LogicaCMG: RFID on the Threshold of European Breakthrough
LONDON, April 15 /PRNewswire/ -- The key findings of an international study undertaken by LogicaCMG (LSE: LOG.L - news - msgs) ADVERTISEMENT


reveal that Radio-Frequency Identification (RFID) is high on the agenda for European retailers, food manufacturers and logistic service providers. A majority of the companies interviewed in the Netherlands, UK, Ireland, Germany, France and Belgium, gave RFID top priority in terms of planned IT investment.

RFID is seen as the successor to barcoding. By using RFID it is possible to electronically identify and track objects, such as supermarket goods, without time delays or the need for human intervention. As a result, supply chain logistics are more streamlined and efficient and this ultimately leads to lower costs and higher revenues.

The study shows that half of the 50 companies interviewed in Europe have or are planning to deploy RFID pilot projects throughout 2004, with the vast majority planning to start implementing the technology within the next three years. A number of major retailers, such as Tesco (LSE: TSCO.L - news - msgs) (UK) and Metro (Germany) will initiate large-scale rollout of RFID. Whilst these projects will be finalised by 2007, the research indicates that companies will not begin to tag consumer products until 2008 when prices of tags will have naturally lowered. The focus for the moment is on Returnable Transport Items (RTIs), such as crates and pallets. The tagging of these RTIs will be standard as of 2005. The research highlights when and how RFID will be used on a large scale for RTIs within European retail supply chains. Due to the large variety of RTIs in retail supply chains, the management, recording and administration is both complex and labour intensive. RFID is set to eliminate these concerns.

Since RFID will have great impact on the processes and IT systems of companies, it is necessary that they thoroughly prepare themselves. The use of RFID with RTIs will only take place if the financial benefits are greater than the cost of implementation. The cost/benefit analysis part of the research showed that based on a tag price of 50 eurocents the handling cost per pallet could decrease by 8.5%. This leads to a payback period of between two and three years.

A majority of companies that have trailed RFID prefer the EPC (Electronic Product Code) network as standard for information exchange and UHF (Ultra High Frequency) as frequency. In the short term there are a number of issues that should be solved before RFID can be broadly adopted. First, the EPC network has not been finalised yet. Second, limitations in European legislation mean that the use of UHF technology is currently restricted. Finally, the software to integrate RFID in the existing IT infrastructure is not mature yet. LogicaCMG anticipates that by the end of 2004, the main issues will be resolved. As volume deployments will increase in the next few years, the cost of RFID tags will be naturally lower.

Paul Stam de Jonge, Director Sales and Marketing of LogicaCMG: 'The research shows that we are on the threshold of a breakthrough of RFID technology in the European market. The quick introduction of the EPC network is key for the broad acceptance and implementation of RFID. For this reason we, together with many organisations within the sector, have put a lot of effort in the definition of the EPC network."

Since the whole supply chain is involved, the RFID implementations of the large retailers in 2005 will have a great impact on the food manufacturers, logistic service providers and retailers. According to Paul Stam de Jonge 'the RFID implementations will lead to an irreversible process in the retail market. In the short term, it is therefore of the up most importance for companies to gain knowledge and experience with RFID'.

About RFID technology

RFID technology is based on a relatively simple concept. It consists of two elements that communicate through radio transmission - a tag and a reader. The tag contains a small chip and an antenna and can be placed on any object. The information on the tag, such as an identification number, can be transmitted to an RFID reader over a distance of a few meters. The readers are placed in various locations throughout the supply chain. RFID allows objects to be electronically identified and followed throughout the complete distribution chain.

There are two main reasons for the application of RFID technology in RTIs. On the one hand it allows RTI pool organisers and logistic service providers to electronically follow the RTIs. On the other hand it allows manufacturers and retailers to follow and identify products. Both reasons result in a higher cost-effectiveness.

The dominant position of the retailers in the supply chain means that they have a leading role in the uptake of RFID. The study shows that retailers are particularly interested in tracking at an individual product level. Tagging at pallet level is not as crucial as they are often only used to transport the goods to the distribution centre, as opposed to throughout the entire supply chain.

