Interim Management Statement

6 November 2014

Xchanging plc

Interim Management Statement

Xchanging plc ('Xchanging') today issues its Interim Management Statement for the period from 1 July 2014 to date. There is no change to the expected trading outcome for the full year.

Current trading

In our preliminary results in February 2014 and in our half year 2014 results in July 2014, we referred to our twin objectives for this year: to maintain adjusted operating profit at the same level as in 2013; and to position the business for a return to revenue and profit growth in 2015. This is despite starting the year with the challenge of making up the ground from businesses we chose to exit in 2013. We continue to make satisfactory progress towards achieving these objectives.

Interest in our Xuber range of insurance software products remains strong and we continue to progress a number of opportunities in the pipeline. However contract closures are taking time to secure.

Our Procurement business, now re-focused around our MM4 technology platform, continues to make progress under its new leadership. We are investing in building our international customer base, and, where we find appropriate opportunities, will look to make small bolt-on technology acquisitions. The business has seen significant sales success in the second half of the year as we transition toward technology-enabled services such as Tail-end Spend Management* and Procurement as a Service (PaaS).

Within Business Processing Services, both Insurance Services and Financial Services continue to perform well, offsetting much of the impact of the disposal of the Xchanging Transaction Bank business last year.

We await the outcome of the re-tender for the Australian State of New South Wales's Workers' Compensation contract. The outcome is now expected later this month.

Netsett formal launch

In September we saw the formal launch of our insurance accounting and net settlement service, Netsett, following an earlier successful pilot with the insurance company RSA. We also announced that Willis, Cooper Gay Swett & Crawford (CGSC), and Ruschlikon UK members, ACE, XL Group and Generali, will participate in pilots of the Netsett platform to demonstrate the value of using the net settlement technology.

Acquisitions review

On 1 October 2014 we reported that the Competition & Markets Authority ("CMA") was to conduct a review process of our Agencyport Europe Limited ("Agencyport") acquisition, completed and announced on 4 July 2014. We were required to put any further integration, which had been well advanced, on hold pending the review's outcome.

Considerable Xuber management time has since been taken up responding to information requests about the Agencyport acquisition and enlarged Xuber business. The CMA is now expected to report back to us regarding this acquisition in December, as well as reporting the results of their review of the Total Objects acquisition (announced 3 July 2014, and subject to CMA clearance).

Financial position

The Group's financial position remains sound.

Investor Seminar

Xchanging is to hold a short Investor Seminar on Thursday 27 November 2014 at its London office. The seminar will look at Xchanging's Procurement and Technology Applications Management Services businesses. Materials will be posted on Xchanging's website after the event.

Full Year Results

Xchanging intends to announce its full year 2014 results on Thursday 26 February 2015.

Enquiries

Xchanging plc Tel: +44 (0) 203 604 6999

David Bauernfeind, Chief Financial Officer

Alexandra Hockenhull, Director of Corporate Communications

and Investor Relations

Maitland Tel: +44 (0) 207 379 5151

Peter Ogden

Martin Barrow

Emma Burdett

www.xchanging.com

@XchangingGroup

Linkedin/company/xchanging

*Editors' Note

The 'tail-end' of a procurement department's spend refers to the 20% of non-core transactions that typically go unmanaged by strategic sourcing endeavours. They go unmanaged because the 20% 'tail' is typically made up of a large number of 'one-off' or low volume items from multiple suppliers that are difficult to source cost-effectively if in-house resources and processes are limited.

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. In particular, any statements regarding Xchanging's strategy, dividend policy and other future events or prospects are forward-looking statements.  Undue reliance should not be placed on any such statements because they speak only as at the date of this announcement 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.

These forward-looking statements are not guarantees of future performance and there are a number of factors (many of which are outside of Xchanging's control) which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among these factors 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.

Save for those forward-looking statements required by the Listing Rules, the Disclosure and Transparency Rules and/or the Prospectus Rules, Xchanging undertakes no obligation to update these forward-looking statements, and will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this announcements. Xchanging therefore will comply with its obligations to publish updated information as required by law or by any regulatory authority but assumes no further obligation to publish any additional information.