LogicaCMG cuts, boosts heads

Sub-contractors down, staffers up

Posted in IT Channel, 23rd January 2007 15:20 GMT

LogicaCMG issued a bullish full year trading statement this morning that managed to combine satisfaction over the cutting of the use of contractors with concerns about capacity constraints.

Capping off the year to December 31, 2006, the services group said the market remained positive with "a generally improving price environment". Second half operating cash flow was strong, with full year cash conversion in line with expectations.

It cited the dampening effect of "capacity constraints" on revenue growth in a number of key territories in the third quarter. It said headcount improved steadily in the fourth quarter, and now believes it is better positioned for improved growth in the coming year. LogicaCMG warned about skills shortages last year as well.

At the same time, it said it boosted its IT services margin as it extended the use of its global service delivery operation and reduced the use of sub-contractors. ®

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