Xansa chief warns off newcomers to Indian market

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.