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LogicaCMG PLC (LOG)

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Wednesday 30 August, 2006

LogicaCMG PLC

Interim Results


30 August 2006


LOGICACMG REPORTS GOOD FIRST HALF RESULTS

Demand for IT Services continues to improve

Book to bill ratio 1.15:1

Revenue £1,243.1 million (2005: £891.7 million), growth of 39.4%

Pro forma revenue growth for the group was 5.2%, with particularly strong
performances in the Netherlands and France

Operating profit (including restructuring costs and amortisation of acquisition
related intangibles) was £42.0 million (2005: £40.8 million, growth of 2.9%)

22.0% increase in adjusted operating profit (excluding restructuring costs and
amortisation of acquisition related intangibles) on a pro forma basis, up to £
77.1 million (2005: £40.8 million, up 89.0%)

Adjusted operating margins maintained or improved in all regions

Unilog integration proceeding well, with encouraging initial revenue synergies

First half dividend raised to 2.20p from 2.11p, an increase of 4.3%

Basic earnings per share (including restructuring costs and amortisation of
acquisition related intangibles) were 0.7p (2005: 2.7p restated for the bonus
element of the rights issue)

Adjusted basic earnings per share (excluding restructuring costs and
amortisation of acquisition related intangibles) were 3.7p, up from 2.4p in H1
2005 (restated for the bonus element of the rights issue)


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

"It has been a good first half, with 22% underlying growth in adjusted
operating profit on a pro forma basis.  The Unilog integration and cost savings
are proceeding well and we have seen encouraging initial revenue synergies.
 
"We recently announced the acquisition of WM-data which will give us a leading
position in the Nordics, the fourth largest IT services market in Western
Europe.  This acquisition will deliver strong returns over the coming years."




Financial Headlines

For the six months ended 30 June 2006, LogicaCMG plc financial results were as
follows:

Revenue £1,243.1 million (2005: £891.7 million) - 39.4% higher than H1 2005 and
5.2% higher on a pro forma basis
Basic earnings per share were 0.7p, including restructuring costs and
amortisation of acquisition related intangibles (2005: 2.7p restated for the
bonus element of the rights issue)
Adjusted basic earnings per share at 3.7p, increased from 2.4p in H1 2005
(restated for the bonus element of the rights issue)
Book to bill ratio 1.15:1
Operating profit was £42.0 million including restructuring costs and
amortisation of acquisition related intangibles (2005: £40.8 million, growth of
2.9%)
Adjusted operating profit was £77.1 million (22.0% higher than H1 2005 on a pro
forma basis) (2005: £40.8 million, up 89.0%)
Group operating margin was 3.4% (2005: 4.6%)
Group adjusted operating margin was 6.2% (up from 5.3% in H1 2005 on a pro
forma basis) (2005: 4.6%)
Cash used in operations was £5.7 million (2005: cash generated from operations
£12.2 million)
Net cash inflow from trading operations was £7.7 million, compared to £10.8
million in H1 2005 on a pro forma basis (2005: £19.9 million)
Net debt, at 30 June 2006, stood at £424.7 million (£96.1 million at 31
December 2005)
Interim dividend of 2.20p compared to H1 2005 of 2.11p (restated for bonus
element of the rights issue)

Notes:
1 The adjusted earnings per share measure is based on net profit attributable
to ordinary shareholders excluding the following items:
discontinued operations
exceptional items
mark-to-market gains and losses on financial assets and financial liabilities
designated at fair value through profit and loss
amortisation of those intangible assets initially recognised in an acquisition
at fair value
tax on the items above, where applicable

2. Adjusted operating profit and margin exclude, whenever such items occur, the
results from discontinued operations, exceptional items and amortisation of
those intangible assets initially recognised at fair value in a business
combination.

                           H1      H1 05 Pro       H1 05    Pro forma    Growth
                           06          forma      Actual       Growth          
                                                                               
Operating profit         42.0                       40.8                   2.9%
                                                                               
Add back impact of:                                                            
                                                                               
   Exceptional items     23.6                          -                       
                                                                               
   Intangible                                                                  
amortisation             11.5                          -                       
                                                                               
Adjusted operating                                                             
profit                   77.1           63.2        40.8        22.0%     89.0%
                                                                               



3.Pro forma numbers are presented as if Unilog and Edinfor were consolidated
from 1 January 2005 to enable more meaningful comparison to the prior period. 

4.Net cash inflow from trading operations is cash generated from operations
excluding the cash flow effect of restructuring charges and other exceptional
items.  Cash conversion represents net cash inflow from trading operations
divided by adjusted operating profit.


For further information please contact:

Carolyn Esser - media relations                            020 7446 1786 
                                                   (mobile: 07841 602391)

Karen Keyes/Frances Gibbons - investor relations           020 7446 4341 
                                                   (mobile: 07801 723682)

Toby Mountford/Seb Hoyle - Citigate Dewe Rogerson          020 7638 9571 
                                                   (mobile: 07710 356611)

NOTE: High resolution images are available for the media to view and download
free of charge from www.vismedia.co.uk

INTERIM STATEMENT 2006

OVERVIEW

Note:  Pro forma numbers are presented as if Unilog and Edinfor were
consolidated from 1 January 2005 to enable more meaningful comparison to the
prior period.  Adjusted operating profit and margin exclude, whenever such
items occur, the results from discontinued operations; exceptional items; and
amortisation of those intangible assets initially recognised at fair value in a
business combination.


Demand for IT services has continued to improve.  Our order intake in the first
half of 2006 was strong with a book to bill ratio at 1.15:1.  Significant new
contracts were awarded to LogicaCMG in the period by InBev, Welsh Water, the UK
Ministry of Defence (Defence Medical Information Capability Programme), the
European Space Agency (Galileo global navigation satellite system), the
Netherlands Workers' Insurance Authority (UWV) and a Financial Services
customer in the Middle East.

The increased demand is causing some tightening of labour markets in our major
geographies with the supply of new graduates in developed economies becoming
more limited.  The ability to deploy resources on a global basis is therefore
increasingly important in fulfilling customer needs.  In this climate, we have
been recruiting in all of our operations, focusing on sought-after skills. 
Growth in our offshore employee base in India is continuing.  Overall staffing
levels at 30 June were 29,505 compared to 29,469 on completion of the Unilog
acquisition in January.  We are supplementing our own staff with subcontractors
in a number of markets, particularly the UK and the Netherlands.

We are able to achieve increased prices for the higher demand skill areas,
allowing us to compensate for wage increases.

The United Kingdom continues to be our most competitive market and the one in
which we see the most demand for globally sourced projects.  European customers
showed increasing interest in our global service delivery capability in the
first half of the year, with our blended model - which mixes onsite, onshore,
nearshore and offshore resources to deliver services to customers - playing an
influential role in a number of contracts awarded to us recently.  This
capability also provides us with increased capacity to meet the higher level of
demand for shorter term projects as we redeploy resources.  We expect this to
be a significant factor in achieving synergies from the proposed WM-data
acquisition.

The acquisition of Unilog contributed to an uplift of over 39.4% in group
revenue on a reported basis.  Pro forma growth in France was strong at 7.6%. 
The early integration in France has led to encouraging initial revenue
synergies.  We have won over €40 million of opportunities through cross-selling
to date.  These include a €23 million contract with a major Financial Services
client and a €10 million, two year contract with the Ministry of Defence for
modernisation of the HR infrastructure for the French land forces.

In Germany, the integration resulted in significant restructuring in the first
half.  We implemented a new organisation in the consulting and systems
integration business in the first quarter, with 148 employees exiting the
business.  Inevitably, results in the first quarter were significantly affected
by uncertainty surrounding the restructuring.  There were major improvements in
performance during the second quarter, as the cost savings came on stream
driven by a stronger management team.  We expect profitability to continue to
improve through the second half and to exit the year with a profitable run
rate. 

Overall, restructuring costs are expected to be in line with our previous
guidance of £28 million, of which £23.6 million were incurred in the first
half.  The cost savings are proceeding as planned, with the bulk of the savings
expected in Germany.

On a pro forma basis, the group delivered revenue growth of 5.2% to £1,243.1
million, in line with our expectations.  IT Services revenues grew by 5.5% on a
pro forma basis over the corresponding period last year with growth in all
regions except the UK where we saw a lower level of materials pass-through, as
anticipated.  Outsourcing as a percentage of group revenue was 25% in the first
half of the year.

On a pro forma basis, adjusted operating profit was up £13.9 million to £77.1
million, mainly as a result of improvements in the Netherlands, France, and
Telecoms Products.  The adjusted operating margin was 6.2%, up from 5.3% last
year on a pro forma basis. 

Adjusted basic earnings per share were 3.7p, up from 2.4p last year.  Basic
earnings per share were 0.7p (2005: 2.7p, adjusted for the bonus element of the
rights issue). 

As in previous years, our cash flow was seasonally weaker in the first half of
2006, influenced by strong fourth quarter collections in 2005.  The net cash
inflow from trading operations was £7.7 million (2005: £19.9 million). 

Largely as a result of the payment for Unilog in the first half of the year,
net debt was £424.7 million at 30 June 2006 (31 December 2005: £96.1 million).

The proposed acquisition of WM-data is expected to complete towards the end of
the year.  We would not therefore expect to consolidate a significant
proportion of WM-data annualised revenue (2005 revenue: £682 million/SEK 9,265
million) in the current financial year.  Net debt is expected to increase due
to new facilities to finance the cash consideration of the transaction but we
would expect to remain comfortably within our debt covenants.  We will provide
a further update to the market as to the timing of these effects as and when
appropriate. 

The directors have declared an interim dividend for the six months ended 30
June 2006 of 2.20p to be paid on 20 October 2006 to shareholders on the
register at the close of business on 22 September 2006.  This compares to a
2005 first half dividend of 2.11p (when restated for the bonus element of the
rights issue).



