Logica Revenue -2% Excl Currency; Cost Cuts Help Operating Profit Rise

Anglo-Dutch computer services company Logica PLC (LOG.LN) Friday reported first-half revenue fell 2% when adjusted for the effect of sterling's weakness, but cost cutting of GBP30 million helped adjusted operating profit to rise 7.6%.

The revenue decline on a pro forma basis was in line with company forecasts, and the second half is expected to reflect a similar level of decline, the company said.

Logica provides consulting, outsourcing and IT services to companies in Europe, competing with International Business Machines Corp. (IBM), Hewlett Packard Co.'s (HPQ) recent acquisition EDS, and France's CapGemini (CAP.FR) and Atos Origin (ATO.FR) for a share of the business market that has been shrinking as companies scale back projects in the downturn.

Logica reported first-half revenue climbed to GBP1.88 billion from GBP1.77 billion in the same period a year ago, up 6% on the weaker pound, but down 2% excluding currency effects.

Operating profit adjusted for exceptional items and amortization, rose 7.6% to GBP127 million, ahead of consensus estimates of GBP120 million.

Net profit rose to GBP21.2 million from GBP6.1 million on the improved operating profit and lower taxes and finance costs.

The company reiterated its outlook for the second half, saying that it expected the remainder of the year to be similar to the first half, and adding that margins are expected to be at the same level as last year.

Chief Executive Andy Green said, "While there is still uncertainty in the consulting and professional services market, we have taken swift action in more difficult geographies to protect margins."

Shares closed Thursday at 109 pence. They have risen 60% in value since the start of 2009.

Company Web site: www.logica.co.uk

-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293; [e-mail]