Misys says recovery on track

Misys says recovery on track

UK banking-to-healthcare software vendor Misys is reporting an increase in revenues at its banking division and says its corporate turnaround programme is proceeding in line with expectations.

In a trading statement ahead of its full-year results for the year ended 31 May 2007, Misys says the five year turnaround programme it announced in March is going according to plan.

The vendor says total revenue at its banking division was up six per cent in the year. However growth was sluggish with revenue from initial licence fees (ILF) rising just two per cent and ILF order intake increasing just one per cent.

Professional services revenues increased by 10% for the full year, while maintenance revenues rose by five percent. Misys says it core banking performance has "not changed significantly year to year".

Mike Lawrie, who took over from Kevin Lomax as Misys CEO in December, told reporters that the banking business would start to increase licensing fee revenue following the release of new products from the end of the year.

However the vendor's treasury and capital markets unit "performed strongly", with over 20 new name customers signed in the period. Lawrie says Misys will invest more in this business.

Despite the growth in banking systems revenues Misys says overall underlying full year revenue will be flat due to a poor performance at the vendor's healthcare unit.

But Lawrie says the cost actions are on target and have delivered improvement in margin and profitability: "We said that this first phase of the turnaround process would be about improving profitability and efficiency as well as getting the costs out so that we can re-invest in our business to get revenue growing."

Misys shares were up 2.90% to 241.38 pence in mid-morning trading, after rallying to 253.75 pence earlier.

The vendor will release its preliminary results on 24 July 2007.

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