Xansa profits hit by North America withdrawal

Profits in Xansa will be wiped out this year after the IT outsourcing company announced the closure of its North American operations at a cost of up to £26m.

Analysts had expected Xansa to make a pre-tax profit of about £26m but those will now disappear as the company takes a write-off of £21m, plus exceptional costs of up to £5m.

Xansa, which specialises in longer term outsourcing contracts, decided its North American business no longer fitted with its core business plans and will lay off 140 people as a result. The business was largely involved in one-off project work delivering business software against competitors such as the German software giant SAP.

Revenues from its North American business for the six months to 31 October were £11.9m with the operation breaking even. In the previous two years the business had been loss-making.

Alistair Cox, the Xansa chief executive, considered three options including selling the North American business or keeping it within the Xansa group but in the end decided to close it.

The North American move is the latest in a string of closures that Xansa has carried out to focus the company on its UK and Indian outsourcing operations.

A Xansa spokesman said the North American closure should be completed by May.