Headlines1
Third quarter revenue up slightly on last year at £863 million
Continuing to outperform the market in outsourcing, with revenue growth of 7% in the third quarter and revenue up 8% year to date
Consulting and Professional Services decline slowed from 7% in the first half to 4% in the third quarter
Group book to bill on a year to date basis broadly in line with last year at 106% (2009: 107%), with Outsourcing orders up 13% year to date
Full year guidance maintained with revenue and margin expected to be at a similar level to 2009
Year end net debt/EBITDA expected to be comfortably below 1.0x
For the third quarter ended 30 September 2010, results were as follows:
YTD 2010 actual YTD growth % pro forma* Q3 2010 actual Q3 2009 pro forma* Q3 2009 reported Q3 growth % pro forma* Q3 growth % reported
Orders (£m) 2,879 (1) 758 827 829 (8) (9)
Revenue (£m) 2,716 0 863 858 862 1 0
*Q3 2009 revenue adjusted for the impact of acquisitions and disposals at Q3 2010 exchange rates
For the third quarter ended 30 September 2010, results were as follows:
YTD 2010 actual YTD growth % pro forma* Q3 2010 actual Q3 2009 pro forma* Q3 2009 reported Q3 growth % pro forma* Q3 growth % reported
Orders (£m) 2,879 (1) 758 827 829 (8) (9)
Revenue (£m) 2,716 0 863 858 862 1 0
*Q3 2009 revenue adjusted for the impact of acquisitions and disposals at Q3 2010 exchange rates
Logica returns to growth in the third quarter
03 November 2010
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Headlines1
Third quarter revenue up slightly on last year at £863 million
Continuing to outperform the market in outsourcing, with revenue growth of 7% in the third quarter and revenue up 8% year to date
Consulting and Professional Services decline slowed from 7% in the first half to 4% in the third quarter
Group book to bill on a year to date basis broadly in line with last year at 106% (2009: 107%), with Outsourcing orders up 13% year to date
Full year guidance maintained with revenue and margin expected to be at a similar level to 2009
Year end net debt/EBITDA expected to be comfortably below 1.0x
For the third quarter ended 30 September 2010, results were as follows:
YTD 2010 actual YTD growth % pro forma* Q3 2010 actual Q3 2009 pro forma* Q3 2009 reported Q3 growth % pro forma* Q3 growth % reported
Orders (£m) 2,879 (1) 758 827 829 (8) (9)
Revenue (£m) 2,716 0 863 858 862 1 0
*Q3 2009 revenue adjusted for the impact of acquisitions and disposals at Q3 2010 exchange rates
Commenting on today’s announcement, Andy Green, CEO said:
"Logica returned to growth in the third quarter, reflecting strengthened financial services demand across all our markets. While European recovery remains uneven, we continue to expect modest second half revenue growth and adjusted operating margin for 2010 as a whole at a similar level to last year. Our good order backlog in Outsourcing, combined with improving trends in Consulting and Professional Services, positions us well for 2011."
1 All headline numbers relate to pro forma numbers as defined in Note 2 on page 5 of the attached PDF document.
Outlook
The balance of our business continues to underpin our expectation of full year revenue and adjusted operating margin at a similar level to 2009 on a pro forma constant currency basis. Our 2009 pro forma revenue was £3,659 million (2009 reported: £3,702 million), based on current exchange rates.
Employees
We employed 39,036 people at the end of September, compared to 39,074 at the end of June 2010. Attrition for the group was up significantly on the same time last year at 13% (2009: 7%) and utilisation is also high in most markets. With attrition continuing to rise through the quarter in all our major markets, we are now recruiting across the Group, while continuing to focus particular attention on strengthening our capacity in our offshore and nearshore centres. We ended the quarter with around 5,750 people in these locations.
Group orders and book to bill
New orders totalled £758 million (2009: £829 million), with fewer large deals closing in the summer months this year and with the short term effect of slower decision making in the UK public sector. On a year to date basis, our book to bill was 106% (2009: 107%).
Outsourcing orders are up 8% for the quarter and up 13% on a year to date basis. In addition to the previously disclosed 4-year contract win with Ofcom in the UK, other wins included a 4-year contract with the French Ministry of Finance for modernisation of its applications environment and contracts in Finland with Luottokunta and Stora Enso. Outsourcing book to bill is 108% on a year to date basis (2009: 103%) and based on our high visibility, we expect good growth in Outsourcing Services through the remainder of the year. Our strong order intake and weighted pipeline through 2010 gives us confidence of continued strong Outsourcing growth into 2011.
Consulting and Professional Services book to bill remains healthy at 105% on a year to date basis (2009: 109%), with recovery in the financial services sector remaining the strongest driver of demand.
Revenue by service line
Outsourcing revenue was up 8% year to date to £1,159 million and continued to show good growth in the third quarter with revenue up 7% to £373 million (2009: £350 million).
The rate of decline in our Consulting and Professional Services continued to slow. Revenue was down 4% in the third quarter, compared to a decline of 7% in the first half. Revenue on a year to date basis now stands at £1,557 million.
Financial position
We have made good progress on cash collection and expect to deliver strong second half cash conversion. Despite the stronger euro since the first half, we still expect net debt/EBITDA to be comfortably below 1.0x at the end of 2010.
Financial calendar
The next scheduled statements are:
23 February 2011 FY 2010 preliminary results
4 May 2011 AGM and Q1 2011 interim management statement
5 August 2011 H1 2011 interim results
