Xchanging sees drop in Q2 profits
Business processing provider, Xchanging, posted a 24 percent reduction in Q2 profits, but says that it remains on par to reach its end of year target.
Its net revenue for the first six months of 2014 fell to £205.1 million, compared with £270.7 million in 2013.
Business processing services net revenue totalled £142.1 million compared with £198.8 million in 2013, as a result of the Xchanging Transaction Bank (XTB) being divested in August 2013. XTB contributed revenue of £51.6 million and adjusted operating profit of £7 million in the first half 2013.
Net revenue for the technology sector in Q2 of 2014 reached £47.1 million compared with £49 million in 2013, while net revenue for procurement hit £15.9 million compared with £22.9 million.
Some of the company’s costs can be attributed to acquisitions, of which the group spent £7.2 million on during Q2.
“We acquired our joint venture partner's shares in Xchanging Italy through a put option exercise for £4 million. A further £2.6 million was paid as deferred consideration for the AR Enterprise business that we acquired in October 2012 and we made a £0.6 million investment in MachineShop,” said Xchanging in a statement.
Ken Lever, chief executive, said: "We continue to focus on technology and technology-enabled offerings which differentiate Xchanging in the market. We remain in line with expectations and on track to deliver our stated objective of maintaining operating profit in line with last year. The acquisition of Agencyport Europe and agreed acquisition of Total Objects will provide a marginal additional contribution to our profitability in 2014 and, more significantly, further enhance our positioning for a resumption of growth in revenues and profits in 2015 following the divestments and business exits which arose in 2013."