OUTLOOK

Demand for IT Services continues to improve.  We expect 2006 pro forma revenue
growth to be ahead of last year's 5.3%.  Unilog is performing well and the cost
savings from the acquisition will largely benefit the second half. As
previously indicated, improving market conditions are resulting in a tightening
labour market with increased use of contract labour to satisfy demand. 
Overall, our expectations for the year remain unchanged. 


MARKET SECTOR REVIEW

                                                             % Growth                 
                                            H1'05   H1'05    H1'06 on                 
Revenue by sector               H1'06         £'m     £'m       H1'05         % Growth
                                  £'m   Pro forma  Actual   Pro forma   H1'06 on H1'05
                                                                                      
Telecoms products               123.0       120.0   120.0         2.5              2.5
                                                                                      
Telecoms Services               109.6        80.1    56.7        36.8             93.3
                                                                                      
Telecommunications              232.6       200.1   176.7        16.2             31.6
                                                                                      
Public Sector                   284.3       266.9   235.2         6.5             20.9
                                                                                      
Industry, Distribution &        294.5       279.8   161.5         5.3             82.4
Transport                                                                             
                                                                                      
Energy & Utilities              204.0       233.6   174.7      (12.7)             16.8
                                                                                      
Financial Services              227.7       201.7   143.6        12.9             58.6
                                                                                      
Total Group                   1,243.1     1,182.1   891.7         5.2             39.4
                                                                                      


Compared to the first half of last year, pro forma revenue growth was 5.2% with
growth in all sectors except Energy and Utilities. 

The decline in Energy and Utilities when compared to the first half of last
year on a pro forma basis was mainly due to the expected lower pass through
materials revenue in the UK business.  We have seen a trend in this sector
towards longer term applications management contracts.  In the first half, we
were selected as the fourth global key application supplier to Shell which is
expected to benefit the UK as well as other geographies. 

We saw growth of over 5% in Industry, Distribution and Transport on a pro forma
basis due to stronger market demand, with a notable €70 million European
outsourcing win with InBev.  LogicaCMG will be a key strategic partner for
applications management across InBev's operations in Western Europe. 

Financial Services was up almost 13% on a pro forma basis, with double digit
revenue growth in the United Kingdom, the Netherlands and France.  The order
book in Financial Services is being driven by the market environment.  We are
seeing a general demand for applications work as well as demand for payments
infrastructure transformation by Financial Services companies ahead of the
Single European Payments Area (SEPA) coming into effect in 2007.  This is an
area in which we are well positioned to work with major European financial
services institutions. 

The strongest growth was in Telecoms Services, which grew 37% on a pro forma
basis.  Telecoms Services revenue was up significantly in four of our six
markets, including in Asia where we saw increased revenue as we began delivery
of our contract with telecoms operator Natrindo.  

Public Sector revenue increased almost 7% on a pro forma basis, with stronger
growth in our mainland European geographies counterbalancing slower growth in
the UK, in line with our previous guidance.  European wins include a contract
with the European Space Agency, the French Ministry of Defence and the Workers
Insurance Authority (UWV) in the Netherlands. 


UNITED KINGDOM

Revenue by market                  H1'05  H1'05           % Growth               
sector                   H1'06       £'m    £'m     H1'06 on H1'05        % Growth
                           £'m Pro forma Actual          Pro forma  H1'06 on H1'05
                                                                                       
Public Sector            174.0     168.9  168.1                3.0             3.5
                                                                                       
Industry, Distribution &  67.5      58.8   55.6               14.8            21.4
Transport                                                                              
                                                                                       
Energy & Utilities        53.1      91.2   90.7              (41.8)          (41.5)
                                                                                       
Financial Services        39.8      32.2   31.3               23.6            27.2
                                                                                       
Telecommunications        30.2      24.7   24.3               22.3            24.3
                                                                                       
Total                    364.6     375.8  370.0               (3.0)           (1.5)
                                                                                       
                                                                                       
                                                                                       
                                   H1'05  H1'05                                        
                         H1'06 Pro forma Actual                                        
                                                                                       
Adjusted Operating        9.1%      9.1%   9.4%                                        
Margin                                                                                 
                                                                                       



As a result of the lower level of pass-through materials revenue in the first
half, UK revenue was slightly below last year on a pro forma basis. Increases
from Financial Services (up 24% on a pro forma basis) and Industry,
Distribution and Transport (15% on a pro forma basis) broadly offset lower
Energy and Utilities revenue, with Public Sector revenue up slightly.

Our UK book to bill ratio was strong at 1.15:1 although we have seen a
continued shift to larger numbers of smaller deals and more project related
work, particularly in Financial Services.  Demand for skills such as onshore
project management, technical architects and business consulting is also
strong. 

Industry, Distribution and Transport revenue grew 15% on a pro forma basis,
driven by outsourcing contracts with transport operators and ongoing revenue
with commercial customers.

The Public Sector continues to be an important contributor to UK revenue.  UK
Public Sector revenue was up 3% on the first half of last year and up 7%
sequentially on a pro forma basis despite the more challenging market.  We
recorded initial revenue for development and test specification activities
under our recently announced £80 million Defence Medical Information Capability
Programme contract with the UK Ministry of Defence.   Within Public Sector,
Space and Defence revenue represents just under a third of revenue.  Order
intake in Space and Defence has been broadly stable, with revenue in the first
half up approximately 14% on pro forma basis the same period last year.  Work
under our framework contract for the ATLAS consortium has also contributed to
revenue in Space and Defence in the half.  We continue to expect full year
revenue growth in this sector.

The lower level of pass through materials revenue resulted in a significant
decline in Energy and Utilities revenue in the first half.   The renewal of our
contract with Welsh Water for the delivery of IT infrastructure, applications
and telecommunications services will contribute to future revenue in this
sector.

UK operating margin was stable against last year at 9.1% on a pro forma basis. 
Aggressive recruiting efforts allowed us to offset attrition.  The tighter
labour market resulted in increased use of subcontractors in the first half
with some impact on the margin.


FRANCE

                                  H1'05  H1'05             % Growth              
Revenue by market        H1'06      £'m    £'m   H1'06 on H1'05 Pro      % Growth
sector                     £'m      Pro Actual                forma      H1'06 on
                                  forma                                     H1'05
                                                                                    
Public Sector             31.6     27.3    3.7                 15.8         754.1
                                                                                    
Industry, Distribution & 124.2    122.1   31.9                  1.7         289.3
Transport                                                                           
                                                                                    
Energy & Utilities        32.0     28.9    2.3                 10.7       1,291.3
                                                                                    
Financial Services        73.3     64.6   14.7                 13.5         398.6
                                                                                    
Telecommunications        23.2     21.2    5.0                  9.4         364.0
                                                                                    
Total                    284.3    264.1   57.6                  7.6         393.6
                                                                                    
                                                                                    
                                                                                    
                                  H1'05  H1'05                                      
                         H1'06      Pro Actual                                      
                                  forma                                             
                                                                                    
Adjusted Operating        7.6%     6.6% (6.4)%                                      
Margin                                                                              
                                                                                    


French pro forma revenue growth was strong and in line with our expectations,
benefiting from a market that continues to perform well. 

Revenue growth in Financial Services was 14% on a pro forma basis, driven by
increased spending in the areas of business intelligence and customer
relationships.

The Public Sector also performed well with growth of almost 16% on a pro forma
basis.  We began delivery under new contracts with customers such as the
Gendarmerie Nationale.

Industry, Distribution and Transport was up slightly on a pro forma basis. 
Good performance from transportation clients and retail offset softness in the
automotive and pharmaceutical sectors. 

Revenue in Energy and Utilities was up 11% on a pro forma basis.  We were
selected as a preferred supplier to EDF.

In Telecommunications, we saw good growth on a pro forma basis with our
existing key clients.

Operating margin improved to 7.6% with high utilisation driving increased
efficiency.  The use of nearshore resources has also increased.  Restructuring
in France has been less significant than in Germany and has progressed in line
with our plans.  The net impact of restructuring offset with continued
recruitment in France left headcount at 8,159 at the end of June.


NETHERLANDS

Revenue by market                  H1'05  H1'05         % Growth               
sector                   H1'06       £'m    £'m   H1'06 on H1'05       % Growth
                           £'m Pro forma Actual        Pro forma   H1'06 on H1'05
                                                                                       
Public Sector             58.7      53.7   53.7              9.3            9.3
                                                                                       
Industry, Distribution &  53.2      45.6   45.6             16.7           16.7
Transport                                                                              
                                                                                       
Energy & Utilities        25.0      25.3   25.3             (1.2)          (1.2)
                                                                                       
Financial Services        72.2      63.0   63.0             14.6           14.6
                                                                                       
Telecommunications        13.0      12.3   12.3              5.7            5.7
                                                                                       
Total                    222.1     199.9  199.9             11.1           11.1
                                                                                       
                                                                                       
                                                                                       
                                   H1'05  H1'05                                        
                         H1'06 Pro forma Actual                                        
                                                                                       
Adjusted Operating        8.1%      6.4%   6.4%                                        
Margin                                                                                 
                                                                                       


The Netherlands business performed strongly in the first half.  The order
pipeline for the second half remains healthy, with an increased number of
larger deals.   This is due to a growing demand for outsourcing and customers
increasingly seeking to work with larger players. 

Revenue in Industry, Distribution and Transport was up 17% as we saw the
benefits of a stronger focus on key accounts.  

In Financial Services, we saw customers continuing to place more work with a
smaller number of key suppliers, as illustrated by our Memorandum of
Understanding with ING, signed in April.   Revenue was up 15%, with continued
demand for payments, channel management and risk and compliance.

Public Sector revenue grew by 9%, with clients continuing to focus on
operational cost management.  We expect this to drive outsourcing as well as
projects focused on reducing operational costs.  We also began to implement a
contract awarded in late 2005 for e-procurement for several Dutch ministries.

