Misys full year profit hit by 'difficult' first half

Misys full year profit hit by 'difficult' first half

UK software firm Misys has admitted that its full year results are not satisfactory after it posted a 22% decline in operating profits and an 11% drop in group revenue for the year ending 31 May 2004.

Misys reported operating profit before goodwill and exceptionals of £102m for the year, while revenue fell to £900m.

The vendor says its profits were hit by a "difficult" first half. In a recent trading statement, Misys warned of a 10% drop in group revenues for the year, following challenging conditions at its banking and securities and financial services divisions.

In a statement, Kevin Lomax, executive chairman of Misys, says: "We cannot consider these financial results as satisfactory. They reflect a difficult first half of the year which we commented on in January. The second half performance was however much stronger."

Lomax says conditions in the banking software markets generally began to improve during the second half of the year as financial firms started to increase IT budgets for the first time since early 2001.

At its banking and securities division, total revenues fell eight per cent to £215m. Misys says nearly all of this shortfall occurred in the first half.
Initial Licence Fee (ILF) was £65m, but ILF taken to revenue at £63m was £7m (10%) lower than last year. However, although professional services revenues at £40m were 23% below the previous year, Misys says the rate of decline fell in the second half with professional services only two per cent below the comparable period.

Revenue at the vendor's financial services division was £366m, 16% below last year due to the continued weakness in its IFA network, Sesame.

Lomax says: "We believe the banking software markets are generally improving, although the rate of recovery of IT spending will be modest."

Comments: (0)