NOTES TO EDITORS
About the research
- The research is an initiative of LogicaCMG in close co-operation with
EAN Netherlands and ECR D-A-CH and is sponsored by Checkpoint Systems (NYSE: CKP - news) ,
Euro Pool System, Intermec, Omron, Zetes, SAS and Container
Centralen A/S
- The geographies researched were the Netherlands, UK, Ireland, Belgium,
France and Germany
- The study consisted of 50 in-depth interviews with potential users of
RFID technology (retailers, manufacturers, logistics service providers
and RTI pool organisers) as well as extensive desk research
- As it is expected that Returnable Transport Items (RTIs) will be fitted
with RFID relatively quickly, the study focused on the application of
RFIDs in pallets, crates and containers within the supply chain

About LogicaCMG

LogicaCMG is a major international force in IT services and wireless telecoms. It provides management and IT consultancy, systems integration and outsourcing services to clients across diverse markets including public sector, telecoms, financial services, energy and utilities, industry, distribution and transport. Formed in December 2002, through the merger of Logica and CMG, the company employs around 20,000 staff in offices across 34 countries and has nearly 40 years of experience in IT services. Headquartered in Europe, LogicaCMG is listed on both the London and Amsterdam stock exchanges (LSE: LOG; Euronext: LOG). More information is available from www.logicacmg.com.

About EAN Netherlands

EAN Netherlands plays an active and leading role in the promotion and implementation of the global, open EAN-UCC standards for automatic identification and electronic communication in the Netherlands. EAN Netherlands is a non profit organisation, with 5.800 member companies from 30 industry sectors, and is a member organisation of EAN International www.ean.nl.

About ECR D-A-CH

Efficient Consumer Response (ECR) is a joint initiative by manufacturers, retailers and other partners in the supply chain. ECR aims to improve processes and provide consumers with optimum quality, service and variety of products at the best price www.ecr.de.

LONDON, May 3

LogicaCMG today announced that it has reached an agreement with T-Mobile
International to build and operate the next-generation portal for t-zones.
t-zones is a mobile internet service that connects mobile subscribers to more
than 1000 external applications and a rich array of content across several
countries.

http://www.uk-wire.com/cgi-bin/articles/20050503080000ni036.html

Azhar, looks like ur on ur own here. must admit it is looking very good for 200 as Deutch have upgraded this to 190+ recently.

First Q order bookings up 37% over last year

18 May 2005

LogicaCMG Annual General Meeting: Update on Current Trading

Ahead of its Annual General Meeting for shareholders this afternoon in London,
LogicaCMG has issued the following trading update:

Results for 2005 will be presented under International Financial Reporting
Standards (IFRS). The comparable numbers for 2004, both full year and interim,
were released on 17 May, the impact of which was broadly similar to the
guidance given in March with our preliminary results.

Order bookings in the first quarter were very strong, up 37% over last year,
and we are currently in negotiation for several large contracts. The excellent
progress on orders reflects the benefits of the size and scale of the merged
company and our strategy of focusing on value propositions. Together with
completion of the Edinfor transaction at the end of April, this gives good
visibility of first half revenue and an increased order backlog.

Organic revenue growth, excluding Edinfor, is likely to be in the range of 4-5%
for the year as a whole, with the UK and Netherlands businesses performing
well. On a comparable basis, performance for the year is expected to show a
significant improvement over 2004. This will be weighted to the second half
when the benefits of restructuring in France and Germany should deliver
improved performance and the contracts won in the first quarter and with
Energias de Portugal (EDP) come fully on stream.

The UK business has achieved very good order intake in the first quarter. The
business continues to deliver strong margins, but shorter term time and
materials assignments have been subject to some rate pressure. We have also
grown strongly in the Netherlands where we have continued to win significant
opportunities. While we are still using a relatively high number of contractors
to meet short-term demand, we expect this to reduce through the year as we make
greater use of our offshore resources and recruit key skills.

We continue to make progress in improving the operating performance in Germany
and, while that market remains difficult, we expect a significant improvement
compared to 2004 as the year progresses. Our French business is performing in
line with the second half of last year as we continue to progress our
restructuring. As indicated in March, the first half of the current financial
year will also carry the estimated associated costs of ?2 million at the
operating profit level. We should begin to see the benefit of these actions in
the second half.

We have continued to recruit at our lower cost centres around the world and our
blended delivery model is proving increasingly attractive to customers wishing
to reduce cost and mitigate risk.

Wireless Networks trading to date has been consistent with our projection of a
more stable revenue stream backed by reduced operating costs and tight control
of discretionary spending. Good first half order intake increases our
confidence that revenue for the year will be slightly ahead of last year and
that in consequence profitability will be significantly improved.

At the Group level, therefore, we expect first half profit to be in line with
our expectations with the slightly lower contribution from IT services,
compensated by a better performance in Wireless networks.

