XCH.L Regulatory News (XCH)

12 Nov 2008 07:00



12 November 2008

Xchanging plc Interim Management Statement

Xchanging plc, the fast-growing, international, pure play business processing company, is releasing an interim management statement on its unaudited results for the 10 months to 31 October 2008.

Financial performance update since the Half Year Report (30 June 2008)

For the four month period ended 31 October 2008, revenue growth has been slightly ahead of the Board's expectations. This is primarily attributable to procurement volumes in the Business Lines sector, increased transactional volumes in the Financial Markets sector and favourable foreign exchange movements.

Key operational highlights

In addition to the acquisition of Cambridge Solutions Limited (detailed below), there have been a number of other developments in the past four months including:

a new contract to upgrade the Insurers' Market Repository (IMR) that will see processing times halved, resilience of the platform improved and capacity for processing increased fivefold to cater for projected volumes over the next four years. To date, 99% of Lloyd's Managing Agents, 79% of Companies and 98% of Brokers operating in the London Insurance Market have signed up to the contract, and we continue to aim for full sign-up by the end of the year

a successful start to the implementation of the outsourcing contract with Cooper Gay which we announced in the Half Year Report

sales of our Genius insurance software to Ace and Torus , and our first Middle East sale to Gulf Re of our IRIS software product.

Acquisition

On 3 October 2008, we announced the proposed acquisition of 75% of the fully diluted share capital of Cambridge Solutions Limited ("Cambridge Solutions"), an international BPO and IT services provider listed and headquartered in India, with a global presence and approximately 4,500 employees.

The acquisition is consistent with our strategic objectives, delivering greater scale, broader international reach and a number of platforms for significant future growth.

A circular containing details of the acquisition and its financial effects on the Group was sent to Xchanging shareholders on 24 October 2008 and shareholder approval of the acquisition was granted at a general meeting held on 11 November 2008. We are continuing to work on the formalities of, and processes required by, the acquisition and, as stated in the circular, expect the acquisition to complete in Q2, 2009.

It is anticipated that David Andrews and Richard Houghton will join the board of Cambridge Solutions in the near future.

Board changes

Pat O'Driscoll was appointed to the board of Xchanging plc on 3 November 2008 as an independent Non-Executive Director. 

Looking ahead 

Overall, the financial outlook for the year and the financial position at the year end is expected to be in line with the Board's previous expectations.

David Andrews, CEO of Xchanging, said "We are pleased with our performance to date. Cambridge Solutions is an exciting addition to Xchanging. It is a perfect strategic fit. It complements Xchanging's strong Western European market position with US and Asia/Pacific scale, and turns Xchanging into a truly global business processor. Despite the difficult economic climate, we continue to trade in line with expectations. We expect current economic conditions to be broadly positive for the BPO market and we are confident in the outlook for the business".

About Xchanging

Xchanging is a fast-growing international, pure play business processing company with blue-chip customers. Xchanging provides complex industry specific processing to the banking and insurance industries and procurement, finance and accounting, and human resources services to customers across industries. 

www.xchanging.com