Misys profiles R&D investment as markets show modest improvement

Misys profiles R&D investment as markets show modest improvement

Banking systems vendor Misys says it will release the first components of its upgraded Equation retail banking package during the first quarter of 2006.

The news comes as the vendor reports a ten per cent increase in total R&D spend of £88 million across all of its business lines for the year ending May 2005.

In upgrading Equation, the vendor is hoping to replicate the experience of its wholesale banking unit, which has so far won 28 deals for the new MidasPlus product set, including significant orders with Fortis Bank, Raiffeisen International and HVB in London.

Misys says the continued investment in the Equation package has sparked a "significant increase" in order intake during 2005. This included a major contract for the existing version of Equation with AK Bars in Russia, a new customer.

In a statement, released with its full year results, the vendor says: "The development of EquationPlus continues to plan and we expect this product to be fully available for general release during calendar 2006 with the first components deliverable during the first quarter of 2006."

A similar R&D investment in the Opics treasury platform is also espected to be realised in a forthcoming release dubbed OpicsPlus.

The investment in the product set is coming good as Misys' core banking markets begin to show fresh signs of life. Full year operating profit in the banking division rose to £43m, 17% ahead of last year, with revenues up seven per cent at £238 million. Maintenance revenues at £112m again showed modest growth at two per cent ahead of last year. Against this, professional services revenues which had declined for a number of years, showed evidence of recovery, particularly in the first half, with total revenues at £46m, 12% higher than the previous year.

Initial Licence Fee order intake at £76m was 16% ahead of the prior year, resulting in both a 13% lift in ILF revenues for the full year and an 18% increase in the closing order book to £31m. The vendor says that the ILF order book is now being recognised over a longer period than has historically been the case, "as a consequence of the extended nature of contract negotiation and implementation".

Misys says the results reflect a consistent, if modest, improvement in demand for banking systems from its core clientele, with the retail business especially active. Geographically, marked regional variations continue to exist, says the vendor, with developing markets such as China, South East Asia and Eastern Europe remaining strong.

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