UK banking-to-healthcare vendor Misys is reporting revenue growth above expectations at its fintech divisions and says the credit crunch has not yet impacted its business.
The vendor has posted an upbeat trading update saying group revenue increased six per cent for the year ending 31 May 2008, while operating profit jumped 36%.
"Despite the credit crunch and liquidity issues in the financial markets, many of our customers remain unaffected, notably in Africa, Asia, the Middle East, Russia and the CIS," says Misys chief executive Mike Lawrie. "Within our established markets of North America and Western Europe, many customers are seeking solutions and service support to help address cost, compliance and risk issues."
Lawrie says the company's treasury and capital markets (TCM) and banking units have delivered revenue growth above expectations.
Revenue at the TCM unit rose 13% in the year and total order in-take at the division was up 16% to around £73 million. ILF revenue at the unit rose 12%, while global services revenue was up 41% and maintenance revenue grew approximately seven per cent. Misys says in addition to as signing 18 new name customers, the TCM unit has generated a greater percentage of revenue from existing clients compared with the prior two years.
Revenue at the vendor's banking unit was up five per cent, although ILF revenue dropped one per cent. Total order intake at the division was up eight per cent to about £83 million. Misys says the division won a number of new contracts with regional banks - including Al Baraka Islamic Bank in Pakistan and Bank Soyuz in Russia.
The banking unit also signed the first company - South Africa's Standard Bank - to the new BankFusion platform which has been in development since 2006. Misys says it expects to implement BankFusion in "several" customer sites in the 2008/09 fiscal year.
Misys also said the merger of its healthcare business with US-based Allscripts Healthcare Solutions was "on track".
Lawrie says the group's solid performance, together with strong recurring revenues "means that the credit crisis to date has not affected our expectations for Misys".
Misys willl report full year audited results in late July.
Shares in Misys rose eight pence - or 4.9% - to 172.5 pence in morning trading following the release of the trading update, but the stock had sunk back to 159.50 pence by mid-afternoon after some analysts questioned whether the drop in ILF revenue at the banking unit is an indication that the vendor is being hit by the crunch.
According to a Bloomberg report, a Dresdner Kleinwort analyst has stated that the "ILF trends" are some "cause for concern", while a Citigroup analyst has said the "weakness in banking" could be the first sign that the credit crunch is starting to bite the business.
You can view Misys share data here