14th Nov 2014 08:09
LONDON (Alliance News) - Xchanging PLC shares were down in early trade on Friday after the company said it will run off its Workers' Compensation contract with the New South Wales government in Australia next year and would take a charge in its full year results on the back of the investment made in its Xuber insurance software.
The company said it has been handling around 5% of the Workers' Compensation portfolio for New South Wales since 2010 under a contract due to expire this year. Earlier in the year, the government invited renewal bids as part of a plan to cut the number of suppliers from the start of the new contracts in January.
Xchanging's bid was supported by an investment in a new module of the Xuber insurance software and the company said a reassessment of the carrying value of that investment means it will take a write-off of around GBP5 million in the current financial year.
"We are naturally disappointed not to have received an award of a new contract with New South Wales, particularly as we are of the view that Xuber provides the most appropriate technology platform," said Xchanging Chief Executive Ken Lever.
"The loss of this business does not affect our commitment to the workers' compensation business in Australia, which we will continue to develop, supported by the Xuber technology investment," Lever added.
Xchanging shares were down 4.4% to 168.75 pence in early trade to be among the worst performers in the FTSE All Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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