In accordance with normal practice, the company will give a further trading
update in July before entering the closed period ahead of its interim results
which will be announced on 31 August 2005

Strong forward orders at LogicaCMG
MoneyAM
LogicaCMG said it expects results for the first half to be in line with its expectations.

It sees a slightly lower contribution from IT services but a better performance in Wireless networks.

The Anglo-Dutch software and IT services said order bookings were strong in the first quarter, up 37% on the same period last year.

It said visibility for first-half revenue is good.

The company also added that it was currently negotiating several large contracts without giving any further details.

It said that organic revenue growth, excluding Edinfor, is likely to be in the range of 4%-5% for the year, with the UK and Netherlands businesses performing well.

On a comparable basis, performance for the year, it said, is expected to show a significant improvement over 2004, which will be seen in the second half of the year after the completion of restructuring in its France and Germany operations, and should deliver improved performance.

The company also said it expected to reduce its relatively high number of contractors in the Netherlands

LogicaCMG wins 5-yr outsourcing contract from Aviva's Dutch unit Ohra
AFX


AMSTERDAM (AFX) - LogicaCMG PLC said it won a five-year outsourcing contract with an option for extension from Ohra, a unit of Aviva PLC's Dutch insurer Delta Lloyd.

No financial details were disclosed.

LogicaCMG will provide IT outsourcing services for all backoffice insurance systems. Nineteen Ohra employees will transfer to LogicaCMG.

amsterdam@afxnews.com

SINGAPORE, June 13 /PRNewswire/ -- LogicaCMG today announced that it has
been chosen as a solutions and
systems integration partner for Bridge Mobile, an alliance encompassing eight
leading Asia Pacific mobile operators, to go live with its inaugural regional
mobile services offering.



Bridge Mobile alliance, serving a combined subscriber base of
64 million, aims to facilitate a regional mobile infrastructure and a common
service platform. This platform will enable the creation and seamless
delivery of regional mobile services across all geographies and enhance the
quality of service to roaming subscribers of the member operators. The eight
operators in the alliance are SingTel Mobile (Singapore), SingTel Optus
(Australia), Airtel (India), Maxis (Malaysia), Telkomsel (Indonesia), Globe
Telecom (Philippines), Taiwan Mobile (Taiwan) and CSL (Hong Kong).

http://www.uk-wire.com/cgi-bin/articles/20050613121500NV545.html

LONDON, June 15 /PRNewswire/ -- Comptel Corporation, a leading convergent
mediation, charging and
provisioning software vendor, and LogicaCMG, a leading global solutions and
IT services provider, today announced a formal outsourcing co-operation. The
arrangement will ensure high quality and cost-efficient operations for
Comptel, as well as flexible use of resources in order to respond to growing
market demand, mainly in the Middle East, Europe and growing markets in Asia
Pacific. As a result, Comptel expects to achieve enhanced operational
efficiency and cost savings from mid 2005 onwards.



Comptel will use LogicaCMG's global services delivery capability for
customer services and implementation. This agreement, which commenced in the
first quarter 2005, will re-inforce the existing long-term relationship
between the companies.

http://www.uk-wire.com/cgi-bin/articles/20050615080000n8375.html

LONDON, June 20
LogicaCMG today announced that MTS (Mobile TeleSystems), Russia's largest
mobile operator, has awarded LogicaCMG a EUR5.9 million order - confirming
LogicaCMG as its preferred supplier of Next Generation Messaging solutions.
The new order is part of the framework agreement signed with MTS in September
last year. This new order builds on the first phase contract valued at EUR4.6
million, which saw LogicaCMG upgrading MTS' existing LogicaCMG Short Message
Service Centre (SMSC), and the deployment of LogicaCMG Wireless Service
Brokers (WSBs) and Multimedia Messaging Service Centres (MMSCs) in February
this year.

http://www.uk-wire.com/cgi-bin/articles/20050620080000nc848.html

AMSTERDAM (AFX) - LogicaCMG PLC said it has won a six-year IT outsourcing order from Metronet Rail worth 18 mln stg.

LogicaCMG said the contract is to support and transform Metronet's IT network and desktop applications for its 5,000 employees.

As part of the deal, LogicaCMG will provide Metronet Rail with an enhanced IT service to support the out-of-hours work by engineers and other IT users.

