(RTTNews) - UK-based IT and business services provider Logica Plc (LOG.L) reported Wednesday a 2% growth in revenue for the third quarter, with strong outsourcing revenues. The company noted that its overall third-quarter revenue performance was in line with expectations. Looking ahead, Logica said that it has good visibility of fourth quarter revenue, and that it expects around 3% drop in fiscal 2009 revenue.

Revenue for the third quarter grew 2% to GBP 862 million from last year's GBP 845 million. On a pro forma basis, adjusted for the acquisitions and disposals, revenue dropped 4% from last year.

Outsourcing revenue in the quarter increased 11% to GBP 329 million, with growth reflecting market trends for cost reduction. Meanwhile, revenues from Consulting and Professional Services dropped 12% based on lower volumes and pricing agreed in the first half.

Third-quarter orders climbed 16% to GBP 829 million from GBP 717 million last year, and the growth was 6% on pro forma basis, driven by Outsourcing.

On a geographical basis, revenues from Nordics rose 3% year-over-year to GBP 226 million, driven by a 6% decline in the Swedish market, and UK revenues grew 7% to GBP 193 million. Revenues from France were up 8% at GBP 181 million and International revenues grew 3% to GBP 137 million. Meanwhile, Benelux revenues fell 13% from last year to GBP 125 million, reflecting continued weakness in financial services and IDT.

Logica noted that the performance of its business in the third quarter has reflected similar trends to those in the second quarter. Commenting on the results, Andy Green, chief executive officer, said, "Logica continued to deliver well in the third quarter with our investments in client facing activity showing through in good orders in a tough climate. Our pipeline of Outsourcing opportunities remains strong, balanced by continued market weakness in Consulting and Professional Services."

Revenue for the nine months dropped 3% on a pro forma basis to GBP 2.73 billion, and outsourcing revenue grew 11%. Orders for the period were up 4%, on pro forma basis at GBP 2.92 billion.

Looking ahead, Logica said in a statement, "Nevertheless, as we progress through the fourth quarter, levels of utilization and bench remain stable and we have good visibility of fourth quarter revenue. Based on our current pipeline, we expect full year revenue decline to be around 3%. Our full year adjusted operating margin is expected to be in line with last year, at around 7.5%."

In the Outsourcing segment, the company said it projects that the new orders booked in the early days of the fourth quarter, along with other opportunities in the pipeline, would contribute to a strong performance on a full year basis. It is also expected to contribute to a substantial outsourcing order backlog as it enter 2010.

Regarding its cost saving program, Logica noted that the program for this year remains on track, with additional headcount reductions and property exits in the third quarter. "We continue to take action to reduce costs, with particular emphasis on the areas where we have seen weakness," the company said.

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