Unlucky 13 for Logica

The Accountancy Age/ADVFN index fell 2.05 points, closing the week at 75.29 points as the benchmark FTSE-100 dropped to 96.21 after Ericsson warned it would not deliver profits this year and was cutting 20,000 jobs.

The index’s biggest loser was Logica which plunged 13%, ending at 342p.

The beleaguered software company’s house broker Merrill Lynch dropped its earnings forecasts and downgraded the company to a long-term ‘buy’.

The broker said that, despite a possible increase in Logica’s mobile messaging contract in the coming quarters, news from the technology sector highlights the continued pushback of a recovery.

Xansa continued its downward journey losing 10%. The company, which does BT’s accounts, has seen its shares lose 27% since March, when the company issued its second profit warning. And technology woes from Scandinavia hit other shares hard as well as Hays dropped 9% and Sage fell 6%.

Despite a positive start, Capita closed the week down 5%. At its last week, chairman Rod Aldridge said Capita was delighted with its current trading.

But on the positive side, Reed was up 10% after reporting a 39.9% rise in operating profit in its annual results.

However, the company remains cautious on future prospects.

Related reading