COMPUTER services group Sema, which is being bought by Franco-American firm Schlumberger, has reported "disappointing" results with profits down four per cent.

Sema, which this week recommended a £3.6bn bid from the oilfield services group, said pre-tax profits for the year to December 31, stripping out goodwill, fell from £96.1m to £91.9m. The figures include five months contribution from LHS, the US telecoms software business it bought last year, which generated a loss of £8m.

Problems relating to integrating LHS triggered a profit warning in November, followed by a disappointing trading statement in January.

Sema said it had been hit by tough trading conditions in the IT industry since January 2000, both in hardware and services, which resulted in profit shortfalls for many companies.

In the wake of Y2K and the dotcom bubble many IT customers delayed placing major new contracts until the end of the year, it said.

Chairman Sir Julian Oswald said the results were "disappointing", but the "strategic direction of Sema remains sound".

To improve Sema's performance, the group had begun several action plans, merging its team with LHS's, and had refocused its research and development.