We saw a significant improvement in operating margin to 8.1%.  The improvement
over the first half of last year is attributable to increased use of offshore
resources, some price increases on time and materials work and better
utilisation rates.  We continue to recruit aggressively in the Dutch market to
meet higher demand levels and to reduce the dependence on subcontractors.


GERMANY

                                    H1'05   H1'05             % Growth              
Revenue by market         H1'06       £'m     £'m   H1'06 on H1'05 Pro      % Growth
sector                      £'m Pro forma  Actual                forma      H1'06 on
                                                                               H1'05
                                                                                       
Public Sector               5.0       4.9     0.4                  2.0       1,150.0
                                                                                       
Industry, Distribution &   35.6      37.8    16.9                 (5.8)        110.7
Transport                                                                              
                                                                                       
Energy & Utilities         10.9       9.5     6.8                 14.7          60.3
                                                                                       
Financial Services         19.5      20.1    14.3                 (3.0)         36.4
                                                                                       
Telecommunications         10.1       6.5     1.4                 55.4         621.4
                                                                                       
Total                      81.1      78.8    39.8                  2.9         103.8
                                                                                       
                                                                                       
                                                                                       
                                    H1'05   H1'05                                      
                          H1'06 Pro forma  Actual                                      
                                                                                       
Adjusted Operating       (6.7%)    (8.4%) (14.6)%                                      
Margin                                                                                 
                                                                                       



Activity in Germany has been dominated by the merger and restructuring of the
former LogicaCMG and Unilog businesses.  In this context the pro forma revenue
growth of 3% is encouraging.

Growth has been driven by Telecommunications where the business has benefited
from new contracts with Deutsche Telekom and Arcor.  In Energy and Utilities,
we won a new contract with EnBW.

Performance in the Public Sector was satisfactory.  The decline in Industry,
Distribution and Transport on a pro forma basis reflects the ongoing difficult
market conditions. 

Operating losses improved slightly compared to 2005 on a pro forma basis. 
Inevitably, the first quarter was significantly affected by uncertainty
surrounding the restructuring.  There were major improvements in performance
during the second quarter, as the cost savings came on stream driven by a
stronger management team.   We expect profitability to continue to improve
through the second half and to exit the year with a profitable run rate.  As
part of the restructuring, 148 people have left the business during the first
half.


REST OF EUROPE

                                                                                      
Revenue by market                  H1'05  H1'05              % Growth               
sector                   H1'06       £'m    £'m    H1'06 on H1'05 Pro         % Growth
                           £'m Pro forma Actual                 forma   H1'06 on H1'05
                                                                                      
Public Sector              5.6       5.2    2.4                   7.7            133.3
                                                                                      
Industry, Distribution &   7.7       6.9    2.9                  11.6            165.5
Transport                                                                             
                                                                                      
Energy & Utilities        56.3      51.8   25.2                   8.7            123.4
                                                                                      
Financial Services        13.5      14.1   12.6                  (4.3)             7.1
                                                                                      
Telecommunications        11.5       9.4    7.7                  22.3             49.4
                                                                                      
Total                     94.6      87.4   50.8                   8.2             86.2
                                                                                      
                                                                                      
                                                                                      
                                  H1'05   H1'05                                       
                         H1'06 Pro forma Actual                                       
                                                                                      
Adjusted Operating        4.8%      4.0%   1.6%                                       
Margin                                                                                
                                                                                      


This region comprises our businesses in Portugal, Spain, Belgium, Switzerland,
the Nordics and Central and Eastern Europe.  On a pro forma basis, revenues
increased over 8% with margins up to 4.8%.

Iberia continues to perform in line with our expectations with the most
significant growth coming from Telecommunications on the back of the
outsourcing contract with Oni.  We continue to develop the nascent Public
Sector and Financial Services businesses.  In Energy and Utilities we continued
to deliver the core outsourcing contract to EDP and provide services to assist
with market deregulation.

In Belgium, there were good performances in Financial Services, the Public
Sector and Energy and Utilities.  This business has now returned to
profitability.  

In Central and Eastern Europe, the market is becoming increasingly competitive
as consolidation continues to be driven by acquisition of local companies by
global players.  Performance has improved following a difficult year in 2005.


REST OF WORLD

Revenue by market                   H1'05  H1'05                % Growth               
sector                   H1'06        £'m    £'m      H1'06 on H1'05 Pro       % Growth
                           £'m  Pro forma Actual                   forma H1'06 on H1'05
                                                                                       
Public Sector              9.4        6.9    6.9                    36.2           36.2
                                                                                       
Industry, Distribution &   6.3        8.6    8.6                  (26.7)         (26.7)
Transport                                                                              
                                                                                       
Energy & Utilities        26.7       26.9   24.4                   (0.7)            9.4
                                                                                       
Financial Services         9.4        7.7    7.7                    22.1           22.1
                                                                                       
Telecommunications        21.6        6.0    6.0                   260.0          260.0
                                                                                       
Total                     73.4       56.1   53.6                    30.8           36.9
                                                                                       
                                                                                       
                                                                                       
                                    H1'05  H1'05                                       
                         H1'06  Pro forma Actual                                       
                                                                                       
Adjusted Operating        2.6%       1.2%   1.3%                                       
Margin                                                                                 
                                                                                       


The Rest of World operations have grown significantly after closing a number of
key deals last year.  In Asia, growth was driven by Telecommunications,
predominantly from the contract won in December with PT Natrindo Telepon
Seluler (NTS), a mobile telecoms operator in Indonesia.  In the Middle East, we
continue to deliver services to Public Sector clients.  Work with Financial
Services clients includes an ongoing contract for a national payments
infrastructure and a recently awarded contract for a core banking system
transformation.

The Australian business continued to perform well in Energy and Utilities and
expanded its reach in Public Sector.  The market continues to seek operational
efficiencies and we have seen a greater drive towards outsourcing.  In the US
we have focused on the integration and reorganisation of the business following
the Worksuite acquisition in January, which is progressing to schedule.


TELECOMS PRODUCTS

                         EMEA           Asia          Americas          TOTAL    
                                       Pacific                           
                                                                   
Product area        £'m        %    £'m        %    £'m        %     £'m        %
                          change          change          change           change
                                                                   
Messaging          37.2      0.3   15.1    (6.8)   22.8      8.1    75.1      0.9
                                                                   
Multimedia/         8.4   (12.5)    1.9   (50.0)    1.7   (34.6)    12.0   (25.0)
Internet                                                           
                                                                   
Unified Comms       8.1    153.1    1.6   (23.8)    1.7   (26.1)    11.4     50.0
                                                                   
Payment/Billing    10.8      9.1    8.6   (14.0)    5.1    142.9    24.5     11.4
                                                                   
TOTAL              64.5      7.9   27.2   (15.3)   31.3     11.4   123.0      2.5
                                                                   

 

                                          H1'05
                                  H1'06  Actual
                                             
Adjusted Operating Margin          2.6%    1.0%
                                              


Telecoms products revenue grew by 2.5% overall.  Revenues in the traditional
messaging product area were flat with encouraging growth in Unified
Communications and Payments/Billing. 

In Unified Communications, we extended the customer base from purely mobile
operators.  Over half of our new contract wins have come from fixed line Tier
One operators. We now have more than 30 customers in Unified Communications. 
We are seeing demand for both voice and video mail and we signed our first
hosting deal in North America. 

Multimedia revenues were lower, reflecting operators' focus on higher value
video and content packages for subscribers. 

Payments revenues increased 11%, with performance particularly strong in the
Middle East and North America where we completed expansion projects with
existing customers.

Although we remain cautious about phasing, we continue to expect growth in
newer technologies, particularly Unified Communications.  Unified
Communications provide some of the building blocks for operators undertaking
fixed to mobile convergence. 

Cost management continues to be an important focus in this competitive market
and we continue to improve the efficiency of the support activity and to make
greater use of the Group's lower cost centres.


CASH FLOW AND DEBT

The net cash inflow from trading operations was £7.7 million, compared to 2005
inflow of £19.9 million and pro forma net cash inflow of £10.8 million. 
Following the high level of collections in the fourth quarter of 2005, there
was some increase in working capital levels during the half.  Revenue growth in
the business resulted in a proportionate increase in working capital and, as in
2005, France had an operating cash outflow as a result of prior year incentives
and bonuses being paid in the first half.  Furthermore, there was an increase
in seasonal prepayments that will unwind in the full year.  We expect full year
cash conversion to be close to our target of 100% of adjusted operating profit,
and consequently to significantly reduce net debt during the second half.

Group net debt at 30 June 2006 was £424.7 million, compared to £96.1 million as
at 1 January 2006, with the increase being largely attributable to the
consideration for Unilog and the increased working capital requirement outlined
above.


ACQUISITION ACCOUNTING

On 13 January 2006, the group acquired a controlling 96.6% interest in the
ordinary share capital of Unilog S.A. (Unilog).  The cost of the acquisition
was £619.2 million.  Under IFRS, the Group is required to value the assets
acquired at fair value.  The fair value adjustments contain some provisional
amounts which will be finalised within 12 months from the date of the
acquisition. 

Certain intangible assets (relating to acquired trade names, customer contracts
and internally generated software) have been provisionally valued at £141.4
million.  The goodwill recognised of £423.3 million is attributable to
anticipated synergies and the value of the workforce.

 
DIVIDEND

Following the restatement of the 2005 interim dividend to reflect the bonus
element of the rights issue, the directors have proposed an interim dividend of
2.20 pence per share, representing a 4.3% increase over the previous year.  The
interim dividend will be paid on 20 October 2006 to shareholders on the
register at the close of business on 22 September 2006. 
 

