By Ron Coates, 22 July 2004 11:30
NEWS LogicaCMG has announced that it is steaming ahead in the UK and Benelux, but that its poor performance in Germany has cut revenues by three per cent.
In its six-month trading statement, the group said that its IT services had the highest book to bill ratio since the company was formed by the merger of the two services companies. The company has been hiring hundreds of staff in the UK and Benelux to service its contracts.
The main driver has been its outsourcing operations and the company confirmed that brewing giant Interbrew had renewed its €44m five-year outsourcing deal.
But the company will be slashing its headcount in Germany, where traditional consultancy work is in a steep decline. The group is reviewing it German operations and warned that restructuring would cost £17m.
LogicaCMG has long been waiting for MMS to take off and has made two major contract wins with European-based Tier 1 operators this year. But it is bailing out of two loss-making subsidiaries; the Eppix billing platform and Migway, the messaging gateway joint venture with Teledenmark.
While its mobiles operation makes up only 15 per cent of LogicCMG operations, it has traditionally attracted the most attention. The company has been hit as mobile phone makers move into its core software for mobiles market.
This has forced it to move into mobile add-ons with a high hardware content. These take longer to roll out and bring in the revenue than the quick fix and continuing royalties of the software business. LogicCMG says that its revenue from mobiles will be down 10 per cent this year.
The company shares continued their long slide from a high of 337p in February of this year and are now bouncing along around 168p.
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