The Finextra50 Financial Technology Index fell 11% last week as a big drop in the technology sector compounded the ongoing financial industry turmoil. The Innovation Group, Vasco and Cognizant led the big fallers, while Oberthur, Misys and Bravura provided the only positive stories.
The Innovation Group was the index's biggest faller last week, dropping 40% after it reduced its profit outlook for 2008 in a trading update. The business process outsourcing specialist for the insurance sector said it expects adjusted pretax profit to be £4.6 million lower than current market expectations.
The company said £2.6 million of this is due to contract delayes and lower volume in its US BPO business, while £2 million is from a contract write-off with a UK client after its parent group went into administration.
Despite this, the company says, its pipeline is substantial, the business is cash generative, it is winning customers, and renewals remain strong.
Most of the index's other big losers last week are listed in the US where the Nasdaq 100 Technology sector index fell 12.8% by end of trading Friday. They include:
Only seven companies in the index saw share price rises last week. The gainers were led by Oberthur Technologies, which rose 33.33% to EUR 6.68. Friday's close was just below the EUR6.70 that its majority owner, family holding company François-Charles Oberthur Fiduciaire (FCOF), is offering for the stake it doesn't already hold as it plans to take the company private.
Misys rose 9.59% to 140p after Q1 results revealed that its banking division delivered a nine per cent rise in revenue. This was driven by an improvement in new licence fees (ILF) and growth in global services and maintenance revenues. This contributed to a group revenue increase of six per cent to £114 million, while order intake rose 11% to around £56 million in the quarter ending 31 August 2008.
Australian wealth management software vendor Bravura Software rose 6.9% to AUD$0.62 after it experienced a 15.6 per cent increase in revenue during the last quarter ended September 30, 2008. Revenue increased from the $26.8 million taken in the previous corresponding quarter to $31 million.
Bravura chief executive and managing director Iain Dunstan and group chief executive and director - operations Simon Woodfull said in a statement late last month they were confident of reaching an agreement with the embattled Lift Capital, which went into administration holding shares belonging to the two as part of a margin loan.
If an agreement is reached, it would enable Dunstan and Woodfull to regain ownership of shares representing 30.5 per cent of Bravura's issued share capital, and this could then be used to participate fully in any revised acquisition proposal that may be put to Bravura by Ironbridge Capital, which expressed interest in buying the company over the summer.
Software Solution Partnership (SSP) leaves the index this week after the completion of a private equity takeover. In July, SSP Holdings agreed a 190 pence per share cash offer for the company by H&F Sensor Bidco, a special vehicle of buyout firm Hellman & Friedman Llc. The deal valued SSP at about 161.6 million pounds.
Indian provider of exchange, brokerage and messaging solutions Financial Technologies takes SSP's place as the index's newest entrant.
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.