Logica cost cuts steady the ship

Green:outsourcing opportunities remain strong

Shares in IT services firm Logica rose 1.5 per cent this morning reflecting strong orders, good outsourcing work and cost savings as a result of a restructure.

This was balanced by continued market weakness in consultancy and professional services.

The firm's outsourcing division saw revenue growth of 11 per cent but there was a 12 per cent decline in consulting and professional services.

The share rise follows third-quarter results with revenue at £862m, a two per cent rise on £845m year on year.

The firm saw a continued strong performance in the UK market offsetting a weak result in Benelux.

Logica chief executive Andy Green said: "Logica continued to deliver well in the third quarter with our investments in client-facing activity showing through in good orders in a tough climate."

The firm said it expected full year revenue decline to be around three per cent on the previous year.

The firm continued to lay off staff in the quarter and has moved more employees to flexible working to try to cut costs.

This will bring total headcount reductions to about 2,200 since the beginning of 2008.

Logica expects to have saved £125m by 2010 as a result of this restructuring.