Xansa sees returns on cost cuts

The Accountancy Age/ADVFN Index-listed company, which provides consulting services on business and technology, is set to produce preliminary results on 25 June that fall in line with management expectations.

Since a trading update in May the company has seen its share price soar from less than 80p to nearly 110p.

The appointment of Peter Gill as chief financial officer of the IT services company now seems to have been a wise choice. The strategy of the company in the second half of the financial year has been about streamlining its operations, which it has done with some success.

Gill would have played a significant part in ensuring costs were cut without seriously affecting the operation of the company. This is not to say that Xansa has been unable to pick up new custom in the meantime.

It recently announced that it had acquired the accounting and finance contract for mmO2 and a new 10-year contract with the Royal Mail. Earlier this month, it also revealed a deal with BT worth at least £250m over seven years, which included the transfer of 570 employees to Xansa.

The results should send chairman Hilary Cropper off on a high. The woman responsible for hiring Gill and new chief executive Alistair Cox in a major boardroom reshuffle is to resign in September because of ill health.

Despite the promising results, the company has warned that things will be just as tough for the foreseeable future. ‘We are not expecting a marked upturn in demand during our financial year 2003-04,’ said Cox.

‘We’re addressing this environment through our streamlining programme while continuing to position the company for future growth by investing in such areas as India.’

If the company continues to handle its finances sensibly, while picking up more big contracts then it should continue to see its share price climb.

Email: paul_grant@vnu.co.uk – For breaking business news, results updates, ‘live’ share prices and to sign up for business newswires, go to www.accountancyage.com/business.

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