Condensed consolidated income statement (unaudited)
For the six months ended 30 June 2006

                                                                                   
                                                                          Restated*
                                                     Six months          six months
                                                          ended               ended
                                                        30 June             30 June
                                                           2006                2005
                                                                                   
                                     Note                   £'m                 £'m
Revenue                               4                 1,243.1               891.7
Net operating costs                                    (1,201.1)             (850.9)
Operating profit                     4,6                   42.0                40.8
Analysed as:                                                                       
Operating profit before exceptional                        65.6                40.8
items                                                                              
Restructuring costs                   5                   (23.6)                  -
Operating profit                                           42.0                40.8
Interest payable                                          (17.1)               (9.4)
Interest receivable                                         4.7                 5.8
Share of post-tax losses from                              (0.1)                  -
associates                                                                         
Profit before tax                                          29.5                37.2
Taxation                              8                   (19.2)              (13.5)
Net profit for the period                                  10.3                23.7
                                                                                   
Attributable to:                                                                   
Equity holders of the parent                                7.8                22.7
Minority interests                                          2.5                 1.0
                                                           10.3                23.7

Earnings per share                                     p / share          p / share**
- Basic                               9                     0.7                 2.7  
- Diluted                             9                     0.7                 2.5  

Earnings per share from continuing                                                   
operations                                                                           
- Basic                               9                     0.7                 2.7  
- Diluted                             9                     0.7                 2.5  
                                                                                     

*  Restated as further described in note 2.
** Restated for the bonus element of the rights issue that took place in
November 2005.

The notes on pages 16 to 25 form an integral part of this condensed interim
financial information.

Note:
Dividends recognised in the period amounted to £36.2 million (six months ended
30 June 2005: £25.8 million), or 3.2p per share (six months ended 30 June 2005:
3.08p per share).  The interim dividend proposed but not recognised in these
interim financial statements amounted to £24.9 million (six months ended 30
June 2005: £17.7 million), or 2.2p per share (six months ended 30 June 2005:
2.11p per share).  (Dividends per share have been restated for the bonus
element of the rights issue.)

Condensed consolidated statement of recognised income and expense (unaudited)
For the six months ended 30 June 2006

                                                                  Restated*
                                                     Six                six
                                                  months             months
                                                   ended              ended
                                                 30 June            30 June
                                                    2006               2005
                                                                           
                                                     £'m                £'m
                                                                           
Exchange differences on translation of foreign        2.4               3.3
operations                                                                 
Actuarial losses on defined benefit plans            (4.0)             (7.0)
Tax on items taken directly to equity                 1.1               1.9
Net expense recognised directly in equity            (0.5)             (1.8)
Profit for the period                                10.3              23.7
Total recognised income and expense for the           9.8              21.9
period                                                                     

Attributable to:                                                           
Equity holders of the parent                          7.3              20.9
Minority interest                                     2.5               1.0
                                                      9.8              21.9
                                                                           
* Restated as further described in note 2.

The notes on pages 16 to 25 form an integral part of this condensed interim
financial information.


Condensed consolidated balance sheet (unaudited)
30 June 2006

                                                      Restated*       Restated*
                                        30 June     31 December         30 June
                                           2006            2005            2005
                                                                               
                                 Note       £'m             £'m             £'m
                                                                               
Non-current assets                                                             
Goodwill                                  821.3           385.4           382.2
Other intangible assets                   162.4            25.3            23.6
Property, plant and equipment     10      107.9           102.5           103.8
Investments in joint ventures               0.5           305.5             0.5
and associates                                                                 
Other investments                           9.4             9.1             8.4
Retirement benefit assets                  13.8            15.3               -
Deferred tax assets                        37.1            36.0            33.7
Total non-current assets                1,152.4           879.1           552.2
                                                                               
Current assets                                                                 
Inventories                                 3.8             2.4             2.8
Trade and other receivables               920.2           648.2           671.5
Current tax assets                         11.2            21.2            19.5
Cash and cash equivalents                 125.9           245.3            88.5
Total current assets                    1,061.1           917.1           782.3
                                                                               
Current liabilities                                                            
Convertible debt                         (210.3)         (205.0)         (200.8)
Other borrowings                          (22.9)          (18.5)          (45.9)
Trade and other payables                 (658.8)         (453.1)         (409.6)
Current tax liabilities                   (22.0)          (14.2)          (14.7)
Provisions                        11      (18.0)           (6.7)           (9.2)
Total current liabilities                (932.0)         (697.5)         (680.2)
                                                                                
Net current assets                        129.1           219.6           102.1
Total assets less current               1,281.5         1,098.7           654.3
liabilities                                                                    
                                                                               
Non-current liabilities                                                        
Borrowings                               (317.4)         (117.9)         (144.8)
Retirement benefit obligations            (79.8)          (77.9)          (83.1)
Deferred tax liabilities                  (48.1)          (56.3)          (43.9)
Provisions                        11      (12.1)           (8.3)           (7.9)
Other non-current liabilities              (0.9)           (1.0)           (1.2)
Total non-current liabilities            (458.3)         (261.4)         (280.9)
Net assets                                823.2           837.3           373.4
                                                                               
Equity
Share capital                     12      114.8           114.6            75.1
Share premium account             13    1,087.0         1,084.8           707.4
Other reserves                           (402.4)         (379.3)         (424.8)
Total shareholders' equity                799.4           820.1           357.7
Minority interests                         23.8            17.2            15.7
Total equity                              823.2           837.3           373.4
                                                                               
* Restated as further described in note 2 and 3.

The notes on pages 16 to 25 form an integral part of this condensed interim
financial information.


Condensed consolidated cash flow statement (unaudited)
For the six months ended 30 June 2006

                                                                              Restated*
                                                                Six months   six months
                                                                     ended        ended
                                                                   30 June      30 June
                                                                      2006         2005
                                                                                       
                                                         Note          £'m          £'m
Cash flows from operating activities                                                   
Net cash inflow from trading operations                                7.7         19.9      
Cash outflow related to restructuring activities                     (13.4)        (7.7)     
Cash (used in)/generated from operations                  14          (5.7)        12.2      
Interest paid                                                         (8.5)        (4.2)     
Income tax paid                                                      (10.3)        (8.5)     
Net cash outflow from operating activities                           (24.5)        (0.5)     
                                                                                       
Cash flows from investing activities                                                   
Interest received                                                      2.9          0.6       
Proceeds on disposal of property, plant and equipment                  2.7          0.6       
Purchases of property, plant and equipment                           (10.2)       (11.4)    
Expenditure on intangible assets                                      (8.8)        (2.6)     
Acquisition of subsidiaries (net of cash acquired)                  (209.9)       (35.4)    
Disposal of business                                                     -         (1.1)     
Net cash outflow from investing activities                          (223.3)       (49.3)    
                                                                                       
Cash flows from financing activities                                                   
Proceeds from issue of new shares                                      0.9          0.1       
Proceeds from bank borrowings                                        243.3         81.7      
Repayments of bank borrowings                                        (76.3)        (9.1)     
Repayments of finance lease principal                                 (1.4)        (1.6)     
Repayments of borrowings assumed in acquisitions                         -        (11.3)    
Repayments of other borrowings                                           -         (0.5)     
Dividends paid to the company's shareholders                         (36.2)       (25.8)    
Dividends paid to minority interests                                  (0.8)        (1.0)     
Net cash inflow from financing activities                            129.5         32.5      
                                                                                       
Net decrease in cash and cash equivalents                           (118.3)       (17.3)    
                                                                                       
Cash and cash equivalents at the beginning of the period  15         245.3        106.6     
Net decrease in cash and cash equivalents                 15        (118.3)       (17.3)    
Effect of foreign exchange rates                          15          (1.1)        (0.8)     
Cash and cash equivalents at the end of the period        15         125.9         88.5      
                                                                                       

* Restated as further described in note 2.

The notes on pages 16 to 25 form an integral part of this condensed interim
financial information.


Selected notes to the condensed consolidated interim financial information

1  Accounting policies and basis of preparation

The condensed interim financial information for the six months ended 30 June
2006 has been prepared in accordance with IAS 34, 'Interim financial reporting'
and should be read in conjunction with the annual financial statements for the
year ended 31 December 2005.  The accounting policies adopted in these
condensed interim financial statements are consistent with those of the annual
financial statements for the year ended 31 December 2005 except for the
following new standards, amendments to the standards and interpretations which
are mandatory for the financial year ending 31 December 2006 and have been
adopted in these condensed interim financial statements:

International Financial Reporting Standards ('IFRS')
IFRS 6 'Exploration for and Evaluation of Mineral Resources', effective for
annual periods beginning on or after 1 January 2006.  This standard was not
relevant for the group.

International Financial Reporting Interpretations Committee ('IFRIC')
interpretations
IFRIC 4 'Determining whether an arrangement contains a lease', effective for
annual periods beginning on or after 1 January 2006.  The adoption of IFRIC 4
had no material impact on the consolidated financial statements.
IFRIC 5 'Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds', effective for annual periods beginning on
or after 1 January 2006.  This interpretation was not relevant for the group.
IFRIC 6 'Liabilities arising from Participating in a Specific Market - Waste
Electrical and Electronic Equipment', effective for annual periods beginning on
or after 1 January 2006.  This interpretation was not relevant for the group.

Amendments to existing standards
Amendment to IAS 21 'The Effects of Changes in Foreign Exchange Rates' - Net
Investment in a Foreign Operation, effective for annual periods beginning on or
after 1 January 2006.   The adoption of this amendment had no material impact
on the consolidated financial statements.
Amendments to IAS 39 'Financial Instruments: Recognition and Measurement' -
Cash flow hedge accounting of forecast intra-group transactions, effective for
annual periods beginning on or after 1 January 2006.  The amendment for cash
flow hedge accounting was not relevant for the group.
Amendments to IAS 39 'Financial Instruments: Recognition and Measurement' and
IFRS 4 'Insurance Contracts', effective for annual periods beginning on or
after 1 January 2006.  This amendment was not relevant to the group.
Amendments to IFRS 1 'First-time Adoption of International Financial Reporting
Standards' and IFRS 6 'Exploration for and Evaluation of Mineral Resources',
effective for annual periods beginning on or after 1 January 2006.  These
amendments were not relevant for the group.

