Feeds

Logica profits hit by misers in public sector

Plan A: still hurting

Beginner's guide to SSL certificates

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. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.