Sustained weaknesses in Logica's European operations saw the IT group's operating profit slump 74 per cent to £55m.
Weakness at its professional services and consulting arm in Benelux and Sweden was largely to blame, dragging adjusted operating profits at the division down 24 per cent to £122m,despite revenues holding steady at £2.2bn. Both regions have now turned loss-making, although Mr Green expects Benelux to return to profits this year. But UK operations have also deteriorated, with operating profits slumping 74 per cent to £16m. The outsourcing division fared better, with a 9 per cent sales increase nudging operating profits 6 per cent higher to £125m.
Despite new orders increasing 13 per cent to £4.6bn, chief executive Andy Green says the outlook remains uncertain, and expects 2012 sales in the range of minus 2 per cent to plus 2 per cent. However, after taking a £132m hit on restructuring and contract charges, Mr Green expects £25m-£35m of savings to be realised by the second half of 2012, which he believes will lift underlying operating margins to 6.5 per cent this year, after a fall from 7.3 per cent to 6.2 per cent in 2011.
Broker Singer expects adjusted pre-tax profits of £224m and EPS of 10.2p in 2012, virtually unchanged on 2011.
LOGICA (LOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 87p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 86-87p | 12-MONTH HIGH: | 146p | LOW: 57p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 51 | |
| NET ASSET VALUE: | 120p* | NET DEBT: | 15% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 3.07 | 84 | 5.4 | 5.8 |
| 2008 | 3.59 | 44 | 2.7 | 3.0 |
| 2009 | 3.70 | 43 | 2.5 | 3.3 |
| 2010 | 3.70 | 193 | 9.6 | 4.2 |
| 2011 | 3.92 | 32.7 | 1.7 | 4.4 |
| % change | +6 | -83 | -82 | +5 |
Ex-div: 11 Apr Payment: 16 May *Includes intangible assets of £2.1bn, or 128p a share | ||||