The following new standards, amendments to standards and interpretations have
been issued but are not effective for 2006 and have not been early adopted:

IFRS 7 'Financial Instruments: Disclosures', effective for annual periods
beginning on or after 1 January 2007.  The main impact on the group will be
additional disclosures.
IFRIC 7 'Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies', effective for annual periods beginning on or
after 1 March 2006.  No significant impact on the consolidated financial
statements is expected.
IFRIC 8 'Scope of IFRS 2', effective for annual periods beginning on or after 1
May 2006.  No significant impact on the consolidated financial statements is
expected.
IFRIC 9 'Reassessment of embedded derivatives', effective for annual periods
beginning on or after 1 June 2006.  Management believes that this
interpretation should not have a significant impact on the reassessment of
embedded derivatives as the group already assessed if embedded derivatives
should be separated using principles consistent with IFRIC 9.
Amendment to IAS 1 'Presentation of Financial Statements' - Capital
disclosures, effective for annual periods beginning on or after 1 January
2007.  The main impact on the group will be additional disclosures.


This interim report does not constitute statutory accounts of the group within
the meaning of section 240 of the Companies Act 1985.  Statutory accounts for
the year ended 31 December 2005, which were prepared under International
Financial Reporting Standards, have been filed with the Registrar of
Companies.  The auditors' report on those accounts was unqualified and did not
contain a statement under section 237(2) and 237(3) of the Companies Act 1985.


1. Accounting polices and basis of preparation (continued)

The most important foreign currency for the group is the euro.  The relevant
exchange rates to pounds sterling were:

                                      30 June 2006                          30 June 2005
                        Average            Closing            Average            Closing
                                                                                        
£1 = €                     1.46               1.45               1.46               1.48
                                                                                        



2  Restatement of income statement for the period ended 30 June 2005 and
balance sheet at 30 June 2005

Employee benefits (IAS 19)
Following the results of the most recent triennial actuarial valuation of the
CMG UK Pension Scheme, which was completed in December 2005, the deficit on the
scheme at 30 June 2005 has been revised from £43.3 million to £66.2 million.
 The scheme deficit as previously reported at 30 June 2005 was based on a
roll-forward of the defined benefit obligation from the formal actuarial
valuation of the scheme as at 1 July 2002 using estimation techniques, as
permitted under IFRS.

The most recent actuarial valuation has shown that the use of estimation
techniques understated the defined benefit obligation compared to a
comprehensive member-by-member assessment of the defined benefit obligation. 
As a consequence of the materiality of the adjustment, the comparative
information has been amended as follows:
an increase of £22.9 million in the retirement benefit liability associated
with the CMG UK Pension Scheme, together with a consequential increase in
deferred tax assets of £6.8 million on the 30 June 2005 balance sheet; and
an increase of £0.5 million in finance costs and decrease of £0.1 million in
the tax charge in the income statement for the six months ended 30 June 2005.  

Deferred tax (IAS 12)
Deferred tax assets increased by £1.7 million due to the release of deferred
tax previously recognised for goodwill generated on the acquisition of a
business in Australia in 2000.

Business combinations (IFRS 3)
Following the provisions of IFRS 3 'Business combinations' which permit the
group 12 months to adjust the value of net assets acquired to their fair
values, the provisional fair values for the Edinfor acquisition were
finalised.  As a result, the fair value of net assets acquired decreased by £
9.7 million compared to the amounts previously reported at 30 June 2005.  The
decrease of £9.7 million is analysed as follows:

                                                                              £'m
                                                                                     
Other intangible assets                                                       6.0     
Property, plant and equipment                                                (7.6)   
Investments in joint ventures and associates                                 (0.1)   
Deferred tax assets                                                          (4.6)   
Inventories                                                                  (0.2)   
Trade and other receivables                                                   3.3     
Current tax assets                                                            0.3     
Trade and other payables                                                     (8.6)   
Current tax liabilities                                                      (0.4)   
Retirement benefit obligations                                               (1.3)   
Deferred tax liabilities                                                      2.3     
Provisions                                                                    1.2     
                                                                             (9.7)   
Minority interests                                                            3.9     
Change in share of net assets acquired                                       (5.8)   
Goodwill                                                                      5.8     
                                                                                     


Convertible debt
The group's convertible debt, amounting to £200.8 million at 30 June 2005, has
been reclassified to current liabilities from non-current liabilities.  IAS 1
'Presentation of Financial Statements' requires that liabilities should be
classified as current when the entity does not have an unconditional right to
defer settlement of the liability for at least twelve months after the balance
sheet date.  The convertible bonds are potentially exchangeable into ordinary
shares of the company at any time up to 14 days prior to 19 September 2008. 
Accordingly, the convertible bonds have been classified as a current liability
even though settlement may ultimately not occur until the redemption date of 19
September 2008.

Restatement of income statement for the period ended 30 June 2005 and balance
sheet at 30 June 2005 (continued)

Effect of the restatements on earnings per share
Basic earnings per share decreased from 2.8p per share (restated for the bonus
element of the rights issue) to 2.7p per share.  The diluted earnings per share
number did not change due to the restatements described above.  Adjusted
earnings per share decreased from 2.5p per share (restated for the bonus
element of the rights issue) to 2.4p per share.  Diluted adjusted earnings per
share did not change due to the restatements described above.

Effect of the restatements on shareholders' equity

                                                            Shareholders'
                                                                  equity
                                                                        
                                                                     £'m
                                                                                     
At 30 June 2005                                                    372.1             
                                                                                     
Restatement according to IAS 8:                                                      
- adjustment to pensions, net of tax                               (16.1)            
- deferred tax adjustment                                            1.7               
- restatement to fair value of assets acquired                         -                 
                                                                                     
Restated at 30 June 2005                                           357.7             
                                                                                     



3.  Restatement of balance sheet at 31 December 2005

Business combinations (IFRS 3)
As described above, the provisional fair values for the Edinfor acquisition
were finalised during the period to 20 April 2006 (within 12 months of the date
of acquisition).  As a result, the group's share of the fair value of net
assets acquired decreased by £2.0 million compared to the amounts previously
reported at 31 December 2005.  The decrease of £2.0 million is analysed as
follows:

                                                                              £'m
                                                                                     
Investments in joint ventures and associates                                 (0.1)   
Trade and other receivables                                                  (1.0)   
Trade and other payables                                                     (2.3)   
                                                                             (3.4)   
Minority interests                                                            1.4     
Change in share of net assets acquired                                       (2.0)   
Goodwill                                                                      2.0     
                                                                                     


The above restatement did not impact total shareholders' equity or earnings per
share.


4.  Segment information - primary basis

At 30 June 2006, LogicaCMG is organised into two business segments: IT services
and Telecoms products.  These two business segments are the group's primary
reporting format for segment information as they represent the dominant source
and the nature of the group's risks and returns.  Segment revenue and profit
after tax under the primary reporting format are disclosed in the table below.

                                                   Revenue          Profit after tax
                                                                                       
                                                                            Restated
                                   Six months   Six months   Six months   six months
                                        ended        ended        ended        ended
                                      30 June      30 June      30 June      30 June
                                         2006         2005         2006         2005
                                                                                       
                                          £'m          £'m          £'m          £'m
                                                                                       
IT services                           1,120.1        771.7         62.4         39.6      
                                                                                       
Exceptional items (relating to IT           -            -        (23.6)           -         
services)                                                                              
                                                                                       
Telecoms products                       123.0        120.0          3.2          1.2       
                                                                                       
                                      1,243.1        891.7         42.0         40.8      
                                                                                       
Interest payable                         -            -           (17.1)        (9.4)     
                                                                                       
Interest receivable                      -            -             4.7          5.8       
                                                                                       
Share of post-tax losses from            -            -            (0.1)          -         
associates                                                                             
                                                                                       
Taxation                                 -            -           (19.2)       (13.5)    
                                                                                       
                                      1,243.1        891.7          10.3         23.7      
                                                                                       


Segment information - primary basis (continued)

The group manages the IT services business segment on a geographic basis. 
Additional voluntary disclosures, not required under IFRS, are provided below
for the geographic sub-divisions within the IT services business segment.

                                                               Operating profit before
                                                Revenue           exceptional items   
                                                                                      
                                               Six       Six   Six months   Six months
                                            months    months        ended        ended
                                             ended     ended      30 June      30 June
                                           30 June   30 June         2006         2005
                                              2006      2005                          
                                                                                      
                                               £'m       £'m          £'m          £'m
                                                                                      
United Kingdom                               364.6     370.0         33.3         34.8      
                                                                                      
France                                       284.3     57.6          21.5         (3.7)     
                                                                                      
Netherlands                                  222.1     199.9         18.1         12.8      
                                                                                      
Germany                                       81.1      39.8         (5.4)        (5.8)     
                                                                                      
Rest of Europe                                94.6      50.8          4.5          0.8       
                                                                                      
Rest of World                                 73.4      53.6          1.9          0.7       
                                                                                      
                                           1,120.1     771.7         73.9         39.6      
                                                                                      
Amortisation of intangible assets                                                     
initially recognised on acquisition            -         -          (11.5)           -         
                                                                                      
                                           1,120.1     771.7         62.4         39.6      
                                                                                      


The comparative information in the table above has been amended to include
Iberia within Rest of Europe category. This has resulted in a reclassification
of revenue of £20.3 million, and an operating profit of 1.6 million, to the
Rest of Europe category in the six months ended 30 June 2005.

