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March 3, 1999

IT SERVICES: LOGICA HAS SOFTWARE TO BOOST REVENUES

By CBR Staff Writer

Logica Plc, the London-based IT consultancy, says it is benefiting from having the right products to exploit rapidly expanding markets. Software sales probably only account for 15%- 20% of revenues but by having the right packages, Logica says it has been able to add on the consultancy and services revenues that turn contracts into far more lucrative packages.

The star performer in the first six months, which saw net profits rise 59.5% to 17.7m pounds on revenue that climbed 35% to 292.3m pounds, has been telecommunications. This showed a 59% growth rate to 75.6m pounds but as Logica’s packages cover pre-paid services and short-messaging systems, it was well-placed to handle the boom areas of a buoyant mobile sector.

The big hope now is North America where revenues grew 38% in the first six months to 40.4m pounds, though they only account for 14% of the group total. Deregulation in the electrical sector offers opportunities for Logica, which is using the kernel of the system developed for the UK market to find a new range of customers. Logica is now an international organization with 60% of revenues and 58% of staff numbers outside the UK.

To keep up the growth rates, Logica has spent 87m pounds on acquisitions in the first half alone and this rate of spending is unlikely to slow.

This article is part of ComputerWire’s European Computer Services information service. Some articles from the service are being provided to ComputerGram subscribers for a trial period only.

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