Logica is one of the leading IT and business services suppliers in Europe.
 

LogicaCMG reports interim results

01 September 2004

  • IT services – highest book to bill ratio since the merger
  • Good results in key IT services territories:
    • UK (42% of Group revenues) performed strongly, particularly in Government and outsourcing
    • Benelux (23% of Group revenues) returned to sequential revenue growth at constant currency with improved operating margin
  • Germany (6% of Group revenues) - restructuring programme to return business to profitability in 2005
  • France (6% of Group revenues) now trading profitably
  • Wireless Networks (14% of Group revenues):
    • Strong book to bill ratio in first half
    • Revenues declined in H1 generating a loss, primarily because a higher proportion of orders than expected had extended delivery schedules (in line with our AGM guidance)
    • Anticipated revenue growth and cost-base reduction to underpin full year profit target
  • First half dividend maintained at 2.3p

Dr Martin Read, LogicaCMG’s Group Chief Executive, said:

“Across our IT services business, both the order intake and the prospect pipeline continue to strengthen. We are pleased to report that the strong performance of the UK has been maintained and the Benelux has returned to growth with an accompanying margin improvement.

“In IT services we achieved the highest book to bill ratio since the merger, providing us with a good platform for the second half. We anticipate that margins in the second half will be ahead of those achieved in the first half despite the impact of poor performance in Germany and ahead of 8% for the year as a whole. The actions we are taking in Germany will benefit the second half and underpin improved performance for the Group in 2005.

“The Wireless Networks business also has a strong order book which together with normal seasonality will support increased revenues in the second half. Action has been taken to reduce the cost base, thereby underpinning our target of achieving a profit for the year.

“Overall we are confident that our business is well positioned for the future. Both our key territories are growing once again and we are taking the necessary actions to address the under-performing parts of the business.”

Financial Headlines:
For the six months ended 30 June 2004, LogicaCMG plc financial results were as follows:

  • Book to bill ratio highest since merger at 1.16:1 (2003: 1.12:1)
  • Revenue was £809.2 million (5.1% lower than H1 2003)
  • Adjusted operating profit was £46.1 million (up 3.8% on H1 2003)
  • Statutory operating profit was £34.2 million (H1 2003: loss of £(52.7) million)
  • Group adjusted operating margin was 5.7% (up from 5.2% H1 2003)
    • IT services adjusted operating margin at 7.6% (up from 6.3% H1 2003)
    • Wireless Networks adjusted operating loss of £(6.5) million, in line with previous guidance (H1 2003: £(0.8)m)
  • Adjusted profit before tax was £39.2 million (0.8% higher than H1 2003)
  • Statutory profit before tax was £27.3 million (H1 2003: loss of £(58.2) million)
  • Adjusted underlying operating cash flow before project financing was £33.2 million, a cash conversion of 72.0%
  • Basic earnings per share was 1.9p compared to (7.1)p in the first half of 2003
  • Adjusted basic earnings per share of 3.5p compared with 3.6p in H1 2003
  • Net debt, at 30 June 2004, stood at £194.2 million (£177.4 million at 31 December 2003)
  • Interim dividend of 2.3p (H1 2003: 2.3p)

Adjusted results are, where applicable, before goodwill amortisation, restructuring charges and other exceptional items. In line with the full year numbers in the 2003 Annual Report & Accounts, the first half 2003 comparative figures have been restated following adoption of Application Note G, of FRS5 (Reporting the Substance of Transactions).

For further information please contact:
Will Cameron, media relations, LogicaCMG
020 7446 1786, (mobile: 07771 815414)

Tony Richards, investor relations, LogicaCMG
020 7446 4372, (mobile: 07733 260393)

Toby Mountford, Citigate Dewe Rogerson
020 7638 9571, (mobile: 07710 356611)

Seb Hoyle, Citigate Dewe Rogerson
020 7638 9571, (mobile: 07799 476804)

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