By Ron Coates, 2 September 2004 11:25
NEWS LogicaCMG, the UK's largest quoted computer services company, crawled into the black in the first half of this year.
It announced that it had made an operating profit of £34.2m as opposed to its $52.7m loss in the first half of last year.
Revenue, however, fell by five per cent to £809.2m. The company put this down to longer lead times for its wireless division and extended delivery schedules for other divisions.
The company was upbeat and pointed at the growth in its IT services and outsourcing business. It claimed to have its best book-to-bill ratio since the merger of the two companies two years ago.
In the UK, the company saw public sector business grow by 11 per cent. This sector now makes up 50 per cent of LogicaCMG's UK business.
But problems remain. LogicaCMG has already announced that it plans to cut 300 staff in its German operations and that it is restructuring to bring the rest of the operation into profit by sometime next year.
The wireless division, which once made the company a stock exchange darling, continues to struggle. It has been hit because handset makers have moved into its territory and obliged it to make a partial move into device manufacturing. These deals take much longer to show up on the balance sheet than software royalties.
The company is continuing to recruit on a small scale for its IT services and will move into its campus-style outsourcing centre in Bangalore next month. It has high hopes of its RFID pilot for Airbus and its biometrics work for the EC at four European airports.
Shares crept up by around five pence to 167p on the announcement of the results but LogicaCMG has a long way to go to get back into the City's favour. In February, its shares were 337p.
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