Shares in British outsourcing firm Xchanging climb 12.5 percent after the firm reports an expected 23 percent fall in profit in 2011, a transitional year for the company during which it overhauled operations, and says changes made to the business would pay off in 2012.
Peel Hunt raises its recommendation on the firm to "hold" from "sell" following the results, saying: "2011 numbers are slightly ahead of our forecasts and, while issues at Kedrios and XTB are unresolved, progress made in the last 12 months has significantly de-risked the stock."
"Phase one of the four-phase recovery strategy has been delivered successfully and the outlook for further self-help and margin improvement is positive. We see a substantial amount of risk as having been removed from the business," the broker says, raising its target price to 80 pence from 60 pence.
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