5 December 2003 Xansa, the UK-based business process and IT services company, has announced plans to withdraw from continental Europe.

CEO Alistair Cox said the company did not believe that the European marketplace was ready for large-scale outsourcing of IT and business processes that utilise Xansa’s Indian offshore model. The company will instead concentrate on winning contracts in the UK market, which he sees as more receptive to offshore outsourcing propositions.

The announcement reflects a major geographic retrenchment at Xansa, which had earlier announced an intention to quit the Asia/Pacific market as well, where revenues for the six months to the end of October declined by 56% to £1.1 million.

Across the whole group, revenues fell 2.9 per cent from £232.5m in the same period last year to £225.7m, while pre-tax profits dropped by 6.8 per cent to £13.8m. Cox blamed the tough economic climate and tight caps on spending among the company’s core clientele.

The downturn was not entirely unexpected. The company had earlier warned shareholders that turnover would be lower in the second half of this year. It was also hit with an exceptional charge of £12.5 million relating to a settlement with a customer over a services contract.

Cox said Xansa was would consider resuming business in continental Europe in two or three-years time, when the market was more developed.