Logica 6% revenue growth boosts share price

IT services company Logica has reported revenue growth of 6% for the first half of the year.

IT services company Logica has reported revenue growth of 6% for the first half of the year.

Shares in the company were boosted today after it announced revenue rose to £1.8 billion pounds for the six months to June 2008. This represents an increase of 6% on the same period last year excluding unusual gains such as currency swings.

It raised its full-year revenue growth forecast from 3% to 4%.

Operating profit, however, fell by more than a third to £29 million from £44 million because of exceptional items. These include the costs of a restructuring plan announced in April, which will see 1,300 redundancies - around 500 of them in the UK.

The adjusted operating profit, removing the exceptional costs, rose 16% to £118 million.

Net profit was £6m, down from £150m in the same period last year which was boosted by the sale of the Telecoms Products business.

Logica's chief executive, Andy Green, said that the group was seeing a slowdown in financial services and in some consumer-driven sectors, but government spending on IT was holding up.

"Energy and utilities also seem to have tons of money," he said.

The company had made a good start to the restructuring, he said. "A strong first-half performance and strong order intake makes us confident that we can deliver revenue growth closer to 4 percent than 3 percent."

Logica is paying an interim dividend of 2.4 pence a share, up 4%.

The company announced today that it has received a contract extension from Volvo to test its IT applications and systems. The car company had centralised its testing activities in a test centre in Gothenburg, Sweden. Logica has been responsible for the delivery of performance testing services from this centre for the past year. The contract has been extended to also cover functional testing.

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