London: IT consultancy Logica has reported marginal improvements in revenue for the three months to the end of September and the year to date, but cut its full year prediction after a difficult third quarter.
Third quarter revenue was up just 2% to £914 million. After nine moths revenue was up 4% to £2,910 million.
- Group orders up 10% for the nine months to September driven by continued strong growth in Outsourcing
- Outsourcing revenue growth still strong, up 10% on a year to date basis and up 8% in the quarter
- Consulting and Professional Services broadly stable for the nine months to September despite third quarter revenue down 3% and mixed trends across our markets
- Revenue up in all geographies except the Benelux on a year to date basis, with particularly strong third quarter growth in the UK
- Revenue growth expected to be above 3% for the year, with adjusted operating margin now to be in the range of 6.5% to 7.0%
Andy Green, CEO said:
"Logica has continued to respond to client needs and to win new orders, with Outsourcing orders up 22% so far this year and a solid book to bill in Consulting and Professional Services. This will continue to drive growth in revenue in the fourth quarter.
The pockets of softness that became apparent in September mean we now expect 2011 margin to be in the range of 6.5% and 7.0%, with the clear actions we are taking in the Benelux and Sweden expected to drive benefits over the medium term."
The firm said that, given a strong outsourcing backlog and the good balance of service lines, it expects to grow in the fourth quarter, with revenue growth expected to be above 3% for the year.
The UK had been down 2% at the half-year, but was the fastest growing operation in the latest quarter, and Logica expects it to post revenue growth for the full year.
Achieving better levels of utilisation in the Benelux before the year-end will remain a challenge and progress in Sweden has been slower than expected, it added.
Full financial details are here