Last year’s rigorous restructuring at London W1-based software, systems and consultancy business Logica Plc continues to bear with pre-tax profits up 27.8% on turnover up 9% to UKP217.4m. Turnover figures are complicated a little by the presence of joint ventures Speedwing-Logica Ltd and Logica FinSiel SpA. Consolidated turnover, with these associated undertakings removed show turnover up 7.4% to UKP196.59m. But while the overall picture was good, geographically, performance remains patchy. North America and the Asia Pacific region turned in operating losses of UKP2.6m and UKP300,000 respectively, where both territories were profitable last year. By contrast continental Europe made it into profit with a UKP2.6m profit, compared with a UKP1.7m loss, and turnover grew 28% to UKP51.1m. The figures would have been better it weren’t for problems in Germany, which turned in another loss, provoking the company to pull out of everything except for the profitable space sector, at a cost of about UKP500,000. The German operation was neither big enough nor able to differentiate itself to succeed, says Logica finance director Andrew Given.
Dutch success
By comparison, the Dutch operation is being hailed as a success, particularly in export sales to Eastern Europe. The US performance though was a major disappointment, with operating losses of UKP2.6m on revenues down 8%. The US business was re-organised into five specialist areas mid-year. Retail Banking, wholesale banking, computer vendors, voice integration and multimedia are in. Out goes telecommunications, a sector that failed to deliver a couple of big expected contracts and is now only really ticking over. Voice integration is still a small area, he adds, but one with potential. As for multimedia, he will not say much, other than Logica US is working with one large client in this area, using a very large integrated systems approach. Last week Bill Engel step in after 15 months with Logica to become president and chief executive of the US operation – the previous incumbent resigned. The other loss-maker was the Asia Pacific region, profitable except for a large hit from the completion of an extremely demanding project for the Hong Kong Stock Exchange. And so 66% of turnover and around 78% of the profit still comes from the UK. The company notes that margins improved to 7.1% from 5.8% and says that the improved results were broadly-based, with a notable recovery in the finance sector, and encouraging growth in the industry and transport sectors. Government and defence business fell a little. Exports grew 10% to around UKP18m. If the UK remains the most important geographical market, finance remains the pre-eminent market at 29% of the total, followed by government, energy and utilities and defence with 16%, 11% and 10%. Systems integration accounts for 64% of this activity, with consultancy picking up 23% and products the rest. There has been little change in these percentages since last year. Cash balances rose to UKP17m compared with 13.7m last year and the directors are recommending a final dividend of 2.75 pence, giving a total net dividend of the year of 4 pence – a 10% increase.
