Xchanging share price plummets and David Andrews quits as results shock market
A dramatic share price slump, performance issues and a chief executive departure…sadly Xchanging is in familiar territory.
The business outsourcing group saw the value of its shares fall more than 22 per cent yesterday, after first-half results showed larger-than-expected losses from its procurement unit, as it announced boss Ken Lever’s resignation.
Revenue slumped 2.8 per cent to £199.4m and adjusted pre-tax profit fell 2.8 per cent to £17.1m, with the firm reporting a £47m impairment on the procurement business.
It echoes back to 2011, when Xchanging’s profit warning on the back of a misjudged acquisition caused shares to plummet by 50 per cent, as it announced the departure of founder David Andrews.
But Xchanging is in a better position now, according to City analysts. “This setback is not systemic and the company is today operationally stronger,” said David Brockton at Liberum. “93 per cent of the firm is performing well. Procurement provides only seven per cent of revenues, but the losses have widened, the scale of which shocked the market.”
Lever told City PM that the procurement challenges had “overshadowed progress” made in other parts of the business.