Logica, the UK information technology services company, today said its mobile networks business was feeling the effects of a slowdown in the text messaging boom. However it was still expected to maintain its track record of strong profits growth.
The company, which reported a nearly 50 per cent surge in first-half pre-tax profits in February due to the mobile messaging boom, said that while its mobile networks business was still growing, it was not seeing the "stellar" growth rates of the recent past.
Mobile text messaging has recently seen an annual growth rate of about 80 per cent, but as the telecoms industry moves to faster data transmission services such as general packet radio service (GPRS) and third generation technology there are indications that the popularity of simpler messaging systems may wane.
Logica, which is understood to derive 20 per cent of its revenue from supplying text messaging software systems to telecoms operators, has for some time faced concerns that it is overly dependent on this sector.
Today, however, Mr Andrew Given, finance director, said that he expected the company's other businesses to accelerate in the first half of the next financial year, compensating for any slowdown in the telecoms unit.
Logica makes software for a number of other sectors, including financial services, utilities, and transport.
Logica said it expected to be in line with market expectations with strong revenue growth and continued margin improvement for the year ending June 30th. UBS Warburg, house broker, has previously forecast that full-year pre-tax profits would be £153.5m sterling.
Shares in the company, which reached a peak of almost £30 last year, fell 10p to 950p in early trade on today.
Financial Times Service