Logica has announced its results for the six months ended 31 December 2001. Revenues increased 19% to £600.2 million, while pre-tax profits were up 21% to £78.5 million. However the company expects growth in Mobile Networks in the second half, compared to last year, to be at best modest
Managing director and chief executive, Dr Martin Read said, In an increasingly competitive and difficult market, Logica has delivered good growth in profits, revenues and earnings per share.
Total order intake was up 34% for the half, the highlight of which was our largest ever contract, a project with the Crown Prosecution Service of England and Wales, ultimately expected to exceed £200m.
Our Mobile Networks business delivered 36% growth in messaging revenues during the half reflecting our strong position in this market. The prepay billing business was slow, resulting in an overall growth of 28% in the Mobile Networks division. Having delivered strong growth in messaging during the first half, we expect growth in Mobile Networks in the second half, compared to last year, to be at best modest. This is largely due to the earlier and greater than previously anticipated impact of network-wide capital spending constraints in the Japanese market, which will result in a revenue decline in Japan compared to last year. However we see continued strong growth in the large emerging messaging markets, such as the Americas and Eastern Europe.
Logica remains well positioned to continue its success in messaging as the market evolves. We have 150 customers across all geographies and technologies. Emerging markets such as the US (where Cingular experienced a 450% increase in SMS traffic in the last six months) continue to provide good growth opportunities. Logica’s new products, which provide network interoperability, message multiplexing and internet access, are leaders in their field and our new Messaging Platform, which offers forwards and backwards compatibility between different generations of system with high scalability and message throughput, is now operating in three continents. Supported by its strong systems integration experience, Logica is consistently the leading innovator in messaging and currently supports fifteen of the world’s leading operators in trial multi-media messaging solutions based on our Messaging Platform.
In services, the increasing demand, across all sectors, to outsource mission critical processes to proven suppliers has driven a 92% growth in our outsourcing business. We continued to strengthen our geographic footprint across Continental Europe and the Asia Pacific region, building on successes notably in the energy and utilities and industry, distribution and transport sectors. We expect to see solid performance in the second half, benefiting from our strong order backlog and an increasing proportion of longer-term business, giving better visibility of revenue. Continued growth in business process outsourcing will be driven by leveraging our UK and US experience and our strengthening geographic presence across Continental Europe and Asia Pacific.
Overall, the Board is confident that it will deliver earnings per share growth at least in line with current market consensus.