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  • David Konig, Baird Equity

Business Process Outsourcing In Your Face Brexit...UK Is Accelerating

Baird Equity wanted to provide a review of UK operations across our coverage list during CQ3...who would have thought it, but nearly across the board acceleration in the UK! For all of you that thought we would see a gap down in growth, I guess you didn't have to mind the gap.

  • Below is a review of UK operations across our coverage list during CQ3.

  • Cognizant UK +12% yoy const-fx revenue growth (accelerating from +10% in Q2)

  • WNS UK +13% yoy const-fx revenue growth(accelerating from +10% in CQ2), and the strongest growth in many years

  • EXLS UK +17% yoy const-fx revenue growth (accelerating from +13% in CQ2)

  • GPN UK accelerated into the double-digits yoy const-fx during the August quarter

  • Below are Europe results (we believe the UK to be a large portion of Europe for the following companies)

  • MasterCard Europe +16% const-fx volume growth (+15% in Q2), adjusting for Article 8

  • Visa Europe +10.3% yoy purchase transactions, decelerating mildly from +10.7% in CQ2.

  • First Data EMEA GBS +8% yoy const-fx revenue growth (+2% in Q2) and GFS +8% yoy const-fx (+8% in Q2), with EMEA being the only geo in GFS not to decelerate during Q3.

  • Syntel Europe grew about 20%+ const-fx, and appears to have mildly accelerated from Q2 (likely slightly below 20%). It is largely UK, but we don't know exact mix, creating a little difficulty in calculating const-fx growth.

  • Sykes EMEA grew 2% yoy const-fx (accelerating from +0% in Q2)

  • Other data point:

  • UK Barclaycard recently released October retail sales, which meaningfully accelerated to +5.5% yoy growth (last two months also >4%). Yoy growth was the strongest since Barclaycard started publishing data.

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