Banking unit drags down Misys in H1

Banking unit drags down Misys in H1

Misys has reported an 11% fall in revenues at its banking unit for the first half, although the gloom was partially offset by more encouraging news at the firm's healthcare and treasury and capital markets divisions.

The UK IT vendor posted revenue of £361 million for the six months, up 29% on the same period the previous year. However, on a pro-forma, constant currency basis, revenue actually slipped one per cent to £363 million.

Operating profit was £61 million for the first half, up 11% on the same period the previous year. Net profit tumbled 61%, from £72 million in H1 2008 to £28 million.

Recurring revenues, from maintenance, ASP subscriptions and transaction processing, were 62% of revenue, up six per cent.

The Allscripts healthcare and treasury and capital market units both saw modest revenue gains and rising order intake. Yet this was offset by tough conditions at the banking division, where revenue was £79 million, down from £89 million in H1 2008 and total order intake tumbled 22%.

Mike Lawrie, CEO, Misys, says: "In the banking market post credit crisis, IT spending remains subdued and we are seeing banks shifting towards fee earning activities. We have renewed our product portfolio in response to this, and we see a growing pipeline for our new products in mobile banking, trade services, transaction banking and business intelligence."

However, Lawrie says the vendor's cost saving push will deliver operating margins within the target range of 18% to 20% for the full year, leaving him "confident" of meeting profit expectations.

Misys shares were down 4.2 pence, or 1.9%, to 216.7 pence in morning trading.

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