Xchanging CFO Ken Lever has taken on the chief executive role at the business process outsourcer amid talk that it may break its banking covenants or be at risk of bankruptcy.
The former CFO at Tomkins and Alfred McAlpine became acting CEO in early February after incumbent and founder David Andrews resigned with immediate effect, though he remains involved as a senior adviser to chairman Nigel Rich – who will move from non-executive to executive chairman – “to support the company’s business development initiatives”. Lever retains the group CFO role while the business looks for Andrews’ replacement.
Lever is fronting Xchanging’s fight against a public relations firestorm. It issued a profits warning that performance in 2011 will be at the lower end of analyst expectations and has been accused of “aggressive accounting” – in other words, overpromising on projected financial performance – taking a £100m goodwill impair-ment hit on the cost of buying Cambridge Solutions in 2008, which has turned out to be more trouble than it was worth. “The constant reference to aggressive accounting is very unfair. It’s extremely misleading,” Lever told The Telegraph. “It’s important we don’t make a crisis out of a drama.” He said the Cambridge acquisition had “proved to be disappointing” but that “it isn’t an issue about accounting – it’s about an acquisition that has brought difficulties.”
Lever has emerged as a troubleshooter at Xchanging having only joined the business late last year. He told Financial Director that his approach to the finance role is to not over-value an accounting background. “The centre of my agenda is to get businesses to focus on the things that create value and not to get bogged down on accounting issues,” he said. “A business must create value and improve intrinsic value.” It will be interesting to see if Lever can turn the Xchanging ship around.
Read our profile of Ken Lever at financialdirector.co.uk/1744685