5.  Exceptional items

During the six months ended 30 June 2006, the group incurred a charge of £23.6
million mainly relating to the restructuring of the businesses in France and
Germany following the acquisition of Unilog S.A. ('Unilog') and the closure of
a building in the United States of America following the change of headquarters
after the Worksuite acquisition.  The restructuring comprised a reduction in
headcount, property restructuring provisions and other measures to reduce the
cost base.

6.  Adjusted operating profit

Adjusted operating profit excludes:  the results of discontinued operations,
exceptional items and amortisation of intangible assets initially recognised at
fair value in a business combination, whenever such items occur.  Adjusted
operating profit is not defined under IFRS and has been shown as the directors
consider this to be helpful for a better understanding of the performance of
the group's underlying business.  It may not be comparable with similarly
titled profit measurements reported by other companies and is not intended to
be a substitute for, or superior to, IFRS measures of profit.

                                                          Six months   Six months
                                                               ended        ended
                                                             30 June      30 June
                                                                2006         2005
                                                                                      
                                                                £'m          £'m
                                                                                      
Operating profit                                               42.0         40.8      
                                                                                      
Exceptional items                                              23.6         -         
                                                                                      
Amortisation of intangible assets initially recognised on      11.5         -         
acquisition                                                                           
                                                                                      
Adjusted operating profit                                      77.1         40.8      
                                                                                      


7.  Employees

                                                       Six months      Six months
                                                            ended           ended
                                                     30 June 2006    30 June 2005
                                                                                        
The average number of employees during the period was:     Number          Number
                                                                                        
United Kingdom                                             6,089           6,115        
                                                                                        
France                                                     8,233           1,537        
                                                                                        
Netherlands                                                5,731           5,783        
                                                                                        
Germany                                                    2,206           1,146        
                                                                                        
Rest of Europe                                             2,485           1,374        
                                                                                        
Rest of World                                              3,186           2,527        
                                                                                        
IT services                                                27,930          18,482       
                                                                                        
Telecoms products                                          1,674           1,712        
                                                                                        
                                                           29,604          20,194       
                                                                                        


Employees (continued)

                                                       Six months     Six months
                                                            ended          ended
                                                     30 June 2006   30 June 2005
                                                                                      
The number of employees at the end of the period was:      Number         Number
                                                                                      
United Kingdom                                             6,082          6,093       
                                                                                      
France                                                     8,159          1,515       
                                                                                      
Netherlands                                                5,712          5,787       
                                                                                      
Germany                                                    2,183          1,025       
                                                                                      
Rest of Europe                                             2,495          2,076       
                                                                                      
Rest of World                                              3,195          2,625       
                                                                                      
IT services                                                27,826         19,121      
                                                                                      
Telecoms products                                          1,679          1,611       
                                                                                      
                                                           29,505         20,732      
                                                                                      


The comparative information in the employee numbers tables above has been
amended to include Iberia within Rest of Europe category. This has resulted in
a reclassification of the average number of employees and the number of
employees at the balance sheet date of 529 and 1,233 respectively to the Rest
of Europe category. 

8.  Taxation

The tax charge on continuing operations for the six months ended 30 June 2006,
before operating exceptional items and amortisation of intangible assets
initially recognised on acquisition is £20.7 million (32.0% effective tax rate)
(six months ended 30 June 2005: £13.5 million (36.3% effective tax rate)) and
has been based on an estimated effective tax rate for the full year excluding
the impact of any exceptional items and amortisation of intangible assets
initially recognised on acquisition.  The decrease is mainly due to an increase
in the use of unrecognised losses brought forward. The total tax charge for the
six months ended 30 June 2006 is £19.2 million (six months ended 30 June 2005:
£13.5 million) of which a tax credit of £1.5 million (six months ended 30 June
2005: £nil) relates to exceptional items and amortisation of intangible assets
initially recognised on acquisition.

The tax charge includes an overseas charge of £11.4 million (six months ended
30 June 2005: tax credit of £2.7million).

9.  Earnings per share

                                                         Six months ended 30 June 2006 
                                                                                       
                                                                   Weighted           
                                                                    average    Earnings
                                                         Earnings    number         per
                                                                         of       share
                                                                     shares           
                                                                                       
                                                         £'m        million       pence
                                                                                       
Earnings per share                                                                     
                                                                                       
                                                                                       
                                                                                       
Earnings attributable to ordinary shareholders           7.8        1,131.3        0.7     
                                                                                       
Basic EPS                                                7.8        1,131.3        0.7     
                                                                                       
                                                                                       
                                                                                       
Effect of share options                                  -          10.3            -       
                                                                                       
Diluted EPS                                              7.8        1,141.6        0.7     
                                                                                       
                                                                                       
                                                                                       
                                                                                       
                                                                                       
Adjusted earnings per share                                                            
                                                                                       
                                                                                       
                                                                                       
Earnings attributable to ordinary shareholders           7.8        1,131.3      0.7     
                                                                                       
Add back:                                                                              
                                                                                       
Exceptional items, net of tax                            22.4       -            2.0     
                                                                                       
Mark-to-market loss on convertible bonds designated at                                 
fair value through profit or loss, net of tax            0.6        -            -       
                                                                                       
Amortisation of intangible assets initially recognised                                 
on acquisition, net of tax                               11.3       -            1.0     
                                                                                       
Basic adjusted EPS                                       42.1       1,131.3      3.7     
                                                                                       
Effect of share options                                  -          10.3         -       
                                                                                       
Effect of convertible bonds, excluding mark-to-market                                  
loss, net of tax                                         2.1        64.6         -       
                                                                                       
Diluted adjusted EPS                                     44.2       1,206.2      3.7     
                                                                                       

Earnings per share (continued)

                                                           Restated six months ended 30
                                                                              June 2005
                                                                                       
                                                                    Weighted           
                                                                     average   Earnings
                                                         Earnings     number        per
                                                                          of      share
                                                                      shares           
                                                                                       
                                                              £'m    million      pence
                                                                                       
Earnings per share                                                                     
                                                                                       
                                                                                       
                                                                                       
Earnings attributable to ordinary shareholders              22.7       838.5      2.7     
                                                                                       
Basic EPS                                                   22.7       838.5      2.7     
                                                                                       
                                                                                       
                                                                                       
Effect of share options                                      -          3.3        -       
                                                                                       
Effect of convertible bonds, net of tax                     (0.4)      64.6       (0.2)   
                                                                                       
Diluted EPS                                                 22.3       906.4      2.5     
                                                                                       
                                                                                       
                                                                                       
Adjusted earnings per share                                                            
                                                                                       
                                                                                       
                                                                                       
Earnings attributable to ordinary shareholders              22.7       838.5      2.7     
                                                                                       
Less:                                                                                  
                                                                                       
Mark-to-market gain on convertible bonds designated at                                 
fair value through profit or loss, net of tax               (2.5)      -          (0.3)   
                                                                                       
Amortisation of intangible assets initially recognised                                 
on acquisition, net of tax                                  -          -          -       
                                                                                       
Basic adjusted EPS                                          20.2       838.5      2.4     
                                                                                       
                                                                                       
                                                                                       
Effect of share options                                     -          3.3        -       
                                                                                       
Diluted adjusted EPS                                        20.2       841.8      2.4     
                                                                                       


For the six months ended 30 June 2006 and 30 June 2005, there was no difference
between earnings per share from continuing operations and earnings per share
from all operations.

Adjusted earnings per share, both basic and diluted, have been shown as the
directors consider this to be helpful for a better understanding of the
performance of the group's underlying business.  The earnings measure used in
adjusted earnings per share excludes, whenever such items occur: the results of
discontinued operations; exceptional items; mark-to-market gains or losses on
financial assets and financial liabilities designated at fair value through
profit or loss; and amortisation of intangible assets initially recognised at
fair value in a business combination.  All items adjusted are net of tax where
applicable.

The weighted average number of shares excludes the shares held by employee
share ownership plan trusts, which are treated as cancelled.

In the six months ended 30 June 2006, the convertible bonds were anti-dilutive
for the purposes of calculating diluted earnings per share and accordingly were
not included.  The convertible bonds were dilutive for adjusted earnings per
share and were therefore included for the purposes of calculating adjusted
diluted earnings per share.

The impact of the charge for share-based payments was to reduce adjusted basic
earnings per share for the six months ended 30 June 2006 by 0.4 pence per share
(six months ended 30 June 2005: 0.4 pence per share).


10.  Capital expenditure

Additions to equipment and plant during the six months ended 30 June 2006
amounted to £10.9 million (six months ended 30 June 2005: £12.6 million). The
net book value of assets disposed during the six months ended 30 June 2006
amounted to £2.7 million (six months ended 30 June 2005: £1.2 million).


