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. ®

• Logica admits outlook uncertain (27 February 2008)
• LogicaCMG hit by boardroom row (25 July 2007)
• Logica offloads telecoms biz (20 February 2007)
• Exclusive Transport for London shreds LogicaCMG contract (15 December 2006)
• LogicCMG gets euro tax deal (27 September 2006)
• Logica feels the labour pinch (30 August 2006)
• LogicaCMG buys its way into top ten (21 August 2006)
• LogicaCMG hails IT outsourcing wins (19 July 2006)