Dr Martin Read, CEO of London, UK-based LogicaCMG, which began trading as a new firm on December 30, 2002, said: Against a challenging economic background, our first six months as a merged company have exceeded our original expectations. The integration is well advanced with savings ahead of plan, giving us a more competitive cost base.
LogicaCMG said the restructuring is now largely completed, and this has resulted in some 2,000 jobs cuts, leaving it with a headcount of 21,056 at the end of June. The company now expects to save an additional 5m pounds ($7.9m) of savings, totaling 85m pounds ($134.3m) annually.
Despite the positive noises, LogicaCMG continues to struggle under a continuing sluggish market for IT services. For the six-month period ended June 30, the company reported a net loss of 69m pounds ($109m), down from a net loss of 315.7m pounds ($498.8m) in 2002, on revenue that fell 9.6% to 854.3m pounds ($1.35bn). At the end of the period, the company’s net debt had increased 74% since last December to 186.3m pounds ($294.4m), and its cash position had declined 19% to 102.6m pounds ($162.1m).
Significantly, LogicaCMG claimed its wireless networks division, which develops multimedia messaging systems for mobile operators, had gained ground in a fiercely competitive market dominated by Ericsson and Nokia. During the six-month period the company signed eight new MMS contracts, however revenue still declined some 16% to 134.5m pounds ($212.5m) from the wireless networks division. This was also backed up by an increase in outsourcing activities, which now account for 19% of revenue up from 16% previously.
Source: Computerwire
