18th May 2005 06:00
18 May 2005LogicaCMG Annual General Meeting: Update on Current TradingAhead of its Annual General Meeting for shareholders this afternoon in London,LogicaCMG has issued the following trading update:Results for 2005 will be presented under International Financial ReportingStandards (IFRS). The comparable numbers for 2004, both full year and interim,were released on 17 May, the impact of which was broadly similar to theguidance given in March with our preliminary results.Order bookings in the first quarter were very strong, up 37% over last year,and we are currently in negotiation for several large contracts. The excellentprogress on orders reflects the benefits of the size and scale of the mergedcompany and our strategy of focusing on value propositions. Together withcompletion of the Edinfor transaction at the end of April, this gives goodvisibility of first half revenue and an increased order backlog.Organic revenue growth, excluding Edinfor, is likely to be in the range of 4-5%for the year as a whole, with the UK and Netherlands businesses performingwell. On a comparable basis, performance for the year is expected to show asignificant improvement over 2004. This will be weighted to the second halfwhen the benefits of restructuring in France and Germany should deliverimproved performance and the contracts won in the first quarter and withEnergias de Portugal (EDP) come fully on stream.The UK business has achieved very good order intake in the first quarter. Thebusiness continues to deliver strong margins, but shorter term time andmaterials assignments have been subject to some rate pressure. We have alsogrown strongly in the Netherlands where we have continued to win significantopportunities. While we are still using a relatively high number of contractorsto meet short-term demand, we expect this to reduce through the year as we makegreater use of our offshore resources and recruit key skills.We continue to make progress in improving the operating performance in Germanyand, while that market remains difficult, we expect a significant improvementcompared to 2004 as the year progresses. Our French business is performing inline with the second half of last year as we continue to progress ourrestructuring. As indicated in March, the first half of the current financialyear will also carry the estimated associated costs of ‚£2 million at theoperating profit level. We should begin to see the benefit of these actions inthe second half.We have continued to recruit at our lower cost centres around the world and ourblended delivery model is proving increasingly attractive to customers wishingto reduce cost and mitigate risk.Wireless Networks trading to date has been consistent with our projection of amore stable revenue stream backed by reduced operating costs and tight controlof discretionary spending. Good first half order intake increases ourconfidence that revenue for the year will be slightly ahead of last year andthat in consequence profitability will be significantly improved.At the Group level, therefore, we expect first half profit to be in line withour expectations with the slightly lower contribution from IT services,compensated by a better performance in Wireless networks.In accordance with normal practice, the company will give a further tradingupdate in July before entering the closed period ahead of its interim resultswhich will be announced on 31 August 2005.For further information please contact:Carolyn Esser - media relations 020 7446 1786 (mobile: 07841 602391)Tony Richards/Frances Gibbons - investor relations 020 7446 4341 (mobile: 07733260393)Toby Mountford - Citigate Dewe Rogerson 020 7638 9571 (mobile: 07710 356611)Seb Hoyle - Citigate Dewe Rogerson 020 7638 9571 (mobile: 07799 476804)ENDLOGICACMG PLCRelated Shares:
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