25 February 2018
Visit www.capgemini.com/worldreports

Misys restructures banking systems business

26 January 2006  |  9461 views  |  0 Misys

UK software house Misys is restructuring its banking systems business following a 25% decline in first half operating profits at the division.

In a statement Misys says operating profit at the banking unit fell to £15m, from £20m a year ago, principally as a result of contract deferrals and some additional costs. The vendor says operating margin in banking for the first half fell to 11%, well below historic trends.

The reorganisation will result in cost savings of £10m - £15m for the next fiscal year.

Misys had warned in September that group first-half earnings will decline significantly due to delayed payments from banking clients. Overall the group's pre-tax profit fell to £34.4m for the six months ended 30 November 2005, from £40.2m a year ago, while revenue rose to £481m from £437m a year ago. Analysts had expected the vendor to post a pre-tax profit of around £36m - £38m.

But revenues at the banking systems unit were 10% ahead of last year at £125m, while initial licence fees (ILF) order intake at £36m was 27% ahead of the prior year.

Misys says the growth in banks' IT budgets has stabilised at around five per cent. Geographically, strong demand has continued in developing markets such as China, South East Asia and Eastern Europe.

In order to accelerate growth at the division, Misys is merging its retail and wholesale banking operations into a single unit, called Core Banking.

Kevin Lomax, chairman, Misys, says customers are increasingly looking to centralise back office functions and are demanding technology that can support both retail and wholesale banking operations, particularly in the faster-growing developing markets.

"It is clear that there is significant scope to increase the efficiency of our banking operations and align them more closely with changes underway in our customer base," he says.

The merged unit will include the Almonde risk technology business acquired by Misys last July. However the vendor says its Risk Vision unit is no longer core to its business and it is considering "a range of possible strategic options" for the division.

Lomax told reporters that the restructuring would probably include "a small number of job losses".

Misys says the shortfall in profits at its banking systems division was offset by its healthcare unit which posted a 13% increase in operating profit to £23m.

Lomax told reporters that going forward the group would now focus on growing its healthcare and banking software businesses. The vendor says it is hoping to dispose of its financial support services business Sesame in the next six months but still has to gain regulatory approval.

Shares in the firm were down seven pence to 233.75 pence in mid-morning trading.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Misys Banking chief Martin steps down

Misys Banking chief Martin steps down

20 December 2005  |  13091 views  |  0 comments
Misys splits chairman/CEO role

Misys splits chairman/CEO role

03 November 2005  |  7809 views  |  0 comments
Misys shareholders demand answers for poor performance

Misys shareholders demand answers for poor performance

30 September 2005  |  10028 views  |  0 comments
Misys plummets on profits warning

Misys plummets on profits warning

13 September 2005  |  7210 views  |  0 comments
Misys drops controversial retention bonuses plan

Misys drops controversial retention bonuses plan

12 September 2005  |  6053 views  |  0 comments
Misys profiles R&D investment as markets show modest improvement

Misys profiles R&D investment as markets show modest improvement

21 July 2005  |  6534 views  |  0 comments
Misys disposes of AssureWeb stake

Misys disposes of AssureWeb stake

11 July 2005  |  6297 views  |  0 comments
Misys acquires banking risk management firm Almonde

Misys acquires banking risk management firm Almonde

08 July 2005  |  13743 views  |  0 comments
Misys details strategy for treasury and capital markets

Misys details strategy for treasury and capital markets

30 June 2005  |  8166 views  |  0 comments
Misys to create new treasury and capital markets business

Misys to create new treasury and capital markets business

22 June 2005  |  7264 views  |  0 comments
Misys rises on improving results

Misys rises on improving results

27 January 2005  |  6691 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.ebaday.comVisit https://www.capgemini.comVisit http://info.nice.com

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
12152 views comments | 16 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10491 views 4 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
8874 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
8325 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
7941 views comments | 10 tweets | 14 linkedin

Featured job

Six-Figure-Base, Double OTE, Benefits Package
London, UK

Find your next job