Metronet Rail is a consortium of five companies, and is responsible for upgrading, replacing and maintaining two-thirds of London Underground's infrastructure, under a 30-year-old Public Private Partnership (PPP) contract which came into operation in April 2003.

amsterdam@afxnews.com

mrk/jfr

AMSTERDAM (AFX) - LogicaCMG PLC said it won a seven-year contract worth 22
mln stg to provide Thames Water PLC with billing services in Wales.
LogicaCMG will deliver IT services for Thames Water from its outsourcing
centre in Waterton near Bridgend, Wales. Other customers already being serviced
from the new Waterton offices include Welsh Water, Britannia Airways, Ofcom and
the British Council.
LogicaCMG will provide applications management, development and support,
mainframe and server hosting, data and voice network management services and
call centre infrastructure support to Thames Water in Wales.
The deal is expected to result in cost savings for Thames Water, starting
with a reduction and upgrade in the number of servers.

Recovery at LogicaCMG

LogicaCMG said it expects to see a significant improvement in its full year performance.

Operating profits came in line with market expectations in the first half.

In a trading update for the six months ended June 30th 2005, the group said its IT Services showed a continuing gradual recovery in the first half with very strong order taking. Wireless Networks produced a solid performance underpinned by resilience of the SMS market, it added

Group order intake was very strong in the first half, up 50% over last year.

It added that, as in previous years, cash flow was seasonally weaker in the first half from the effect of annual insurance premium payments with some additional impact due to the acceleration in revenue growth.

The UK performed well with the Industry, Distribution & Transport sector in particular showing a marked recovery from the last year and the Public Sector

continuing its strong trend. The group said some pricing pressure was felt in short term, time and materials assignments, notably in the Telecoms sector.

The Netherlands continued to achieve good revenue growth with Financial Services performing very strongly. The board said that while the group is still using a relatively high number of contractors to meet short-term demand, it expects this to reduce through the year as it makes greater use of offshore resources.

In Germany, the board said the market remains difficult, but it said it expects a significant improvement in the operating performance compared to 2004 as the year progresses. 'We are making good progress in Outsourcing and Financial Services but the Industry, Distribution and Transport market remains very difficult, slowing the return to profitability of the business.'

In France, the group carried through some reductions in the overhead structure in the first half as planned and focused attention on targeting pre-sales effort more effectively. The board expects to see the benefit of these actions progressively through the second half.

LogicaCMG also said it has continued to recruit aggressively in Bangalore where it expects to exceed 2,000 staff by year end and it is now commencing the next phase of campus development. The group has also outsourced a significant proportion of its own back office systems and processes to its offshore facility.

In Wireless Networks, revenues from the traditional text messaging (SMS) market are holding up better than originally expected as developing countries install capacity to meet demand and existing customers add IP-based functionality.

The group said revenues on a like for like basis were similar to the same period last year and, with the benefit of its reduced cost base, the group's business was marginally profitable. Good first half order intake increases confidence that revenue for the year will be slightly ahead of last year and that in consequence profitability will be significantly improved, it added.

Organic revenue growth for the group, excluding Edinfor, is likely to be at the top end of the previously indicated range of 4%-5% for the year as a whole, driven by higher start-up revenue on several outsourcing contracts in the first half, LogicaCMG said

The Times says "buy" LogicaCMG -

SHARES in LogicaCMG, the computer services group, have traded at an average price of about 175p over the past year. Stock has changed hands at the same average price over the past three years. Yesterday, as the firm posted a first-half trading update, the share price moved up from 187p to 187p. But while the shares sit at a value only barely above these averages, the company appears to be in a stronger position than at any time since the enthusiasm for all things IT imploded five years ago.

LogicaCMG is strengthening thanks to a combination of reasons. IT spending in general improved as economic activity picked up and the investment overhang created by the spending ahead of the millennium date change dissipated. LogicaCMG has helped itself by tapping into the popularity of outsourcing. All sorts of customers are understandably keen to reduce running costs, and outsourcing is a favoured route. It is only relatively recently that the company has begun to earn the full benefits of the merger of Logica and CMG. The deal was signed nearly three years ago. Integration issues occupied lots of time in the early days, but the winning of big contracts with the likes of Energias de Portugal, which the company doubts would have been possible pre-merger, is evidence that the benefits were worth waiting for.

