Shares in banking systems vendor Misys were among the top fallers Monday morning as the markets took a dim view of an uninspiring trading update.
Misys stock dropped 10.25 pence to 210.75 pence in early trading as the vendor reported performance in line with expectations with protracted client contract negotiations continuing to dampen license revenue.
In the banking division, total revenues were up two per cent on a like for like basis, but down eight per cent on reported turnover following the sale of the asset management and securities trading businesses.
The reported closing ILF order book was £29m, up 24% on the prior year comparable period. Operating margins on a reported basis increased to around 17%, up from 14% in the prior year.
In a statement, Misys pointed to changes in banks' purchasing behaviour as contracts become larger and more complex.
"Contract negotiation is typically more protracted now than it was before the downturn of the last three years," states the vendor. "This has had the effect of making it more difficult to predict when deals which have been awarded will be signed. Specifically, a number of deals we had been awarded and had hoped to sign by the period end were signed after the period end."
As a result, like for like ILF revenues were down nine per cent, while maintenance revenues increased by one per cent and professional services revenues rose by 19%.
Loan IQ, acquired by Misys in January 2004, turned in revenues of £6 million in the six months to November 2004.