Xchanging predicts a challenging 2011

10 February 2011
Xchanging bags contract with CHEP
Selex Galileo does third party indirects deal

Xchanging assures investors of its financial health

Recruiter outsources indirect procurement
Income boost at Xchanging

10 February 2011 | Angeline Albert 

Procurement outsourcing business Xchanging yesterday announced that CEO David Andrews has stepped down and it is also forecasting lower-than-expected profits this year.

In a trading update, Xchanging informed the London Stock Exchange that Andrews, who founded the company in 1999, will take on a new role as senior adviser to the chairman. Meanwhile, the company’s finance director Ken Lever has been appointed as acting CEO until a new chief executive is found.

In the same update, the company forecast lower profits for 2011 as a result of winning fewer new contracts. The update said: “It is anticipated that 2011 underlying operating profit will be below the lower end of the current range of analysts’ estimates for 2011 of £55.5 million-£80.2 million. The expected reduction in operating profit in 2011, compared to 2010, will be primarily due to the absence of the contract settlements and consulting income which benefited 2010 results.”

The company, which employs 8,000 people, added that “actions are being taken to mitigate the impact on operating profits in 2011 which include restructuring and cost reduction initiatives”.

Xchanging chairman, Nigel Rich said: “2011 will be a year of transition for Xchanging as we re-align the cost base and focus on revenue growth to deliver sustainable profit for shareholders.”

The company will announce its full financial results for the year to 31 December 2010 on 1 March. 

Last April, Xchanging announced it had won 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 procure-to-pay activities. And 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.

The company sponsors the Oxford and Cambridge boat race which has been renamed the Xchanging boat race.

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