11 Provisions

                                                                      Total          
                                                                        £'m
                                                                                       
At 1 January 2006                                                      15.0            
                                                                                       
Charged in the period                                                  25.0            
                                                                                       
Utilised in the period                                                 (14.0)          
                                                                                       
Acquisition of subsidiary                                              4.1             
                                                                                       
Exchange differences                                                   -               
                                                                                       
At 30 June 2006                                                        30.1            
                                                                                       
                                                                                       
                                                                                       
Analysed as:                                                                           
                                                                                       
Current liabilities                                                    18.0            
                                                                                       
Non-current liabilities                                                12.1            
                                                                                       
                                                                       30.1            
                                                                                       



12.  Share capital of LogicaCMG plc

                                                                           30       30
                                                                         June     June
                                                                         2006     2005
                                                                                      
Authorised                                                                £'m      £'m
                                                                                      
1,750,000,000 (30 June 2005: 1,100,000,000) ordinary shares of 10p      175.0    110.0 
each                                                                                  
                                                                                      


                                                            2006                   2005
                                                                                       
Allotted, called-up and fully paid               Number      £'m         Number     £'m
                                                                                       
At 1 January                              1,146,238,652    114.6    750,915,581    75.1
                                                                                       
Allotted under share option schemes       1,811,449        0.2      65,862         -   
                                                                                       
At 30 June                                1,148,050,101    114.8    750,981,443    75.1
                                                                                       



13.  Share premium

                                                                      2006     2005
                                                                                       
                                                                       £'m      £'m
                                                                                       
At 1 January                                                       1,084.8    707.3 
                                                                                       
Premium on shares allotted under share option schemes                  2.2      0.1   
                                                                                       
At 30 June                                                         1,087.0    707.4 
                                                                                       



14  Reconciliation of operating profit to cash generated from operations

                                                      Six months     Six months
                                                           ended          ended
                                                    30 June 2006   30 June 2005
                                                                                       
                                                             £'m            £'m
                                                                                       
Operating profit:                                                                      
                                                                                       
Continuing operations                                       42.0           40.8        
                                                                                       
                                                                                       
                                                                                       
Adjustments for:                                                                       
                                                                                       
Derivative financial instruments                            0.3            (0.8)       
                                                                                       
Share-based payments                                        5.0            2.9         
                                                                                       
Depreciation of property, plant and equipment               15.6           13.4        
                                                                                       
Amortisation of intangible assets                           16.8           2.6         
                                                                                       
Net movements in provisions                                 11.0           (3.8)       
                                                                                       
Non-cash element of expense for defined benefit plans       (0.4)          2.0         
                                                                                       
                                                            48.3           16.3        
                                                                                       
                                                                                       
                                                                                       
Movements in working capital:                                                          
                                                                                       
Inventories                                                 (1.5)          (0.3)       
                                                                                       
Trade and other receivables                                 (70.8)         (46.6)      
                                                                                       
Trade and other payables                                    (23.7)         2.0         
                                                                                       
                                                            (96.0)         (44.9)      
                                                                                       
                                                                                       
                                                                                       
Cash (used in)/generated from operations                    (5.7)          12.2        
                                                                                       
Add back:  Cash outflow related to restructuring            13.4           7.7         
activities                                                                             
                                                                                       
Net cash inflow from trading operations                     7.7            19.9        
                                                                                       


The cash flows from discontinued operations for the six months ended 30 June
2005 are not material for the group and accordingly have not been presented
separately.  The reconciliation of operating profit to cash generated from
operations in the table above represents the activities of both continuing and
discontinued operations.


15.  Reconciliation of movements in net debt

                        At             Acquisitions       Other                      At
                         1                      and    non-cash      Exchange   30 June
                   January      Cash     disposals*   movements   differences      2006
                      2006     flows                                                   
                                                                                       
                       £'m       £'m            £'m         £'m           £'m       £'m
                                                                                       
Cash and cash      245.3     (118.3)         -              -           (1.1)      125.9  
equivalents                                                                            
                                                                                       
Bank overdrafts    -         12.4            (17.4)         -             -        (5.0)  
                                                                                       
Finance leases     (4.8)     1.4              (0.8)        (2.1)          -         (6.3)  
                                                                                       
Bank loans         (131.2)   (179.4)         (16.5)        (0.7)       (0.8)     (328.6)
                                                                                       
Other loans        (0.4)     -               -              -           -          (0.4)  
                                                                                       
Convertible        (205.0)   -               -             (3.9)       (1.4)     (210.3)
bonds                                                                                  
                                                                                       
Net debt           (96.1)    (283.9)         (34.7)        (6.7)       (3.3)     (424.7)
                                                                                       

* Excludes cash and cash equivalents assumed on acquisition amounting to £120.6 million.

During the six months ended 30 June 2006, the group fully utilised its €348
million (£240 million) term loan maturing on 19 September 2010.  The facility
was solely used for the acquisition of shares in Unilog and associated
expenses.


16  Acquisition of subsidiaries

Acquisition of Unilog
On 13 January 2006, the group acquired a controlling 96.6 per cent interest in
the ordinary share capital of Unilog S.A. ('Unilog').  Due to the existence of
shares with double voting rights not held by the group, this equated to a 95.8
per cent interest in the voting rights of Unilog.  The Unilog group of
companies is a leading IT services provider of management and IT consultancy,
systems integration, outsourcing and training services based in France and with
overseas offices in Germany, Switzerland, the United Kingdom, Austria and
Luxembourg.

The group's 96.6 per cent interest in Unilog at the date of acquisition was
acquired through the following steps:
a 'block trade' purchase from certain members of the senior management of
Unilog of 32.3 per cent on 25 October 2005;
market purchases during November, December 2005 and January 2006, amounting to
an additional 14.8 per cent interest; and
a further bulk purchase of 49.5 per cent on 13 January 2006 following the
completion of the public tender offer.

The cost of the acquisition of £619.2 million is analysed below.  The cost of
acquisition included 19,572,703 ordinary shares issued as part of the block
trade purchase.  The shares were attributed a fair value based on the closing
mid-market price prevailing on 25 October 2005 of 143.5 pence.

The provisional fair value of the identifiable assets and liabilities acquired
at the date of acquisition were:
 

                                       Carrying                
                                         amount    Provisional
                                pre-acquisition     fair value
                                                              
                                           £'m             £'m
                                                               
Net assets acquired:                                           
                                                               
Intangible assets                          2.0            142.7        
                                                                                       
Property, plant and equipment              14.7            13.3         
                                                                                       
Investments in associates                  0.1              0.1          
                                                                                       
Other investments                          1.5               -            
                                                                                       
Available for sale investment              -                0.3          
                                                                                       
Deferred tax                               1.4              2.3          
                                                                                       
Trade and other receivables                199.9          197.9        
                                                                                       
Cash and cash equivalents                  120.6          120.6        
                                                                                       
Trade and other payables                   (214.4)        (225.1)      
                                                                                       
Current tax payable                        -                (0.4)        
                                                                                       
Borrowings                                 (34.7)          (34.7)       
                                                                                       
Provisions                                 (3.9)            (4.1)        
                                                                                       
Retirement benefit obligation              (7.2)            (7.3)        
                                                                                       
                                           80.0            205.6        
                                                                                       
Minority interests                                          (7.4)        
                                                                                       
Share of net assets acquired                               198.2        
                                                                                       
Profit recognised as an associate                           (2.3)        
                                                                                       
                                                            195.9        
                                                                                       
Goodwill                                                    423.3        
                                                                                       
Total consideration                                         619.2        
                                                                                       
                                                                                       
                                                                                       
Total consideration comprised:                                                         
                                                                                       
Cash                                                        582.0        
                                                                                       
New ordinary shares issued                                   28.1         
                                                                                       
Directly attributable costs                                   9.1          
                                                                                       
                                                            619.2        
                                                                                       


The fair value adjustments contain some provisional amounts which will be
finalised within 12 months from date of acquisition.  The values of certain
intangible assets and deferred tax thereon, relating to acquired trade names,
customer contracts and internally generated software were provisionally valued
at £141.4 million.  The goodwill recognised of £423.3 million is attributable
to anticipated synergies and the value of the work force.

Unilog contributed revenues of £281.3 million and net profit (after
amortisation of intangible assets recognised on acquisition) of £3.9 million
for the period from 13 January 2006 to 30 June 2006.  If the acquisition had
occurred at the beginning of the financial period, the group's pro forma
revenue and net profit for the six months ended 30 June 2006, would not be
materially different from that reported in the consolidated income statement.

16.  Acquisition of subsidiaries (continued)

Acquisition of Worksuite
On 31 January 2006, the group acquired from Severn Trent Systems Limited the
entire share capital of Worksuite Limited and the business and assets of UK
CIS, a division of Severn Trent Systems Limited.  On the same day, the group
also acquired the entire share capital of Worksuite LLC and the business and
assets of US CIS, a division of Computer Systems and Applications Inc.  The
companies acquired provide IT services with offices in the United States of
America and the United Kingdom. 

The provisional fair value of the identifiable assets and liabilities acquired
at the date of acquisition were:

                                       Carrying                 
                                        amount                  Provisional
                                  pre-acquisition                fair value
                                                                                       
                                          £'m                           £'m
                                                                                       
Net assets acquired:                                                                   
                                                                                       
Intangible assets                        0.9                             -             
                                                                                       
Property, plant and equipment            0.3                             -             
                                                                                       
Trade and other receivables              2.6                             2.3           
                                                                                       
Trade and other payables                 (3.4)                           (3.5)         
                                                                                       
                                         0.4                             (1.2)         
                                                                                       
Goodwill                                                                 2.9           
                                                                                       
Total consideration                                                      1.7           
                                                                                       
                                                                                       
                                                                                       
Total consideration comprised:                                                         
                                                                                       
Cash                                                                     1.6           
                                                                                       
Directly attributable costs                                              0.1           
                                                                                       
                                                                         1.7           
                                                                                       


The fair value adjustments contain some provisional amounts which will be
finalised in the 2006 annual financial statements.  The goodwill recognised of
£2.9 million is attributable to anticipated synergies and the value of the work
force.

Worksuite contributed revenues of £2.8 million and net loss of £0.8 million for
the period from 31 January 2006 to 30 June 2006.  If the acquisition had
occurred at the beginning of the financial period, the group's pro forma
revenue and net profit for the six months ended 30 June 2006, would not be
materially different from that reported in the consolidated income statement. 


17  Contingent liabilities

The group has contingent liabilities arising during the ordinary course of
business from which it is anticipated that no material loss will arise.


18.  Events after the balance sheet

On 21 August 2006, the company announced an offer to acquire the entire share
capital of WM-data, a leading Nordic IT services provider.  The WM-data board
of directors has unanimously recommended that WM-data shareholders and WM-data
convertible debenture holders accept the offer.  The offer values WM-data at
approximately SEK 11.9 billion (£882 million).

On 10 July 2006, the company bought the remaining Unilog shares through a
public offer process for the amount of €18.8 million (£13.0 million).


