Xchanging expects H1 losses to widen

16th Apr 2015 13:59

Business process services group Xchanging saw its shares go down on Thursday after warning that its procurement division will post a greater first-half loss than in 2014.The procurement business was hurt by an exit from its legacy contracts after a reduction of costs. However, Xchanging said that expects the division to return into profitability by the end of the year.On a more positive note, its technology and business processing services performed according to the group's expectations during the first quarter thanks to a high level of activity in the German stock market and "encouraging" sales growth.The company noted: "Although there will be a heavier second half weighting this year due to the procurement business performance, our outlook for the year as a whole remains unchanged."Shore Capital said Xchanging's procurement performance is a "frustration".The broker retained the 'buy' recommendation and added: "We expect cash generation to continue to strengthen through the current year, weighted to the second half and for the group trading performance to continue to improve in all areas. We believe that the long term outlook remains positive."Shares fell 3.22% to 127.75p on Thursday at 14:06.