Company financials: Banking revenues decline at Logica

Company financials: Banking revenues decline at Logica

A poor performance in financial services was offset by strong growth in telecomms and utilities at IT services group Logica, which has reported record revenues and earnings for the seventh successive year

For the year-end June 2000, profits before tax grew 54% to £97.4m on revenues of £847.4m, up 28%. The group reported an order intake increase of 40%.

Revenue in the telecoms sector increased by 69% and now accounts for 40% of the group total. This included a strong performance from mobile networks where revenue growth was 100%.

In financial services, a 21% decline in wordlwide revenues was attributed to a slow market recovery from the millennium transition. Logica has moved to reduce headcount in this sector to protect profitability.

"As customer spending moves from large back office systems to customer facing projects, we are seeing greater emphasis on customer relationship management, mobile and e-banking and secure payment systems," states the report.

In Continental Europe, revenue declined overall by 1% and operating profit fell by 7%, reflecting the impact of the financial services sector slowdown in France and the Netherlands, where Logica is particularly exposed to the banking environment, and the time and investment required to move the business higher up the value chain.

Similarly in the US, revenues in the region at £56.6m were 17% lower for the year and operating profit was 20% lower at £3.3m leading to a reduction in margins to 5.8%. Logica says it has moved to strengthen its position in the front office and e-banking segments.

In Asia pacific/Middle East, operating margins fell to 2.9% following further investment in sales and marketing resource, and continued enhancement of the Quaestor retail branch banking product suite. Logica says it is working with Centurion Bank in India, already a user of the Quaestor system, to launch a payment gateway to facilitate secure e-commerce transactions from both B2B and B2C Internet web sites.

"This project is based at our Bangalore office, which Logica is increasingly using as an efficient, highly skilled software development centre," the company states.

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