Phoenix IT Group told the Stock Exchange that trading for the first six months to 30 September 2005 was in line with expectations. The firm's directors remain confident that trading for the year will be in line with expectations.

Negotiations with BT and the Department of Work and Pensions over renewing a contract worth £12m a year are still ongoing and the firm said it would make a further announcement as soon as a conclusion is reached. The contract expires 31 December 2005.

Interim results will be announced 23 November and will be the first posted under International Financial Reporting Standards. ®