LogicaCMGs strengthening prospects are not immediately evident in the sales numbers reported yesterday. Sales, the company said, grew at 11 per cent in the first half. But it also said that full-year sales would be up in the range of 4-5 per cent. The relatively rapid rebound in sales in the middle part of 2004 represents important context, however. The fact that LogicaCMG told investors that the total value of its order book rose by 50 per cent in the first half of this year adds to the good news. This also sends encouraging signals about the quality of earnings moving forward. It has increasing amounts of work slated in for several forthcoming years. Profits from mobile phone text-messaging software, meanwhile, are proving more resilient than was previously anticipated. Buy.

Interim Results

31 August 2005


LogicaCMG Reports Interim Results
- Strong Growth in Earnings Per Share

Note: This is the first set of results to be issued under IFRS and
comparatives have been restated accordingly


First half performance in line with expectations, featuring strong order
intake and good organic growth

Basic earnings per share up 63% to 3.1p from 1.9p

Adjusted earnings per share on a like-for-like basis grew 33% to 2.8p from
2.1p

Order book up 50%, driven by outsourcing, with closing book-to-bill ratio of
1.59:1

IT Services revenues (87% of total) grew by 11.5% (8.6% organically)

Wireless Networks revenues (13% of total) increased 7% and the division
achieved a major turnaround in profitability compared to the first half of last
year

Edinfor transaction completed in the first half - good early progress

Revenue growth for the Group for the full year is expected to be circa 5% on
an organic basis and circa 10% following the consolidation of Edinfor

First half dividend raised to 2.4p from 2.3p


Commenting on the results, Dr Martin Read, Chief Executive, said:

"The long term benefits of the Logica - CMG merger in terms of scale and market
positioning are now very much in evidence. Earnings grew 33% in the first half
and order intake was very strong, up 50% over the first half of last year.
Revenues were up some 11%, driven by our largest territories, the UK and the
Netherlands. Outsourcing remains a key growth area, representing 24% of group
revenues, and was a major factor in first half order bookings.

"Our Wireless Networks business has returned to revenue growth and had another
profitable half. We expect to improve the performance further in the
seasonally stronger second half. While we continue to dominate the traditional
messaging market, we are also focusing on new opportunities as mobile and fixed
operators converge towards new broadband business models.

"Having got off to a good start, performance for the year is expected to show a
significant improvement over 2004 and positions LogicaCMG well as the IT
industry develops."

LONDON, September 1

LogicaCMG today launches a new e-Identity initiative that will provide a
global centre of excellence for the development of solutions for electronic
identification, travel documents, border crossing and public safety
initiatives.

This programme brings together LogicaCMG's expertise in systems
integration, security, identification and tracking technologies, such as
biometrics, smart cards and Radio Frequency Identification (RFID). LogicaCMG
has successfully completed e-Identity projects worldwide, such as the
biometric-enabled fast-pass border crossing at Schiphol airport in Amsterdam.
In addition, the company has extensive experience in the provision of smart
card based solutions for financial applications and access control.

A number of factors are leading to a growth in demand for these
technologies and solutions, particularly biometrics. For example, many
countries are planning to deploy national identity cards and e-passport
projects in the near future and there is also a growing realisation that
corporate identity cards to control physical and systems access are
necessary.

.
.
.

http://www.companyannouncements.net/cgi-bin/articles/20050901080000NJ817.html

Tuesday, December 06, 2005 17:40
Andrew De Cleyn, GSD business development director writes:

On Wednesday 16th November GSD hosted four analysts from CSFB and 15 institutional investors. This was part of the CSFB Tech Tour 2005. Over three days they visited various IT services companies including Cap Gemini. Atos Origin, Infosys and Wipro exploring their capabilities and strategy moving forward. During the visit we explained why we have created GSD, what it means to LCMG and most importantly what it means to our customers. Technopolis, our new facility in Bangalore, was well received as were the discussions with various Indian, Dutch and UK members of the GSD team. Our ability to retain customer proximity and domain knowledge whist delivering a "blended model" through GSD was seen as key. We have received a tremendous response to the visit (see attached flash report and photo) including the following GSD related statements:

"We upgrade our rating for LogicaCMG to Outperform .... The key changes at the company driving our change in stance are its meaningful execution of an offshoring strategy in India with the adoption of a Global 's Service Delivery Model, ....."

"Our visit to LogicaCMG's Bangalore facility on our recent field trip to India was a significant positive surprise"

Log now beginning to perform, seems to be heading up to 200p. Indicates trading statement on 18th Jan may be positive. H

PRAGUE, January 10 /PRNewswire/ -- Trading of allocated greenhouse gas
emission allowances is now fully
under way in the Czech national emissions registry. The Czech Republic has
fulfilled the requirements of the European emissions trading scheme (ETS) and
Czech companies can now buy and sell emissions allowances. Some Czech
companies have already sold a part of their allowances to foreign entities.



