FT.com / Companies / IT - LogicaCMG sees strong growth in Europe

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