Misys full year profit up; confident on outlook

Misys full year profit up; confident on outlook

After posting solid gains for the last 12 months Misys says it is confident of its ability to continue to perform, despite the credit crunch.

The UK banking-to-healthcare vendor said in a 18 June trading update that the credit crunch has not yet impacted its business.

In today's statement, which accompanies the firm's audited results, Misys says full year operating profit jumped 37% to £81 million, while group revenue rose six per cent to £492 million.

Misys said in June that its treasury and capital markets (TCM) and banking units delivered revenue growth above expectations.

The audited results show that revenue at the banking division rose five per cent to £160 million. Total order intake increased eight per cent to £83 million, but ILF revenue dropped one per cent.

Meanwhile revenue at the TCM unit rose 13% to £141 million and total order in-take at the division was up 16% to around £73 million. ILF revenue increased by 12% to £45 million, while maintenance revenue at £56 million grew by seven per cent and global services revenue showed strong growth of 41% to £28 million.

Misys says although the credit crunch and liquidity issues have affected a significant number of banks, many have been unaffected.

In the high-growth markets of the Middle East, Africa, Russia and the Commonwealth of Independent States (CIS) customers' priority has been to build capacity and to bring new products to market quickly, says Misys. Meanwhile, in the established markets of North America and Western Europe customers are seeking solutions to help address cost through implementing global processing hubs and to expand into high growth regions.

"While we remain vigilant to the challenges posed by the macro-economic backdrop, our geographic business mix, together with our high levels of recurring revenue, give us confidence in our ability to continue to perform," says Misys CEO Mike Lawrie. "We will sharpen our focus on competing harder, winning more, and entering into new high growth markets. Achieving these goals will establish a longer term platform for growth."

Looking ahead Misys says it is raising targets for the next phase of its five-year corporate turnaround programme, which was launched in March 2007.

The vendor says it has delivered ahead of schedule on the targets for phase one of the turnaround and is now entering the second phase, which it expects will take around two years to execute.

Misys says in light of the progress made so far it is increasing targets for the next phase and now aims to grow group revenue at around 5-8%, up from the 2-4% targets originally set out in 2007. The vendor says it will grow its global services business at around 15-18% - up from the 3-5% targets originally set - and increase revenue by 10-13% at its TCM division.

Lawrie told reporters the next phase is about "building a sustainable growth platform so we can continue to deliver revenue growth and profit growth going forward".

You can view Misys share data here

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