Logica reassures its investors

IT services company Logica has reassured investors on with a robust full-year sales forecast off the back of demand for its outsourcing division, particularly in France and other parts of Europe.

Analysts had expected the firm to post full-year revenue growth of between 3 and 4 per cent but the firm said today that it expected growth to be at a similar level to the first six months, which was up 5 per cent.

Customers have been reluctant to embark on major IT upgrades during the downturn, putting pressure on Logica's consulting and systems integration unit, but boosting demand for its outsourcing services as firms cut costs.

The Anglo-Dutch company said its outsourcing division had grown strongly, up 11 per cent, while the consulting and professional division had returned to growth, up 1 per cent.

However the group said the challening market had resulted in an underlying loss in the Benelux and it said its group margin improvement, a key metric for analysts, would be dependent on progress there.

Adjusted operating profit for the period was down 11 per cent to £113m due to restructuring charges.

"Logica grew above the market in the first half, with particularly strong gains in Outsourcing, in France, Northern and Central Europe, and in the commercial sectors in the UK," Chief Executive Andy Green said.

"Our order backlog is at record levels."