Competitors trying to expand into Xansa's territory in India will find themselves 'embarking on a journey of discovery', the outsourcing company's chief executive has warned at the same time as it announced strong first half results.

Alistair Cox, Xansa’s chief executive, dismissed the threat of Indian rivals strengthening their UK operations and said that although foreign entrants could prove tough competitors, the costs of employing UK staff would put off new entrants to the market.

'It’s taken us four or five years to get it right, welcome to the marketplace is what I say,' he said.

Cox's comments come in the wake of a deal by Tata Consultancy Services, India’s largest outsourcer, to employ 900 employees of Pearl Assurance in an attempt to build up a back-office business in the UK for the life and pensions industry.

Half of Xansa's workforce is in the UK and half in India. Cox said the company would have about 60% of its workers offshore in 18 months’ time.

The groups reported first-half results with profit margins to 7.2% in the six months to the end of October, from 5.6% in the same period last year. However, turnover fell from £189.5m to £175.9m in the period, as more work was delivered from India, for which Xansa charges less.

The forward order book was little changed from last year at £450m, but Cox added that forward orders would begin to improve in the second half. Operating profits increased from £9.2m to £11.1m.