Logica forced to slash its forecasts
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Thursday 03 November 2011
Logica slashed its growth forecasts for 2011 as demand slowed in the third quarter and its ongoing woes in the Benelux region continue to drag on performance.
The IT services group posted revenues of £914m in the three months to the end of September, missing the City's expectations by 2 per cent.
Andy Green, the chief executive of Logica, complained of "pockets of softness" that emerged in September. The news sent its shares tumbling by over 8 per cent.
Orders had risen 13 per cent in the first half of the year, but were broadly flat in the third quarter. Sales growth is expected to fall from 5 per cent in the first six months to 3 per cent for the full year. Paul Morland, an analyst at Peel Hunt, said the slowdown was "worse than expected". The group had expected margin improvement of 7.4 per cent but lowered the forecast at the end of the first half. It said yesterday it now expected the range to be between 6.5 and 7 per cent.
Much of the company's problems continue to come from the public sector in Belgium, the Netherlands and Luxembourg and from Swedish outsourcing costs, which forced the company to lower margin forecasts by 5 per cent in the first half.
"Both of these issues appear to be taking longer to resolve than hoped," Mr Morland said. "The weakening order book does not bode well for 2012." Revenues in the Benelux region fell 3 per cent in the first three months of the year.
Will Wallis, an analyst at Numis Securities, said that while the shares were close to historic lows there were still downside risks to revenue estimates and "ongoing long-term strategic challenges".
The UK, where revenues fell 2 per cent in the second quarter, became the company's "fastest growing geography" in the third quarter as the public sector revenues continued to stabilise and growth in commercial sector contracts improved.
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 Syrian refugee child beaten by Istanbul Burger King manager for eating customer’s leftover food
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Rob Lowe hits out at White House decision not to meet Israeli leader
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Winston Churchill: From accusations of anti-Semitism to the blunt refusal that led to the deaths of millions
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...