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Last year's results were as ugly as we had expected (see Xchanging ‘stabilised’ but still in ‘transition’). But the news at half-time suggests that perhaps the worst is over for UK business process services firm, Xchanging.
In what you could only call a full and frank disclosure – 37 pages – CEO Ken Lever detailed progress so far and outlined the path ahead. And it all seems sensible stuff. As ever, the truth is in the numbers, and they show an improving story. Headline revenues on continuing operations were essentially stable yoy at £323m, with organic growth (mainly currency adjusted) at almost 3%. Operating profit (IFRS) more than quadrupled to £14m, a 4.3% margin. And most importantly, Xchanging swung back into net profit, even after accounting for loss-making disposals.
My sense is that Lever now understands what is (and therefore what isn’t) Xchanging’s ‘knitting’ and is now rebuilding the company based on a far simpler and more focused pattern. Better chance of ending up with something that fits the market!
I shall leave it to my learned colleague, John O’Brien, to comment further when he returns from his well-earned vacation.
