Investors in Logica shares have had much to grumble about over the past year or so as delayed contracts and missed targets conspired to hammer the IT services group’s share price.

However, long-suffering shareholders had a reason to be cheerful yesterday, as first-half results from the company confirmed it was finally moving in the right direction.

Andy Green, the former BT high-flyer who became the group’s new chief executive in January, was not only able to assure the market that his £110 million restructuring plan to revive the business was on track, but also raised full-year revenue growth guidance to 4 per cent, up from 3 per cent. In April Mr Green unveiled his revival strategy, which included cutting 1,300 jobs, 500 in Britain, and a doubling of its offshore operations.

During the first six months of the year sales rose 6 per cent and although it anticipates some weakness in its financial services and consumer driven sectors, it believes this will be largely offset by more robust government spending on IT. Management also pointed to the buoyant energy and utility groups as an area of opportunity. In the first half, Logica won deals with the Finnish State Treasury, the Dutch immigration department, and a big contract to provide services to Michelin, the tyremaker. Analysts welcomed the company’s balanced, but overall positive update, noting that Logica’s industry spread was proving beneficial against the worsening wider economic backdrop. Its shares led the second string, rising 15¼p to 127¾p.

Overall the FTSE 100 advanced 48.8 points to 5,497.4, driven by a resurgent mining sector, which tracked higher metal prices. Antofa-gasta led the blue chip risers, up 25½p to 563½p, Kazakhmys rose 57p to £12.62, and Anglo American gained 132p to £29.23, with Merrill Lynch saying miners were oversold.

But it was another bad day for the banks as the City speculated there may be more bad news to come. Barclays, down 5p to 346½p, was among the worst hit after analysts at Goldman Sachs said it may need to write down another £1.5 billion over the next 18 months, adding that it has little room to absorb further material losses without the dividend being cut or paid in shares. Cazenove downgraded the stock to “in line” from “out-perform”, citing share price underperformance and noting a weak economic outlook. HBOS fell 1¾p to 305¼p, but Royal Bank of Scotland put on ½p to 230¼p after Goldman lifted its target price on the stock.

Serco climbed 13¼p to 432½p after Collins Stewart raised its recommendation to a “buy” before the outsourcer’s first-half results later this month. The broker said that since the company’s failure to win the Sellafield nuclear decommissioning contract, shares had underperformed and even without Sellafield it had still signed contracts worth upwards of £1 billion in 2008.

A trading update from Bellway, down 16½p to 560p, hit the housebuilders, after the company said reservations were down 45 per cent. Taylor Wimpey lost 5¾p to 48p, Barratt Developments fell 10¾p to 124¾p and Persimmon was 15p lower at 343¾p.

- New York: Shares rose as investors showed an appetite for battered financial stocks and Wal-Mart announced a big jump in quarterly profits. The Dow Jones industrial average closed at 11,615.90 points, up 83.00.

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