Media centre

Preliminary results announcement for the year ended 30 April 2006

29 June 2006

Xansa, the outsourcing and technology company, is pleased to announce its results for the full year ended 30 April 2006.

Business Highlights

Revenue has returned to growth in the second half of the year
Public sector revenues up almost 50% year on year to £66.8 million
Full year underlying margins* increased to 6.5% (FY 2005: 5.4%)
All contract renewals successfully completed
Strong new client list including Renault Formula 1, Northern Ireland Water Service, Littlewoods and Peterborough City Council
India workforce increased by 39% to 3,920 people, for the first time representing over half of the total workforce
100 trusts are now live with NHS Shared Business Services with a further 16 lined up

Summary	FY 2006 £ million	FY 2005 £ million	Change %
Revenue	357.3	376.4	(5)
Underlying operating profit*	23.3	20.2	15
Underlying operating margin*	6.5%	5.4%
Underlying profit before tax**	13.3	12.5	6
Profit before tax	9.0	15.5	(42)

Turnover decreased 5% to £357.3 million (2005: £376.4 million)
Underlying operating profit* increased 15% to £23.3 million (2005: £20.2 million)
Underlying operating margin* increased to 6.5% (2005: 5.4%)
Underlying pre-tax profit** increased 6% to £13.3 million (2005: £12.5 million)
Exceptional charges for vacant property of £4.3 million
Diluted adjusted earnings per share* increased by 13% to 4.29 pence (2005: 3.79 pence)
Dividend per share has been proposed at 3.24 pence (2005: 3.24 pence) for the year

* Before exceptional charges, pension settlements and curtailments, share based payments, but including share of joint venture losses after tax
** Before exceptional charges and pension settlements and curtailments.

Bill Alexander, Chairman, Xansa commented:

"This year has seen us building on the progress which we began in 2005. Our business model of integrated UK-India delivery and strategic investment is beginning to show results. This progress is illustrated in a number of areas. Firstly we have grown profits and margins and returned to revenue growth in the second half of the year. We have also continued to see rapid expansion in our India operations. India has expanded by 39% and over half of our people are now working in India. The other key area is the continued strong progress in our public sector business which has grown by 48%. This year has also seen our client base grow strongly. We have seen consortia becoming more prevalent in both the public and private sector and Xansa has successfully lead and participated in such verticals. This shows that we not only work closely with our clients but can also form strategic alliances with best-of-breed partners to ensure that our clients are able to do more with their businesses."

Commenting on the results, Alistair Cox, Chief Executive, Xansa said:

"Margins are up as expected year on year and we have seen a return to revenue growth in the second half of the year. This important turning point means that the volume of new work we are now undertaking outweighs the dilutive effect of moving previously onshore delivered work to our offshore delivery centres in India. Of our revenue, over half of is derived from clients who we have worked with for over five years. We have successfully extended 100% of those contracts due for re-tender, totalling 25 such renewals over the last 2 years. At the same time we have a strong new client list with 16 new clients signed in the year.

All our attention is now focused on continuing this revenue and margin momentum and our strategy and goals remain unchanged: growing our business in the UK market in both the public and private sectors; delivering client solutions that benefit from the convergence of IT and BPO; and leveraging our integrated onshore and offshore capabilities.

In summary, our strategy is paying off: execution is on track and we are encouraged by our progress in growing our company."

PDF icon Download full press release in PDF format