Signs of a continuing improvement in the IT market have come from LogicaCMG. Overall service revenues have increased and its bellwether Wireless division has returned to profitability. French and Benelux trading figures disappointed though.

Germany has begun to stabilise following 6 months of cost-cutting and will probably return to profitability this year.

The pace of transforming France from low margin commodity work to a systems integration model has been slow. The Benelux countries, the second biggest, has seen higher bidding costs.

LogicaCMG has seen a 43% fall in its share price since February 2004. Overseas problems continue to cause problems.

The Wireless division, which is the leading supplier of text messaging services was more positive. A small profit was made following an increase in licence sales ahead of Christmas.

A cost-cutting exercise in the division also saved £4m.