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Logica says its restructuring programme is on track

Andy Green

London: Logica reiterated its full year guidance to investors in an interim management statement at its annual general meeting on Friday.

Unaudited first quarter results for the three months to March 31 show revenue down marginally at £971 million from £947 million in the same period in 2011. Orders were down 24% at £1.057 billion — though that is against a record first quarter order book in 2011.

Commenting on the figures, CEO Andy Green said, "This is a solid performance underpinning our full year guidance. We have made good progress with clients in delivering against current contracts as well as winning and implementing new business. Our restructuring actions are fully on track and will help drive improvement in profitability in the second half."

Outlook

Logica's statement adds, "Our full year revenue and margin guidance remains unchanged despite our expectation of a subdued second quarter given the impact of elections in several countries and a cautious economic outlook for our main markets. Full year revenue growth is expected to be in the range of -2% to +2% and we expect our full year 2012 operating margin to be above 6.5% even in tough market conditions.

"We have made good progress with our restructuring programmes in the Benelux, Sweden and Infrastructure Management (IM). We continue to expect to see the savings of £25 to £35 million coming through, largely in the second half of the year.

"We expect to deliver against our key 2012 objectives. Our Benelux business will return to profit in 2012; our Swedish business will deliver an improved margin and our IM business will be strongly competitive going forward."

Logica said that an increase in employee numbers over the last twelve months to 41,267 (Q1 2011:39,864) was due to the addition of 1,200 through the Grupo Gesfor acquisition in May 2011.

Growth in headcount in offshore centres over the last year was 24%, with approximately 7,300 in these centres at the end of March (Q1 2011: 5,900). The firm has now reached 1,000 employees in the Philippines, a 40% increase since the first quarter of 2011.

Logica's full interim statement is available here.

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