23rd Oct 2009 12:00
Xchanging plc
Interim Management Statement
Xchanging plc, the global business processing company, today issues its interim management statement covering the period from 30 June 2009 to date.
Current trading and outlook
Market conditions remain challenging as our global customers adjust to the downturn in business activity. Against this backdrop, however, the Group continues to see new opportunities as customers seek to reduce costs and investment. The business is performing in line with expectations, with the exception of the Cambridge IT business where customers have continued to defer discretionary spend. The weakness seen in IT services is expected to be offset by growth in the rest of the business, which is slightly ahead of that seen in the first half of the year. Volumes in the German banking sector have stabilised but remain subdued. It is expected that earnings for the year will be in line with the market's expectations. We continue the active management of our cost base and the Group's financial position remains strong.
We are on track to complete the Cambridge integration by the end of 2009 as planned and in line with the integration budget disclosed in our half year results. We have started to see the benefits of the international reach afforded to us by Cambridge and we are confident that our global platform and broad customer base will continue to support profitable growth.
In the UK, we have started the implementation and roll out of Xchanging's new .NET Insurance Application Platform (XIAP) for QBE Europe. This is part of a contract signed in the first half of the year. Transition of the Aon Benfield contract is progressing in line with plan and we are working with Aon to move into the second and third phases of work around systems migration and operational consolidation.
In the Asia Pacific region, we have signed a new five year contract with WorkCover New South Wales. The estimated contract value is approximately AU$90 million to 100 million over the life of the contract. We have also accepted an offer from WorkSave Victoria to extend our contract with them for an additional 12 months. The annual contract value is approximately AU$29 million.
In Continental Europe, the integration of the FondsServiceBank (FSB), the investment funds administration business of DAB bank AG, is on track.
In the Americas, we have seen continued strong performance on renewals in the claims business, although some smaller local customers have been lost in areas where we exited offices.
In Global Procurement, National Australia Group Europe (NAGE) has agreed a four-year contract commencing in October 2009 to increase the potential level of addressable spend managed by Xchanging by up to £100 million per year. Xchanging will continue to offer a full suite of Sourcing and Procure to Pay services to NAGE, which it has done since July 2006 when NAGE first became a customer.
23 October 2009
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Enquiries |
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Xchanging plc |
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David Andrews, Chief Executive Officer |
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Richard Houghton, Chief Financial Officer |
Tel: +44 (0) 20 7780 6999 |
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Cardew Group |
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Rupert Pittman |
Tel: +44 (0) 20 7930 0777 |
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David Roach |
David Andrews and Richard Houghton will host a conference call for analysts and investors to discuss this interim management statement at 13:00 BST on Friday, 23 October 2009. The conference call telephone number is +44 (0)20 7162 0025, conference ID 849359. For individuals unable to participate in the conference call, a telephone replay will be available until Friday, 30 October 2009. Please telephone +44 (0)20 7031 4064 (conference ID 849359).
Xchanging's 2009 annual results will be released on 01 March 2010.
About Xchanging
Xchanging is a global business processor with blue chip customers. We deliver procurement, HR, technology and mission-critical industry-specific processing services to customers in 42 countries. 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.
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