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Xansa PLC (XAN)

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Monday 22 November, 2004

Xansa PLC

Re Joint Venture

Xansa PLC
22 November 2004

Press Release

22 November 2004

                          FOR THE PROVISION OF FINANCE

Xansa, the international business process and IT services company, announces
today that contracts have now been completed for the establishment of a 50:50
Joint Venture (JV) with the Department of Health (DH) to provide Finance and
Accounting services to NHS organisations.  This final stage of the signing of
the JV follows the recommendation of Xansa as preferred supplier announced on 4
October 2004.

This public private partnership will offer NHS organisations the benefits of
guaranteed cost savings, reduced capital expenditure and 'best in class'
services, whilst enabling some £224m to be reinvested into front line patient
care.  The JV is seen by the DH as a key component of its response to the recent
Efficiency Review by Sir Peter Gershon.

The JV will be based around the DH's existing Shared Financial Service Centres
(SFSC) in Leeds and Bristol, which currently provide services to 36 of the 663
NHS organisations and DH agencies.  It will seek to expand both the number of
NHS organisations it serves, and also the range of finance and associated HR
services offered.

The market for the provision of these existing Finance & Accounting (F&A)
services within the NHS is estimated to be in excess of £1 billion over the next
ten years, potentially delivering revenues to the JV of around £500 million over
the same initial period.

Current SFSC services include; providing support for purchasing and payment of
goods, processing of orders and payments for services provided externally,
banking operations and cash management, together with the production of
financial management reports.

Around 230 SFSC staff will transfer to Xansa's employment group to allow them to
benefit from Xansa's full package of employment benefits including awarding
winning share ownership schemes.

A combined team has now begun preparing for the formation of the Joint Venture,
which is expected to run in perpetuity, and is planned to begin on 1 April 2005.

Commenting on the announcement, Health Minister John Hutton said:

"Moving ahead in this way will help the NHS streamline back office functions,
reduce bureaucracy and generate substantial savings for reinvestment in
frontline services.

"The joint venture will generate significant cost savings - enough to pay the
annual salaries of over 3,000 GPs or 12,000 nurses.

"By entering into this partnership, we are utilising private sector experience
to both improve and expand the range of corporate functions provided for the
NHS.  It's good news for the NHS and for taxpayers."

Commenting on the announcement, Alistair Cox, Chief Executive Xansa said,

"I am delighted that we have now agreed contractual terms with the Department of
Health and can move forward at full speed to put in place the Joint Venture.
Xansa's business is based around delivering innovative and expert services to
our clients that allows them to focus on their core priorities, confident in the
knowledge that our specialists are delivering their support services.

"This partnership is a perfect example of how our leadership in providing
Finance & Accounting services frees up significant cost savings for the
Department of Health to deploy for example in providing more doctors and nurses.

"I am proud that the Government has put its trust in Xansa.  That is testament
that our strategy of focusing on large complex back office process management,
and the Government sector in particular, is paying off.  I look forward to
welcoming the new members of Xansa next year in what is for all of us a very
exciting venture and the forerunner of other innovative deals."



Steve Stratton                                Matthew Ward
Investor Relations Director, Xansa            Press Office, Department of Health
Tel : + 44 (0)8702 416181                     Tel : +44 (0)20 7210 5222
Email :

Giles Sanderson, James Melville-Ross
Financial Dynamics
Tel : + 44 (0)20 7831 3113

About Department of Health

A full description of the DH, including its aims, objectives and major
initiatives can be found at

About Xansa

Xansa is an international business process and IT services company creating and
delivering process and technology solutions that significantly improve its
clients' business performance. Through strong relationships, commercial
innovation and its integrated delivery capability, Xansa drives real and
long-term cost reductions, performance improvements and new ways of working
tailored to each client. Its services are Business and Technology Consulting, IT
Implementation, IT Outsourcing and Business Process Outsourcing.  Based in
Reading, Berkshire, Xansa is listed on the London Stock Exchange (LSE:XAN) with
over 6000 people in the UK and India.

About the Shared Financial Services Centres (see also

The services provided by the SFSC currently include the following key financial
accounting and reporting activities, tailored specifically for NHS

Purchase to Pay

This activity covers the purchasing of goods and services by NHS Organisations
and payment for them. The key elements include the generation and mailing of
purchase orders, electronic receipting of goods or services, scanning, physical
and electronic storage of supplier invoices, electronic workflow processes for
invoice authorisation, checking of availability of funds for payments, and
either BACS or cheque supplier payments and supplier confirmation of payment.

Order to Cash

This activity primarily covers orders by third parties for services from NHS
Organisations and payment for these services but also transactions between NHS
Organisations.  The key elements include the input of sales orders, generation
and mailing of printed sales invoices, receipt of customer payments, cash
application, and credit control and debt management services.

Accounting to Reporting

This activity covers book-keeping for NHS Organisations, up to the point of
generation of trial balance, and the production of financial management reports
from the underlying accounting records.  The key elements include month end
closing, budgetary reporting and VAT management processes.  Reporting has been
enhanced with Oracle 9i Web Reporting, allowing budget holders to drill down
from summary statements to detailed account information or invoice images.  More
sophisticated reporting, budgeting and forecasting requirements are satisfied by
Oracle Financial Analyzer.

Cash Management and Treasury

This activity covers the management of OPG banking operations and associated
cash management activities.

                      This information is provided by RNS
            The company news service from the London Stock Exchange