XCH.L Regulatory News (XCH)

Xchanging plc

Interim Management Statement

Xchanging plc, the global business processing company, today issues its interim management statement covering the period from 1 July 2010.

Current trading and outlook

We continue to see pressure on activity levels due to economic conditions and some customers remain cautious in this uncertain market.

We remain on track to deliver the savings we identified for 2010, including the restructuring of the UK and Continental Europe businesses. We are selectively dedicating additional resources to ensure that we take advantage of sales opportunities. Our international reach and broad customer base continue to support profitable growth in the business.

For the full year, revenues and profits are in line with current market expectations. The financial position of the group remains robust. The net cash position at the end of the third quarter was slightly ahead of the comparable position at the end of the half year.

Overview of the regions

In the UK, we recently signed a five-year contract to provide Network Management Services to Gatwick Airport Limited. Xchanging will provide a comprehensive and flexible managed network service to meet the current and future needs of the Airport. This is a milestone for Xchanging as we extend into the public services arena in the UK.

In July, we signed a two year outsourcing contract with Saudi Development and Training Company (SDT) to manage procurement of a diverse portfolio of Learning and Development courses in the UK and Saudi Arabia on behalf of SDT. The LME went live with the world's first global steel contract and Xchanging supported the LME in delivering system changes to make this happen. In addition, we integrated all systems (including real-time trade matching) with the London Clearing House's new clearing system, Synapse.

Our processing business in the Americas region has seen renewals with a total contract value of US$25.6 million (c. £16.7 million). We have refreshed our warranty claims processing value proposition which has generated strong interest and we are leveraging our Lean Six Sigma process methodology, which has been well received. Quality performance against our internal benchmarks has shown sustained performance improvements month on month.

In Continental Europe, on 31 July 2010, we signed an Enterprise Partnership agreement with SIA-SSB to develop securities processing and fund administration services in the Italian market. Subsequently, Xchanging signed an agreement with CAD IT to enhance Xchanging's financial services processing platforms. CAD IT will provide software and related services to support Xchanging's securities and fund administration processing platforms for the European financial markets.

We continue to be a key player in the consolidation of the investment account processing market in Germany. On 15 August, Xchanging successfully completed the migration of the VERITAS accounts (contract signed in April) onto its platform on time and within budget, underpinning our migration competence.

In Asia Pacific, we have continued to invest to develop a pipeline of opportunities across insurance, funds administration, banking and procurement services. In India, we signed a contract to upgrade the Host Trading Platform and TESA (Xchanging's proprietary trade software) at the Dhaka Stock Exchange, the premier stock exchange of Bangladesh. We continue to leverage our current banking relationships with over 90 banks to deliver technology and business process driven solutions which meet their needs around evolving global banking requirements.

Board changes

On 17 September 2010, we announced that Ken Lever would be appointed to the Board on 5 October 2010 as Chief Financial Officer (CFO). Ken replaced Richard Houghton who announced on 15 July his intention to step down as Director and to leave the Company. Ken has gained extensive experience in previous roles such as CFO and Senior Vice President at Numonyx B.V., the Swiss-based technology company, CFO of Tomkins plc and Finance Director at Albright & Wilson plc. He has now completed the transition to his new role.

01 November 2010

David Andrews and Ken Lever will host a conference call for analysts and investors to discuss this interim management statement at 08:30 BST on Monday, 01 November 2010. The conference call telephone number is +44 (0)20 7162 0025 conference ID 879442. For individuals unable to participate in the conference call, a telephone replay will be available until Monday, 08 November 2010. Please telephone +44 (0)20 7031 4064 (conference ID 879442).

About Xchanging

Xchanging is one of the largest and fastest growing business processors. With a wide range of multinational customers in 42 countries and employing over 8,000 people, we are a truly global company. Our aim is simply to provide business processing services better, cheaper and faster.

Xchanging provides procurement, accounting, human resources and technology services across industries. These include banking, insurance, manufacturing, retail and real estate among others. We combine functional expertise with deep industry domain knowledge to provide industry-specific outcomes for our customers.

Listed on the London Stock Exchange in 2007, the company is in the FTSE250, the index of mid-capitalised companies traded on the London Stock Exchange. Xchanging is also a member of the FTSE4Good index which measures the performance of companies that meet globally recognised corporate responsibility standards. www.xchanging.com

Cautionary Statement: 

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Xchanging's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approval or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.