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Logica profit jumps
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February 21, 2001: 7:18 a.m. ET
Software sales to telecom clients drive 75 percent increase in earnings
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LONDON (CNN) - A sharp rise in software sales to telecom clients fueled a 75 percent jump in Logica's first-half profit, the UK tech bellwether said on Wednesday.
Net income rose to £39 million ($56 million), or 9.1 pence a share, in the six months ended December 31, from £22.3 million, or 5.4 pence a share, in the year earlier period. The results were above analysts' expectations.
 Logica, which makes text messaging software for the telecom industry, said revenue rose 25 percent to £505 million.
About 43 percent of revenue came from the telecom sector, while sales to Europe's deregulated utility industry contributed 20 percent. Revenue from the utility sector climbed 56 percent in the first half.
Chief Executive Martin Read told CNN said the company saw a "46 percent growth in messaging systems revenue" from the telecom sector. Read denied the company was relying too heavily on one sector and pointed out the inroads it was making into the utility industry.
While the company was looking at possible acquisitions, Logica would also rely on "good old organic growth," read added.
"Overall, market conditions remain positive and the board is confident of delivering continued strong performance for the full year," Read said.
Logica will continue to benefit from the growth in the text messaging systems business, although that rate of growth isn't going to continue at such a high level, Pui Kei Yuen, analyst at UBS Warburg, told CNN.com.
The GSM Association estimates messages sent on short message systems will increase to 25 billion per month by the end of 2001, compared with 15 billion per month at the end of December last year, Yuen said.
Shares in Logica fell 5.7 percent 1,506 pence in London.
Yuen said the stock's decline was less company-specific and more a reflection of the overall market sentiment towards tech shares.
"It's mainly sort of market-related, with the Nasdaq off 4 percent yesterday. The entire sector in technology has been marked down," she said. 
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