27 August 2010 | Lindsay Clark
Procurement outsourcing company Xchanging has said rumours that its finances lack strength are “baseless”.
The robust reassurance to investors from founder and chief executive David Andrews followed speculation in the stock market that had caused a 40 per cent fall in the firm’s share price over the past three months.
In a note on the fall in valuation, financial analysts Jefferies said, there were “seemingly misguided concerns about the company’s reported profitability”. Reassurance from the analysts brought the matter further into the open this week.
In a conference call with analysts that then followed later this week, Andrews said: “We are aware of a number of completely baseless rumours circulating in the market about Xchanging.”
He said he wanted to “address concerns” regarding “incorrect speculation”.
Earlier in the year, Xchanging announced two procurement outsourcing deals. Pallet and container pooling services firm CHEP awarded a five-year contract to manage £75 million annual spend. The deal includes non-core categories and a large proportion of procure-to-pay activities.
In April, defence electronics firm Selex Galileo outsourced indirect procurement to Xchanging in a three-year deal. Xchanging agreed to manage an annual spend of about £17 million of the company’s UK operations.