India HQ’d business process services (BPS) provider WNS has seen its largest UK market decline 7% in FY15/16 to $234m (net revenue) as a result of recent delays from its largest insurance customer Aviva (see here and work back). Revenue from WNS’ largest customers declined 14% in the year overall.
In the investor call, WNS’ CEO Keshav Murugesh said that even though there had been delays, WNS has recently won some new contracts with Aviva, and ‘the bigger opportunity is still out there’, which is likely in relation to the recent acquisition of Friends Life (see here).
While there remains uncertainty in the UK, the rest of the business continues to perform well, driven by double-digit growth in all other geographies, including the second largest market North America, which was up 12% to $155m.
In total, WNS achieved FY organic growth in constant currency of 11% to $531m (net revenue), and up 5.6% at the reported level. Adjusted net income margins also nudged up a point to 19.4% vs. 18.3%. It’s expected to remain stable at this level in the current year too. Meanwhile, there’s quite a spread with revenue expectations – reflecting some of this uncertainty with top clients – of between 8% and 14% (ccy).
The current year will also have more inorganic growth following last month’s $17.5m acquisition of India-based Value Edge Research Services, which provides commercial research and analytics services to clients in the pharmaceutical sector. Meanwhile, WNS is moving faster than some of its peers into disruptor areas like robotic process automation (RPA), which should ensure it keeps the momentum going through 2016 (see Business Process Automation – opportunities in the Robotic Revolution).