Feeds

Logica profits hit by misers in public sector

Plan A: still hurting

Top 5 reasons to deploy VMware with Tegile

Logica is continuing to shift its order book from the public sector toward the commercial markets following a tough first half-year that challenged margins and gave operating profits a pounding.

The IT service provider and consultancy's sales for calendar H1 were up 5 per cent to just shy of £2bn and it expects similar growth in the second half of 2011.

CEO Andy Green said Logica had taken market share from rivals and saw gains in outsourcing deals across France, Northern and Central Europe "and in the commercial sectors in the UK".

Outsourcing revenues were up 11 per cent to £880m as Consulting and Professional services turnover returned to growth – albeit at just 1 per cent – to £1.12bn. Group sales to the private sector were up 10 per cent, but fell 5 per cent in the public sector.

UK revenues – 18 per cent of group turnover – fell 2 per cent to £208m on the back of a 10 per cent slide in public sector sales to £208m. The energy and utilities and other sectors grew double digits to £70m and £83m respectively.

Sales in the Benelux were also hit, down 3 per cent to £242m, and fell 11 per cent in Logica's international operations to £179m. All other operations – France, northern and central Europe and Sweden – pushed up the top line.

However, a 16 per cent slide in operating margins to 4.2 per cent, an 11 per cent dip in operating profits to £83m, and a 13 per cent decline in profit before tax to £75m took the shine off revenue gains, with the Benelux and UK worst hit.

"Our public sector clients continued to implement spending cuts, with a particularly sharp decline in the Netherlands leading to disappointing profitability in the Benelux. We grew revenue and margin in half of our six regions," said Green.

Logica said margin improvement was "now dependent" on progress in the Benelux region redirecting resources. ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.