XANSA, the outsourcing group, yesterday dismissed the threat of Indian rivals beefing up their British operations and cautioned that other competitors trying to expand in its home territory would find themselves “embarking on a journey of discovery”.

Alistair Cox, Xansa’s chief executive, said that although foreign entrants could prove tough competitors, the costs of employing UK staff would put off newcomers: “It’s taken us four or five years to get it right . . . welcome to the marketplace is what I say.”

His comments come in the wake of a deal by Tata Consultancy Services, India’s largest outsourcer, to take on 900 employees of Pearl Assurance in an attempt to build up a back- office business in the UK for the life and pensions industry.

Xansa has been transforming its business to take advantage of the trend to send work offshore. Half of its workforce is in the UK and half in India, allowing it to take on projects that can be split up and completed in two locations, according to the needs of the client.

Mr Cox said the company would probably have about 60per cent of its workers offshore in 18 months’ time.

He was speaking as the group reported first-half results that showed an improvement in profit margins to 7.2 per cent in the six months to the end of October, from 5.6 per cent in the same period last year.

Turnover fell to £175.9 million in the period, from £189.5 million last time, as more work was delivered from India, for which it cannot charge as much. That left the forward order book little changed from last year at £450 million, but Mr Cox said forward orders would begin to improve in the second half. Operating profits increased to £11.1 million, from £9.2 million last time.

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