XCH.L Regulatory News (XCH)

9 November 2012

Xchanging plc

Interim Management Statement

Xchanging plc ('Xchanging'), the business process, procurement and technology services provider and integrator, today issues its Interim Management Statement covering the period from 1 July 2012 to date.

Current Trading and Outlook

Trading since the half year results has been in line with management plans and we remain on track to deliver our expectations for full year financial performance. Xchanging retains a healthy financial position with a strong balance sheet.

The Procurement business has now started to recognise our share of the savings on the European L'Oréal and North American BAE Systems contracts, following completion of the initial implementation effort.

We have also continued to make progress building the foundations for future growth, winning contracts with new as well as existing customers.

Commenting on today's announcement, Ken Lever, Chief Executive, said: "The period since our half year results has seen further positive developments. We have won a number of contracts and launched two new products. We have also achieved a satisfactory strategic resolution for our formerly loss-making business Kedrios. We still have much to achieve, but this evidence of progress is very encouraging."

New Business

During the period we won a £65.5 million five year follow-on contract to continue providing the Insurers' Market Repository. Previously an annual contract, the new arrangement provides greater earnings visibility and confirms the strength of our relationship with the London insurance market as we invest in new technology to continue developing this key piece of London market infrastructure. Yesterday, we announced further that Xchanging has been awarded a contract by Lloyd's to build the platform for the Lloyd's Claims Reporting Suite ("CRS"). The CRS will provide Lloyd's and managing agents with a set of online dashboards carrying claims management information.

In September we won a further technology contract with Gatwick airport. Building on this strong customer relationship the additional contract is for four years and covers the provision of telephony services.

In Procurement we have won a three year contract with Grupo Panrico S.A., one of Spain's leading bakery companies. This builds on our Spanish procurement presence, following our entry into this market with the 2011 L'Oréal contract win.

New Product Launches

In September we launched a pilot scheme for our new settlement services offering, Netsett. Modelled on a service already provided to the London insurance market, Netsett is designed to provide net settlement services to the global insurance market using Accord messaging standards, in partnership with Deutsche Bank as settlement bank.

In October we launched our redeveloped suite of insurance software products under the business name "Xuber". Xuber addresses all segments of the Property & Casualty insurance market and forms the core of the insurance offering we are taking to the US market.

Strategic Development

Yesterday, Thursday 8 November, we announced that Xchanging's Italian subsidiary, Kedrios S.p.A. ("Kedrios"), acquired 100% of AR Enterprise S.r.l. ("AR"). The acquisition has enabled us to address Kedrios' long term weak strategic position in its market and accelerate financial improvement, creating a profitable company with a significant market position and greatly improved growth potential based on leading technology. As well as resolving a strategic issue, the acquisition now means Xchanging no longer has any loss-making businesses.

Board Changes

We have appointed two additional Non-executive Directors to the Board during the period: Saurabh Srivastava in late August, and more recently Ian Cormack in October. Saurabh brings further technology experience to the Board and Ian has a strong background in Insurance and Banking. Dennis Millard stood down from the Board and its committees in early September. At the same time, Saurabh joined the Audit Committee in place of Michel Paulin, who joined the Remuneration Committee. Ian Cormack has assumed the role of Senior Independent Director, given Dennis Millard's retirement from the Board.

Enquiries

Xchanging plc Tel: +44 (0) 207 780 6999

David Bauernfeind, Chief Financial Officer

Alexandra Hockenhull, Head of Corporate Communications

and Investor Relations

Maitland Tel: +44 (0) 207 379 5151

Neil Bennett

George Hudson

Emma Burdett

Xchanging

What we are 

Xchanging provides business processing, technology and procurement services internationally for customers across multiple industries.

What we do

Xchanging brings innovation, thought leadership and passion to its customers' businesses so as to enhance performance and value. Our values are embedded into everything we do.

What we want to be

Xchanging wants to be regarded as the best provider in its chosen markets by delivering services that are recognised for outstanding quality, reliability and innovation.

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.