Xchanging aims for fight-back in 2012

published 1 March 2012

Outsourcing firm Xchanging underlined unveiled better than expected profits for 2011.

The company, which provides back office functions like invoice payments and procurement and counts the London Metals Exchange and Gatwick Airport as clients, once traded above 300p per share but a couple of profit warnings and a board room reshuffle saw its shares slump to double-digit status last year, though 2012 has been much kinder to the share price.

Revenues for 2011 came in at £650m, below the consensus forecast of £671.5m but adjusted operating profit came in ahead at £43.2m versus £40.4m.

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Xchanging had to contend with a major contract loss last year, when BAE systems failed to renew its personnel agreement, although the firm continues to work for BAE in the US while French cosmetics giant L'Oreal signed on the dotted line in 2011.

Xchanging also managed to sell its US workers' compensation business and re-negotiate new banking facilities during the year.

Xchanging has suspended its dividend as it seeks to recover from the BAE loss which contributed, in part, to a 25% share price decline last year.

The Chief Executive, Ken Lever said Xchanging had been "stabilised" and was now on a "sound financial footing" but made clear that: "Our success in 2012 will be measured by the extent to which we turn new sales opportunities into contracts".

The shares had climbed 8.19% by 12:16.