IT services group LogicaCMG admitted today that it needed to improve "operational performance" in the UK following an 8.3 per cent year-on-year profit slide at its British arm.

It said that first-half revenue from continuing operations was up 36.2 percent to £1.5bn, due in large part to a one-time gain following the sale of its Telecoms Products division in June.

Pretax profit from continuing operations was slightly up on last year to £29.2m while the interim dividend was raised 4.5 per cent to 2.3 pence.

Although the firm saw revenue growth above market expectations in France, Nordics, Netherlands and Germany, the UK continued to lag behind. LogicaCMG attributed the downturn to "weakness in commercial sectors."

Chief operating officer Jim McKenna said: "A key priority for the second half is improving the operational performance in the UK. We will also be working on recruiting the right people in the right places to grow the business and on expanding the use of common systems and processes throughout the larger group."

LogicaCMG was hit by a profit warning in May following a £13.6m "write-off" on a UK transport sector contract. The cost overrun led to Read's resignation and a reshuffle of board directors.

The Anglo-Dutch firm also confirmed that David Tyler, who joined LogicaCMG in July this year, will replace chairman Cor Stutterheim.

It added that the search is still on to hire a new chief executive following Martin Read's decision, in the face of investor criticism, to step down after 14 years at LogicaCMG. Read will leave the firm next month.

LogicaCMG shares are currently trading at 155.75 pence on the London Stock Exchange, down 1.89 per cent on the previous close. ®

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