First half results at IT services firm LogicaCMG were hit by continuing poor performance in its UK arm – and the company has still not identified a new chief executive.
Overall, Logica posted pre-tax profits of £29.2m for the six months to 30 June, up 9% on the same period last year, while revenues increased 36% to £1.52bn.
But first half revenues in the UK fell 8.3% to £334.2m, a drop the company attributed to “weakness in the commercial sectors”. The poor UK result came despite a 7.3% growth in Logica’s public sector revenues. Adjusted operating profit in the UK was £4.4m, down from £33.3m for the same period last year.
Half of the decline in UK revenues was due to a £13.6m write-off on a project cost over-run – understood to be with Transport for London – signalled in an earlier profit warning.
The IT services firm boasted extensions or new contracts with UK public sector bodies, including the Ministry of Defence and Companies House.
Logica said it was expecting UK revenue growth in the second half of the year, but warned that full-year revenues would still be “slightly lower than 2006”.
The IT services firm was unable to report much progress on its search for a new chief executive following the retirement of Martin Read, which was announced in the wake of the May profits warning.
In a statement, joint deputy chair David Tyler said the board was “pleased with the progress being made in the search for a new chief executive” and remained “focused on securing the best possible candidate to take LogicaCMG forward”.
Logica’s chair, Cor Stutterheim, has now also announced his retirement from 1 November, adding to the instability at the top of the company. He will be succeeded by Tyler.