Xchanging seeing the openings in downturn

Xchanging, which runs back-office activities such as invoice processing, paying staff and procuring office supplies, said yesterday its operating cashflow was ahead of its expectations after implementing a series of cost-cutting measures since March in what it has described as a year of transition.

“In our view, steady progress continues to be made by management simplifying and de-risking the business,” Espirito Santo Investment Bank analyst David Brockton said.

Chief executive Ken Lever said the outsourcing market was faring quite well, adding the economic downturn was providing opportunities for companies like Xchanging, which won contracts with French cosmetics maker L’Oreal and a seven-year US procurement outsourcing contract with BAE Systems during the period.

“Growth in the developed economies is hard to come by for companies so they are looking at ways of taking costs out and where businesses are trying to take costs out, that always provides opportunities for people like ourselves,” he said.

Mr Lever said Britain’s attempt to eliminate its budget deficit offered Xchanging opportunities to provide outsourcing services to the public sector.

“I do not think there’s any question there are lots of growth opportunities out there – it’s a question of us making sure that we see those opportunities.”