London, W1-based software systems and consultancy house Logica Plc has reported a fall in pre-tax profits of 54% to UKP2.1m on turnover that rose 3% to UKP96m. Managing director David Mann is satisfied that the company’s response to the recession has created a stable foundation for the company. Turnover is up in Britain by 6%, despite a reduced staff base. Redundancies in some areas have been balanced by recruitment in others, he says, and this has led to a better balance of resources to sales opportunities. Logica currently has 3,500 employees. Strong demand in the government, defence and energy sectors was offset by weak demand in others, notably the telecommunications area which saw a drop in contribution to turnover to 7%. Mann explains that the greater part of the decline was caused by withdrawal from the development and supply of Playout for television studio automation. This reduced operating profit by some UKP1.6m. The US arm of the company reported a profit of UKP0.4m, against losses over the past two years, on revenues down 18% after extensive restructuring. Demand in the finance and computer sectors, two of the principal markets addressed by the US subsidiary, continued to be weak. Mann says that the company has benefitted from increased concentration on specialised capabilities in these two sectors, as well as in telecommunications. In continental Europe, 8% growth was achieved, due in the main to an acquisition by Logica General Systems, the related company in Italy. Germany and Holland experienced conditions similar to those in the UK with customers delaying buying decisions. In Australia, the redundancy programmes undertaken proved effective in balancing resources to sales opportunities, according to Mann, and the operations in Asia Pacific made a small contribution to group profits. The worldwide split of business showed the UK accounting for 52%, the rest of Europe 26%, North America just 9%, down from 12% a year ago, and Asia Pacific 13%. By sector, finance accounted for 27%; government 16%; computing and electronics, 10%; defence, 12% – up three points; energy 12%; manufacturing 8%; telecommunications 7%. Mann describes the first half of last year as ‘turbulent’, the second half as ‘relatively stable’. Logica is well-positioned to maintain the same kind of tempo, he says.