The Czech market for emission allowances is supervised by the Ministry of
Environment, while responsibility for ensuring the technical infrastructure
lies with LogicaCMG's client, the Czech Electricity Market Operator (OTE).



LogicaCMG operates the central registry of emission allowances from its
data centre in Prague, on behalf of OTE. The solution was designed in close
co-operation with the Spanish software company Soluziona and is
technologically based on Seringas from the French software vendor CDC. The
system provides the functionality necessary for the market's smooth operation
including: Registration of individual allowances, their allocation to CO2
producers (companies), registration of contracts, and keeping records of
emission volumes released into the atmosphere by particular sources. Market
participants are connected to the system via the Internet.



LogicaCMG's system also provides automatic communication with the
European Commission's systems and for generating reports. The company's
consultants also participate in activities of the European expert group that
focuses on resolving issues regarding standards and cooperation among the
national emission registries.



Miroslav Rehor, IT Director of the OTE, said: "Emission registries
administration is a new and very important activity for us. An additional
challenge is to ensure an ongoing communication with the Czech Ministry of
Environment and the Czech Ministry for Trade and Industry, as well as with
the EU bodies. LogicaCMG delivered, and provides support for, a very good
solution which has successfully been passed through the EU certification
process."



Jim Tapper, managing director for global energy and utilities at
LogicaCMG commented:



"We are proud to be working with the OTE to run the registry that is
essential to support the emissions market in the Czech Republic. Czech
companies can now trade allowances as required. The next step is for these
companies to develop their strategies to comply with the EU ETS and,
potentially, for those with low emissions to realise profit opportunities by
selling spare allowances."



In addition to providing the central market registry, LogicaCMG has been
active in supporting individual companies. It offers consulting services and
the EMISSIONS logic software, jointly developed with partner CarbonSim.
EMISSIONS logic manages companies' compliance with the EU ETS and other
emissions trading schemes by: Tracking their greenhouse gas emissions and
compliance against obligations; managing their emissions allowances and
credits; evaluating strategies and projects for emissions reduction and
generating internal and external reports. To companies not wanting to acquire
such a system, LogicaCMG can provide its services as an application service
provider. In this case a customer can use the information system that is
situated in LogicaCMG's data centre for a monthly fee.

Barclays have upped LOG to BUY from neutral. If this breaks 200 then 250 next target. Unilog accquisition has created a great opportunity.

Share of the Week

Logica symbol : LOG

Business spending on IT has been picking up and LogicaCMG should be one of the beneficiaries. Following its acquisition of French IT services business Unilog last September, the company is certainly better positioned to take advantage of strong demand in its core markets.

LogicaCMG is a provider of IT services and wireless telecoms solutions, created through the merger of Logica and CMG in 2002. One problem that has dogged the company is its lack of critical mass in Europe, where it hasnt had the scale to win some of the really key contracts. Its operations in both France and Germany have suffered as a result, losing a combined 9.5 million in the first half of 2005.

But the acquisition of Unilog should change that. We think the deal was a good strategic move because it transforms LogicaCMG into a truly pan-European IT services company, much better equipped to win key European contracts. Indeed, the acquisition gives the company the scale it needs in France and helps to improve the situation in Germany.

Following the take-over, LogicaCMG says it expects cost savings of 9.5 million in 2006 and 19 million in 2007 targets that we feel are achievable, given the managements good track record of cutting costs from previous acquisitions. And because of its offshore capabilities, pan-European coverage and strong industry knowledge, LogicaCMG should be able to sell more services to Unilog clients.

Over the next two years, we forecast top-line growth in the mid single digits, and we expect earnings to increase by 15% a year because of improving profitability. Following completion of the Unilog acquisition, the group should be able to boast one of the best IT services operations in Europe, with strong offshore capabilities. It could be time for investors to log on to the shares.

LogicaCMG (LSE: LOG.L - news) rallied 6 to 190 after being upgraded to 'buy' from 'hold' at Deutsche Bank (Xetra: 514000 - news) on the back of the group's offshore strategy and high expectations for Unilog (Paris: FR0000034662 - news) in 2006.

Deutsche highlighted the firm had made significant progress in scaling its offshore operations, adding that it believed the market had underestimated the potential the offshore business holds for margin protection and offers LogicaCMG a different growth strategy.