Logica slashes sales growth targets

SHARES in Logica tumbled 15% as the IT services group said growth in its division supplying software to mobile phone operators would be less than analysts had expected. Finance director Andrew Given predicted growth in the division of about 30% for the first half and full year, against previous expectations of 40%.

He said strong growth in text messaging had been offset by a 'modest decline' in revenues from pre-paid mobile phone systems as operators pushed customers towards contract phones. The shares slid 125p to 705p.

Given said: 'Both for the first half and for the year as a whole, we expect to deliver good revenue growth - albeit, as we have previously said, not at the rate of previous years - with improving margins.'

UK revenue growth had been weak with strong public-sector gains offset by declining revenues in telecoms. Continental Europe had a very strong first half in terms of revenue but would produce flat profits after restructuring costs in Germany.

US markets 'continued to be very difficult and revenues declined with little prospect of improvement for the full year. Revenues in Asia-Pacific and the Middle East are growing very rapidly and should continue to do so.'

Given said that despite market conditions being generally more difficult, the group would continue to achieve its financial objectives.