Logica warns on wireless profits
Management to walk plank?
LogicaCMG warned yesterday that its wireless division was likely to see sales fall 10 per cent in the first half of this year and institutional investors warned the management that their days were numbered.
Logica, which provides software for sending SMS messages and for mobile billing, blamed longer procurement times for falling revenues. It said media messaging projects were more complex so sales lead-times were longer. But big shareholders were not sympathetic.
Martin Read, chief executive at Logica, said the company was making good progress with media messaging and mobile payments. But one institutional investor, speaking anonymously to the Independent, said: "The market is deeply suspicious of the company's forecasts. We are not keen on the management. We think Martin has been wildly optimistic on the messaging business and continues to cling to that." Another investor told the paper he expected to see a turnaround within a year or there would be management changes.
Sales for Logica's IT services division have been in line with expectations. Logica expects its wireless division to be profitable for the full year. Full results will be announced on 1 September. ®