Logica profit falls by nearly 50%

Green: We achieved the target set out to shareholders

IT services group Logica has reported five per cent revenue growth for 2008, but pre-tax profit fell 48 per cent.

Annual sales were £3.6bn, with pre-tax profit of £44m. The UK arm of the business saw revenue up seven per cent to £710m.

The firm spent much of 2008 going through a major review of its business led by new chief executive Andy Green. So far, cost savings are ahead of schedule, at £25m, with £75m of cuts expected in 2009, leading to annual savings of £110m by 2010.

“Logica had a successful 2008, achieving the financial targets we set out to shareholders while strengthening our management capability, implementing our strategy, and transforming the business around our key European customers,” said Green.

Logica UK chief executive Joe Hemming said the credit crunch had a big effect in the UK last year, but it may also lead to new deals.

“Customers are now open to discuss outsourcing parts of their business that they had previously thought too sensitive,” he said.

“We’re particularly proud of the growth we achieved in the second half, with £356m in revenue. We are confident about how we are positioned for 2009.”