Outsourcing specialist Xchanging had a torrid time earlier this year when its shares dropped by nearly 50% in one day.
Investors had lost faith in the group after it had had to set up an analysts call to defend its accounting, the departure of the chief executive and a profits warning.
Today's news that it has sold a loss-making American part of its Cambridge Solutions business has cheered investors however. The shares are up 12%, or by 10.5p, to 97.5p.
Caroline de La Soujeole at Seymour Pierce said:
Management is beginning to get a grip on matters at Xchanging. The disposal of the loss making US workers' compensation business, announced this morning, is a step in the right direction as the business was loss making and a drain on the group's cash flows. The workers' compensation business is heavily dependent on the health of the US economy and was severely hit by volume reductions, price pressure and competition last financial year.
Analysts at Panmure Gordon suggested there is some way still to go for a full recovery:
We maintain a Sell recommendation on the shares with a multitude of risks still facing the company and continue to believe there are better ways to play the outsourcing space.