19.  Interim report

The interim report was approved by the board of directors on 30 August 2006 and
copies are available from LogicaCMG plc, Stephenson House, 75 Hampstead Road,
London NW1 2PL and LogicaCMG, Antareslaan11, 2132 JE Hoofddorp, the
Netherlands.

Euro translation of selected financial information (unaudited)

The group has presented a translation of the consolidated income statement,
balance sheet and cash flow statement into euros to assist users of the interim
financial statements more familiar with that currency.  The income statement
and cash flow statement in euros have been calculated by converting the
sterling figures to euros at an average rate of €1.46 to £1 (six months ended
30 June 2005: €1.46 to £1).  The balance sheet has been calculated by
converting the sterling figures to euros at the closing rate of €1.45 to £1 (31
December 2005: €1.46 to £1, 30 June 2005: €1.48 to £1).



Euro translation of condensed consolidated income statement
For the six months ended 30 June 2006

                                                                        Restated   
                                                      Six months      six months 
                                                           ended           ended  
                                                         30 June         30 June   
                                                            2006            2005
                                                                                      
                                                             €'m             €'m
                                                                                       
Revenue                                                    1,814.9        1,301.9      
                                                                                       
Net operating costs                                        (1,753.6)      (1,242.3)    
                                                                                       
Operating profit                                           61.3           59.6         
                                                                                       
Analysed as:                                                                           
                                                                                       
Operating profit before exceptional items                  95.8           59.6         
                                                                                       
Restructuring costs                                        (34.5)         -            
                                                                                       
Operating profit                                           61.3           59.6         
                                                                                       
Interest payable                                           (25.0)         (13.8)       
                                                                                       
Interest receivable                                        6.9            8.5          
                                                                                       
Share of post-tax losses from associates                   (0.1)          -            
                                                                                       
Profit before tax                                          43.1           54.3         
                                                                                       
Taxation                                                   (28.1)         (19.7)       
                                                                                       
Net profit for the period                                  15.0           34.6         
                                                                                       
                                                                                       
                                                                                       
Attributable to:                                                                       
                                                                                       
Equity holders of the parent                               11.4           33.1         
                                                                                       
Minority interests                                         3.6            1.5          
                                                                                       
                                                           15.0           34.6         
                                                                                       
                                                                                       
                                                                                       
Earnings per share                                            p / share     p / share *
                                                                                       
- Basic                                                    1.0            3.9          
                                                                                       
- Diluted                                                  1.0            3.7          
                                                                                       
                                                                                       
                                                                                       
Earnings per share from continuing operations                                          
                                                                                       
- Basic                                                    1.0            3.9          
                                                                                       
- Diluted                                                  1.0            3.7          
                                                                                       

* Restated for the bonus element of the rights issue that took place in
November 2005.


Euro translation of condensed consolidated balance sheet
30 June 2006

See page 15 for basis of translation.

                                                             Restated    Restated    
                                                 30 June  31 December     30 June   
                                                    2006        2005         2005
                                                                                       
                                                     €'m         €'m         €'m
                                                                                       
Non-current assets                                                                     
                                                                                       
Goodwill                                           1,190.9     562.7          565.7    
                                                                                       
Other intangible assets                            235.5       36.9           34.9     
                                                                                       
Property, plant and equipment                      156.5       149.7          153.6    
                                                                                       
Investments in joint ventures and associates       0.7         446.0          0.7      
                                                                                       
Other investments                                  13.6        13.3           12.4     
                                                                                       
Retirement benefit assets                          20.0        22.3           -        
                                                                                       
Deferred tax assets                                53.8        52.6           49.9     
                                                                                       
Total non-current assets                           1,671.0     1,283.5        817.2    
                                                                                       
                                                                                       
                                                                                       
Current assets                                                                         
                                                                                       
Inventories                                        5.5         3.5            4.1      
                                                                                       
Trade and other receivables                        1,334.3     946.4          993.8    
                                                                                       
Current tax assets                                 16.2        31.0           28.9     
                                                                                       
Cash and cash equivalents                          182.6       358.1          131.0    
                                                                                       
Total current assets                               1,538.6     1,339.0        1,157.8  
                                                                                       
                                                                                       
                                                                                       
Current liabilities                                                                    
                                                                                       
Convertible debt                                   (304.9)     (299.3)        (297.2)  
                                                                                       
Other borrowings                                   (33.2)      (27.0)         (67.9)   
                                                                                       
Trade and other payables                           (955.3)     (661.6)        (606.2)  
                                                                                       
Current tax liabilities                            (31.9)      (20.7)         (21.8)   
                                                                                       
Provisions                                         (26.1)      (9.8)          (13.6)   
                                                                                       
Total current liabilities                          (1,351.4)   (1,018.4)      (1,006.7)
                                                                                       
                                                                                       
                                                                                       
Net current assets                                 187.2       320.6          151.1    
                                                                                       
Total assets less current liabilities              1,858.2     1,604.1        968.3    
                                                                                       
                                                                                       
                                                                                       
Non-current liabilities                                                                
                                                                                       
Borrowings                                         (460.2)     (172.1)        (214.3)  
                                                                                       
Retirement benefit obligations                     (115.7)     (113.7)        (122.9)  
                                                                                       
Deferred tax liabilities                           (69.8)      (82.2)         (65.0)   
                                                                                       
Provisions                                         (17.6)      (12.1)         (11.7)   
                                                                                       
Other non-current liabilities                      (1.3)       (1.5)          (1.8)    
                                                                                       
Total non-current liabilities                      (664.6)     (381.6)        (415.7)  
                                                                                       
Net assets                                         1,193.6     1,222.5        552.6    
                                                                                       
                                                                                       
                                                                                       
Equity                                                                                 
                                                                                       
Share capital                                      166.5       167.3          111.1    
                                                                                       
Share premium account                              1,576.1     1,583.8        1,047.0  
                                                                                       
Other reserves                                     (583.5)     (553.8)        (628.7)  
                                                                                       
Total shareholders' equity                         1,159.1     1,197.3        529.4    
                                                                                       
Minority interests                                 34.5        25.2           23.2     
                                                                                       
Total equity                                       1,193.6     1,222.5        552.6    
                                                                                       



Euro translation of condensed consolidated cash flow statement
For the six months ended 30 June 2006

See page 15 for basis of translation.

                                                                         Restated     
                                                          Six months   Six months    
                                                               ended        ended     
                                                             30 June      30 June    
                                                                2006         2005
                                                                                      
                                                                €'m          €'m
                                                                                      
Cash flows from operating activities                                                  
                                                                                      
Net cash inflow from trading operations                        11.2         29.1      
                                                                                      
Cash outflow related to restructuring activities               (19.6)       (11.2)    
                                                                                      
Cash (used in)/generated from operations                       (8.4)        17.9      
                                                                                      
Interest paid                                                  (12.4)       (6.2)     
                                                                                      
Income tax paid                                                (15.0)       (12.4)    
                                                                                      
Net cash outflow from operating activities                     (35.8)       (0.7)     
                                                                                      
                                                                                      
                                                                                      
Cash flows from investing activities                                                  
                                                                                      
Interest received                                              4.2          0.9       
                                                                                      
Proceeds on disposal of property, plant and equipment          3.9          0.9       
                                                                                      
Purchases of property, plant and equipment                     (14.9)       (16.7)    
                                                                                      
Expenditure on intangible assets                               (12.8)       (3.8)     
                                                                                      
Acquisition of subsidiaries (net of cash acquired)             (306.4)      (51.7)    
                                                                                      
Disposal of business                                           -            (1.6)     
                                                                                      
Net cash outflow from investing activities                     (326.0)      (72.0)    
                                                                                      
                                                                                      
                                                                                      
Cash flows from financing activities                                                  
                                                                                      
Proceeds from issue of new shares                              1.3          0.1       
                                                                                      
Proceeds from bank borrowings                                  355.2        119.3     
                                                                                      
Repayments of bank borrowings                                  (111.4)      (13.3)    
                                                                                      
Repayments of finance lease principal                          (2.0)        (2.3)     
                                                                                      
Repayments of other borrowings                                 -            (17.2)    
                                                                                      
Dividends paid to the company's shareholders                   (52.8)       (37.7)    
                                                                                      
Dividends paid to minority interests                           (1.2)        (1.5)     
                                                                                      
Net cash inflow from financing activities                      189.1        47.4      
                                                                                      
                                                                                      
                                                                                      
Net decrease in cash and cash equivalents                      (172.7)      (25.3)    
                                                                                      
                                                                                      
                                                                                      
Cash and cash equivalents at the beginning of the period       358.1        150.3     
                                                                                      
Net decrease in cash and cash equivalents                      (172.7)      (25.3)    
                                                                                      
Effect of foreign exchange rates                               (2.8)        6.0       
                                                                                      
Cash and cash equivalents at the end of the period             182.6        131.0     
                                                                                      



Independent review report to LogicaCMG plc



Introduction

We have been instructed by the company to review the financial information for
the six months ended 30 June 2006 which comprises consolidated interim balance
sheet as at 30 June 2006 and the related consolidated interim statements of
income, cash flows and statement of total recognised income and expenses for
the six months then ended and related notes. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.

This interim report has been prepared in accordance with the International
Accounting Standard 34, 'Interim financial reporting'.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/
4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the disclosed accounting
policies have been applied. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit and therefore provides a lower level
of assurance. Accordingly we do not express an audit opinion on the financial
information. This report, including the conclusion, has been prepared for and
only for the company for the purpose of the Listing Rules of the Financial
Services Authority and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.




PricewaterhouseCoopers LLP
Chartered Accountants
London

30 August 2006

Notes:

(a) The maintenance and integrity of the LogicaCMG Plc web site is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the interim report
since it was initially presented on the web site.
   
(b)  Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions.