Buyouts make Logica sense profit

Logica has recorded a 52 per cent rise in pre-tax profit to £63.4m for the year ended 30 June, outstripping analyst estimates of £60m.

Turnover grew 39 per cent from £473m to £659.5m as the vendor reported increases across all markets except Asia/Pacific, where difficult economic conditions led to a 24 per cent drop in revenue.

Acquisitions, including that of SAP system integrator Team 121 and network planning firm Aethos, added £7.4m to operating profit.

Turnover in the UK grew 23 per cent to £283m and revenue in Europe was up 54 per cent to £195.2m. Margins improved in all regions, exceeding 10 per cent in the UK for the first time.

Martin Read, chief executive of Logica, said it had also benefited from continued demand in telecoms services, which accounted for 24 per cent of total turnover behind finance with 27 per cent.

He added that a careful acquisition programme, clearly defined strategy and an order book up 37 per cent meant the outlook for Logica was bright, despite the possibility of "instability" as a result of year 2000 issues.

"This has been another good year for Logica. Our strategy has brought excellent results. Logica is now operating from a far stronger international base than ever before and has achieved market leadership in mobile telecoms software.

"Logica's business is strongly positioned, by sector and geography, to take full advantage of the increased global demand for proven, successful and reliable IT systems. We are sure that our focus on providing an all-embracing service for our clients through a strengthened international network will continue to deliver superior performance in the year ahead," Read said.