from physical assets such as factory or store space and intangible assets such as brands, IT assets as a vehicle for value creation have remained largely ignored.”
One problem, according to Prof Dutta, is that even though companies spend billions on IT every year, few boardrooms know the value of their hardware and software and the contributions that they make to their business.
In a study released last month, Micro Focus and Insead found that of the 250 chief information officers and chief finance officers surveyed from companies in the US, UK, France, Germany and Italy, fewer than half had tried to value their IT assets, while 60 per cent did not know the worth of their software.
“When it comes to technology, people tend to get lost in jargon and focus on the new and shiny,” said Stephen Kelly, chief executive of Micro Focus. “Very little thought goes into the benefits that result from the new system and almost none to deriving maximum value from it.”
Yet Prof Dutta said that the potential savings for companies who take the time to analyse the value of their software assets could be huge.
“Think of a house,” he says.
“Would you knock down an entire house when what you need is to update the kitchen? No.
“Yet we see companies spending millions of dollars to build a new IT system every other year when, in many cases, what they needed was just to update the existing one.”
One way Prof Dutta says companies can measure the business value of their core IT assets is through conjoint analysis, a statistical technique used in market research in which people make trade-offs across different attributes.
Copyright The Financial Times Limited 2007
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