LogicaCMG reports operating profit up 30% in 2006

Following the acquisition of WM-data (completed in October 2006) and the divestment of Telecoms products (announced in February 2007), LogicaCMG is a substantial European company with an extensive international network focused on IT and business services.

Financial highlights

For the year ended 31 December 2006, LogicaCMG plc financial results were as follows, with comparatives on a reported basis for 2005 (restated where applicable):

• Revenue up 45.3% at £2,665.2 million (2005: £1,834.1 million)
• Book to bill of 1.11:1 (2005: 1.27:1, including the €510 million EDP order)
• Operating profit up 29.7% at £155.8 million (2005: £120.1 million)
• Adjusted operating profit (excluding exceptional items and amortisation of acquisition related intangibles) up 78.6% at £217.3 million (2005: £121.7 million)
• Profit before tax of £129.4 million (2005: £104.8 million)
• Basic earnings per share, including exceptional items and amortisation of acquisition related intangibles, of 6.7p (2005: 7.3p)
• Adjusted basic earnings per share up 42.7% at 10.7p (2005: 7.5p)
• Cash generated from operations of £216.8 million (2005: £167.0 million).  Net cash inflow from trading operations of £250.4 million (2005: £180.8 million), a cash conversion of 115% (2005: 149%)
• Net debt at 31 December 2006 of £557.1 million (31 December 2005: £96.1 million)
• Final dividend of 3.4p, making a total for the year of 5.6p (2005: 5.31p)
  

Operational highlights

• IT services revenue (90.8% of Group total) grew 5.0% on a pro forma5 basis (53.3% on a reported basis)
  • Revenue growth of 10.0% for a second consecutive year in the Netherlands
  • Underlying growth in UK (excluding passthrough revenue) of 1.9%
  • The Nordics finished the year with strong growth in the fourth quarter
• Full year adjusted operating margin of 8.4% in IT services (2005: 6.8%)
  • IT services margins were increased or maintained in all major geographies
• Positive order momentum in the former Unilog businesses, expected cost savings achieved and Germany now in profit
  • Over €100 million of cross-selling orders recorded in the former Unilog businesses in 2006
  • Expected integration cost savings of £10 million in 2006 achieved
  • Germany returned to profit in the second half of 2006
    

Commenting on the results, Dr Martin Read, LogicaCMG’s Chief executive, said:

“We are pleased to have achieved another year of strong growth in adjusted earnings per share and operating cashflow.  IT services margins in all our major geographies have been increased or maintained and we have returned to profit in Germany in the second half.

“2006 was also an important year in the strategic development of our business.  We have made good progress in integrating our acquisitions.  In addition to the expected cost savings, we achieved €100 million of cross-selling orders in the former Unilog businesses.  WM-data finished the year with a strong fourth quarter and we see good early cross-selling opportunities. 

“Following the recently announced sale of our Telecoms products business, we will be returning around £130 million of cash to our shareholders.  We enter 2007 as a substantial European company with an extensive international network focused on IT and business services.  We will concentrate on delivering the benefits of integration and additional cross-selling, as well as leveraging our greater scale.  We expect 2007 to be a year of sustained growth, in line with our expectations.”

For further information, please contact:

LogicaCMG Media relations : Carolyn Esser/Louise Fisk +44 (0) 20 7446 1786 (mobile: +44 (0) 7841 602391)

LogicaCMG Investor relations: Karen Keyes/Frances Gibbons  +44 (0) 20 7446 4341 (mobile: +44 (0) 7801 723682)

Brunswick: Tom Buchanan/Chris Blundell +44 (0) 20 7404 5959

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