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LogicaCMG predicted this year would be better than 2004 as the continued turnround at the group’s wireless networks business helped lift overall performance in the first half.

The IT services company, formed by the merger or the UK’s Logica and the Netherlands’ CMG, reported a 46.1 per cent rise in interim pre-tax profits to £37.7m ($67m) compared to the same period last year, while revenues grew 10.9 per cent to £891.7m.

”The long term benefits of the Logica-CMG merger in terms of scale and market positioning are now very much in evidence…Having got off to a good start, performance for the year is expected to show a significant improvement over 2004,” said Dr Martin Read, chief executive.

The group forecast full-year revenue growth of 5 per cent organically and 10 per cent following the the consolidation of Edinfor, a Portuguese IT services company.

The upturn was driven by an 11.5 per cent revenue rise in the group’s core IT services business, which accounts for 87 per cent of total revenues. The company said outsourcing - representing 24 per cent of revenues - was a key generator of order bookings, which were up 50 per cent on last year.

The group operating margin was up to 4.6 per cent from 4.1 per cent last year, although the IT services operating margin slipped to 5.1 per cent from 5.7 per cent.

Also contributing to bigger profits was another six months of profitability at LogicaCMG’s wireless division which a year ago was languishing in the red. Revenues at the business were 7 per cent higher than the first six months of last year, while its operating margin rose to 1 per cent from -5.7 per cent.

“Our wireless networks business has returned to revenue growth and had another profitable half. We expect to improve the performance in the seasonally stronger second half,” said Dr Read.

The unit, which focuses on traditional mobile phone messaging technology, is now seeking to keep abreast of changes in the market as mobile and fixed-line phone operators move towards broadband-based business models, he added.

Adjusted earnings per share on a like-for-like basis increased 33 per cent to 2.8p. LogicaCMG lifted its interim dividend to 2.4p from 2.3p.

On Wednesday morning LogicaCMG shares opened 2.7 per cent higher at 182.5p.

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