Anglo-Dutch computer services company LogicaCMG was in confident mood yesterday - telling shareholders trading for the first half was well ahead of last year while integration of French IT firm Unilog stayed on track.
The firm said organic growth, stripping out acquisition benefit, was expected to be ahead of last year's 5.3 per cent, with revenue growth driven by improvements in financial services and industry, and distribution and transport (IDT).
Logica said group operating margin adjusted for acquisitions for the first half was stronger than 2005, but UK revenue was slightly below as it had to fund computer hardware to win contracts.
"We are pleased with our performance in the first half," chief executive Martin Read said in a statement. "The Unilog integration and cost savings remain on track and we have seen encouraging initial revenue synergies. Our expectations for the year remain unchanged."
He added: "We continue to expect 2006 organic revenue growth to be ahead of last year's 5.3 per cent."
Logica CMG paid 930 million euros (£636.9 million) in September for Unilog, France's fourth-biggest IT services firm, to gain share in the French market and strengthen its hand in Germany. It expects to derive £19 million in cost savings.
In the UK, increases from the financial services and IDT divisions offset lower revenues from energy and utilities customers, while UK public sector revenue remained stable despite stronger competition.
In the Netherlands, demand in financial services and IDT and a strengthening public sector pushed revenue growth.
Logica said French revenue growth was in line with expectations, benefiting from a market performing well.
In the fragmented German market, the Logica said it was confident of exiting the year making money.
Logica added: "In France, we have had two major wins which build directly on Unilog customer relationships and LogicaCMG expertise and which we expect to announce shortly. We are also seeing strong demand for shorter term consulting and project assignments in the UK and Netherlands."
Analysts said the news gave little reason to alter opinions.
"It was in line with expectations with a better performance in continental Europe than the UK," said Credit Suisse analyst James Clark.
Logica is set post first-half results on August 30.