SEC Filings

20-F
WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018
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Table of Contents

WNS Auto Claims BPM

Segment Revenue

Revenue in the WNS Auto Claims BPM segment decreased by $9.2 million to $35.4 million in fiscal 2018 from $44.6 million in fiscal 2017. The decrease was primarily on account of a decrease in revenue from existing clients of $9.9 million, partially offset by an increase in revenue from new clients by $0.7 million. The increase was also on account of an appreciation of the pound sterling against the US dollar by an average of 1.4% in fiscal 2018 as compared to the average exchange rate in fiscal 2017. Payments made to repair centers in fiscal 2018 decreased by $7.1 million to $17.0 million in fiscal 2018 from $24.1 million in fiscal 2017.

Revenue less repair payments (non-GAAP) in this segment decreased by $2.1 million to $18.4 million in fiscal 2018 from $20.5 million in fiscal 2017. The decrease was primarily on account of a decrease in revenue from existing clients of $2.5 million, partially offset by an increase in revenue from new clients by $0.4 million. The increase was also on account of an appreciation of the pound sterling against the US dollar by an average of 1.4% in fiscal 2018 as compared to the average exchange rate in fiscal 2017.

Revenue in the WNS Auto Claims BPM segment decreased by $8.7 million to $44.6 million in fiscal 2017 from $53.3 million in fiscal 2016. The decrease was primarily on account of a decrease in revenue from existing clients of $10 million, partially offset by an increase in revenue from new clients by $1.3 million. The decrease was also on account of a depreciation of the pound sterling against the US dollar by an average of 13.4% in fiscal 2017 as compared to the average exchange rate in fiscal 2016. Payments made to repair centers in fiscal 2017 decreased by $7.1 million to $24.1 million in fiscal 2017 from $31.2 million in fiscal 2016.

Revenue less repair payments (non-GAAP) in this segment decreased by $1.6 million to $20.5 million in fiscal 2017 from $22.1 million in fiscal 2016. The decrease was primarily on account of a decrease in revenue from existing clients of $2.1 million, partially offset by an increase in revenue from new clients by $0.5 million. The decrease was also on account of a depreciation of the pound sterling against the US dollar by an average of 13.4% in fiscal 2017 as compared to the average exchange rate in fiscal 2016.

Segment Operating Profit

The segment reported an operating loss of $0.1 million in fiscal 2018 as compared to a loss of $21.6 million in fiscal 2017. The lower segment operating loss recorded in fiscal 2018 was primarily due to a non-recurring expense of impairment of goodwill recognized in fiscal 2017. The lower segment operating loss was also in part due to lower cost of revenue (excluding payments to repair centers), lower general and administrative expenses and higher foreign exchange gains, partially offset by lower revenue less repair payments (non-GAAP).

Our cost of revenue (excluding payments to repair centers) decreased by $1.2 million to $14.4 million in fiscal 2018 from $15.6 million in fiscal 2017. The decrease in cost of revenue (excluding payments made to repair centers) was primarily on account of a decrease in our employee costs by $0.8 million, and a decrease in facilities cost by $0.1 million.

Our other costs include selling and marketing expenses, general and administrative expenses, and foreign exchange loss or gain. Our other costs decreased by $0.9 million to $4.0 million in fiscal 2018 from $4.9 million in fiscal 2017, primarily on account of a decrease in general and administrative expenses by $0.5 million to $3.8 million in fiscal 2018 from $4.3 million in fiscal 2017, partially offset by an increase in foreign exchange gains by $0.3 million.

The segment reported an operating loss of $21.6 million in fiscal 2017 as compared to a loss of $1.2 million in fiscal 2016. This was primarily on account of the impairment of goodwill recorded in fiscal 2017, lower revenue less repair payments (non-GAAP), and higher foreign exchange losses, partially offset by lower cost of revenue (excluding payments to repair centers), and lower general and administrative expenses.

During the fourth quarter of fiscal 2017, proposed changes to the laws of the UK governing personal injury claims generated uncertainty regarding the future earnings trajectory of our legal services business in our WNS Auto Claims BPM segment, as a result of which we had expected that we would eventually exit from providing legal services in relation to personal injury claims. We also experienced a decrease in volume of and loss of such business from certain clients of our traditional repair services in our WNS Auto Claims BPM segment in fiscal 2017. As a result, we had expected the future performance of our WNS Auto Claims BPM segment to decline significantly and therefore significantly reduced our financial projections and estimates of our WNS Auto Claims BPM segment. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $21.7 million to our results of operations for fiscal 2017.

Our cost of revenue (excluding payments to repair centers) decreased by $2.6 million to $15.6 million in fiscal 2017 from $18.2 million in fiscal 2016. The decrease in cost of revenue (excluding payments made to repair centers) was primarily on account of a decrease in our employee costs by $1.7 million, and a decrease in facilities cost by $0.8 million.

Our other costs decreased by $0.3 million to $4.9 million in fiscal 2017 from $5.2 million in fiscal 2016, primarily on account of a decrease in general and administrative expenses by $0.5 million to $4.3 million in fiscal 2017 from $4.8 million in fiscal 2016, partially offset by an increase in foreign exchange losses by $0.1 million.

 

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