Logica's margin challenge - 2012

This time last year we questioned the viability of Logica CEO Andy Green’s aspiration to move medium term ‘adjusted’ operating margins towards double digits. In announcing results for 2011, that aspiration was conspicuous by its absence. Green now only forecasts that 2012 adjusted margin will exceed 6.5%, in line with that expected by Atos, though below that of Capgemini’s outlook of >7.4%. We think even 6.5% will present a challenge, and this note explains why.

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