Outsourcing grows while consulting shrinks at Logica

Logica has posted financial results for 2010 which show the consulting and outsourcing firm to be "positioned for growth", City-speak for currently flat but with a strategy in place that if well executed, will lead to future upturn.

Indeed, that upturn may already be evident.

At £3,697m, full-year revenue inched up one per cent on an adjusted 2009 total, but revenue in the fourth quarter was up four per cent.

And Logica has started 2011 with contract wins worth £475m, including two high-profile UK contracts – the Serious Organised Crime Agency and Shell's commercial fleet card scheme.

Despite a downturn in UK public sector business, the results were ahead of analysts' predictions of £3,683m.

Profit for the year was steady at £272m, a margin of 7.4 per cent, bouyed by recovering financial services business.

In the past Logica has been better known for its consulting work than outsourcing. But last year the group's consulting and professional services business shrank five per cent while outsourcing grew 10 per cent.

"It's a deliberate move to grow our outsourcing business," Logica's UK chief executive Craig Boundy told Computing. "This is an essential part of our ‘client intimacy' strategy. Strong, long-term client relationships will drive effective business... and underpin our future growth."

Boundy said Logica plays to three strategic areas: sustainability, business security and asset optimisation.

The group recently won plaudits from analyst Verdantix for joining IBM and Deloitte in pulling ahead of the green IT services pack. Logica is the technology partner for the consortium behind Low Carbon London and its software is used as the basis for 80 per cent of the UK's smart meter programmes.

"Sustainability is core to how we operate as a business and in the service offerings we take to market. It is also increasingly important in recruitment of new graduates," said Boundy.

Logica will recruit 250 graduates this year, he said.