Misys reports bullish Q3

Misys reports bullish Q3

In an upbeat interim statement, Misys is reporting healthy increases in third quarter revenue at its banking unit and treasury and capital markets division.

The upbeat Q3 statement, along with news that Misys is merging its struggling healthcare unit with US-based Allscripts Healthcare Solutions, sent the vendor's shares soaring 19.5% - or 27.75 pence - to 169.5 pence in morning trading.

Misys says it will pay £330 million in cash for a 54.5% stake in the combined healthcare group, which will be listed on Nasdaq. The UK vendor will partly fund the transaction by placing 42.8 million shares with institutional investors at 175 pence apiece to raise £75 million.

News of the merger deal comes as Misys reports group revenue of £114 million for the three months ended 29 February 2008, up nine per cent from a year ago. Total order intake for Q3 moved up 29% to £54 million, from £41 million in the year ago period.

Revenues at the vendor's banking unit rose 24% to £35 million, while total order intake increased by 43% to £15 million compared to last year. Misys says ILF revenue at the unit increased by 95% to £8 million during the third quarter, while ILF order intake was up 78% to £9 million.

Global services revenue at the unit came in at £8 million, up 34% on a year ago, while global services order intake was up nine per cent to £6 million. Maintenance revenue in the third quarter increased by five per cent to £19 million compared to last year.

Misys says revenue at its treasury and capital markets division increased by 15% to £31 million, while total order intake increased by 46% to £12 million compared to Q3 last year. ILF revenues for the quarter increased by 32% to £8 million while ILF order intake also came in at £8 million.

However, although global services revenue at the division increased by 23% during Q3 to £6 million, Misys says global services order intake was down 14% in Q3 to £4 million due to "timing issues".

Treasury and capital markets maintenance revenue increased by seven per cent to £14 million compared to Q3 last year.

Mike Lawrie, chief executive, Misys, says the Q3 results demonstrate the success of company's turnaround programme, which was launched a year ago.

In March 2007 the vendor embarked on a major restructuring programme in a bid to cut £145 million in costs over four years and re-invest £70 million to upgrade its product set during the same timeframe.

"Our results today are another data point demonstrating that we are executing successfully against our strategy and laying firm foundations for future growth," he says.

Lawrie also stresses again that the business had not been hit by the credit crisis: "To date we have not seen any changes to demand for our products and we believe this is confirmed by our order intake."

Looking ahead Misys says it expects full year group revenue growth of between two and four per cent, which equates to a range of £479 million to £488 million (2007: £469.7 million).

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