LogicaCMG let down by UK sales drop

LogicaCMG

LogicaCMG has increased first-half sales by 36 per cent to more than £1.5bn despite disappointing losses in the UK.

The Anglo-Dutch IT services company is blaming the fall in UK sales of more than eight per cent on weakness in its commercial sector and the termination of a contract with Transport for London earlier this year (Computing, 1 February).

The figures illustrate a company that is too reliant on public sector business, according to Ovum analyst Ian Brown.

'LogicaCMG has taken its eye off the ball and needs to win more repeat business with its UK commercial customers, as well as winning new contracts,' he said.

Overseas, it is a different story. In the Netherlands the firm achieved eight per cent growth in first-half sales and in Germany it grew by 10 per cent.

LogicaCMG still has not appointed a successor to chief executive Martin Read, who resigned in May following a poor first quarter.

'The company needs to get a new chief executive in place,' said Brown.

'It also needs to focus on three or four vertical markets and a handful of solutions in each, where it has, or could have, a leadership position.'

Deputy chairman David Tyler has been promoted to take on the role of chairman in the short term, after having been with the firm for only one month. And the search for a new chief executive is progressing, says the company.

Improving UK performance is a priority but the outlook for the year is unchanged, said LogicaCMG chief operating officer Jim McKenna.