Logica trading in line with forecasts

Logica CMG has said that its trading is in line with lowered forecasts issued in March. The company was reporting ahead of its AGM.

For the first half, the company expects a small sequential decline in IT services revenue and anticipates some pressure on margins.

However, as more cost reductions come on-line during the second half, it expect margins to improve, with a further increase during 2004 as the full impact of the cost-savings comes through.

The UK had a good first quarter, with public sector and outsourcing demand offsetting a difficult financial services market. As expected, demand has remained weak in the Benelux and difficult market conditions continue in France and Germany.

The wireless networks business is now strongly focused on marketing its combined proposition to customers and is continuing to build market share in newer technology areas such as multimedia.

It has signed a framework agreement with KPN Mobile and delivered a Multimedia Messaging Service Centre (MMSC) to its German operation, E-Plus, as well as securing new MMS contracts with operators in India, Malta and The Philippines.

The cost base is being tackled and Logica CMG remains confident of achieving at least break even for the full year.

The company’s planned headcount reduction of 2,200 people is well advanced. Some 1,800 people have now either left the company or have been individually notified and are in process according to local legislative requirements.

The company’s share price rose on this report.