IT services vendor LogicaCMG has reduced its forecast for full-year revenue growth as problems persist in its UK business.
London, UK-based LogicaCMG now expects revenue growth in 2007 of approximately 3% at constant currency, having previously forecast growth of about 4%. Sales in the first nine months of the year increased by 3.6% on a pro forma basis to 2.24bn ($4.65bn).
LogicaCMG’s domestic business has been struggling for several quarters, largely due to the conclusion of a major contract with Transport for London at the end of 2006. In the third quarter of the current year, sales were down 7.5% at 160.4m pounds ($333.8m). The company said it expects its UK operation to record modest sales growth in 2008.
Alongside ongoing problems in the UK, LogicaCMG’s international business also suffered a fall in revenue in the third quarter. Sales were down 3.4% to 74.0m pounds ($154.0m) on the back of a disappointing performance from Portuguese division Edinfor and lower revenue from Asian operations.
On a more positive note, French sales grew 17.1% in the third quarter to 136.7m pounds ($284.5m). LogicaCMG’s operation in the region continues to increase rapidly, adding over 300 staff since the end of June. The company’s performance in the Netherlands was also strong, with revenue up 9.5% to 114.3m pounds ($237.9m), while Nordic sales grew 6.6% to 178.8m pounds ($372.1m).
LogicaCMG also announced that, as of the first quarter of 2008, the company would revert back to its original name, Logica. The company has operated as LogicaCMG since 2002 when software consultancy Logica merged with local rival CMG.
The name change coincides with the appointment of former BT Global Services head Andy Green as CEO, and will become effective on January 1. Green replaces Martin Read, who resigned in May just days after the company released a profit warning.