LogicaCMG Reveals Turnaround Plan But Market Remains Skeptical

25 Apr 2008 | Print | Digg! Digg IT! | del.icio.us del.icio.us | Permanent Link

Forbes reports that LogicaCMG PLC. unveiled a 110 million pound restructuring plan designed to revitalise the ailing IT services company, but the 80 million pound cost savings forecast through job cuts and the expansion of offshore operations didn’t go far enough for some analysts who are concerned about execution risk and a tightening IT services market.
Logica’s new chief executive Andy Green, who joined the group in January from telecoms giant BT Group PLC., raised a four point plan designed to accelerate growth, increase offshoring, integrate the group and reduce overhead costs.
Logica said in its update today that it will remain well below its 2.65x net debt/EBITDA banking covenants despite these restructuring costs.
The plan failed to convince the market and shares were down 3.49 percent or 4,0 pence at 110.750 pence at 2:05 p.m.

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