Misys posts FY profit rise on banking recovery; no news on FIS deal, Kondor bid mooted

Misys posts FY profit rise on banking recovery; no news on FIS deal, Kondor bid mooted

UK fintech vendor Misys has recorded a 12% rise in full year adjusted profits, boosted by strong uptake of its new BankFusion platform and the successful integration of recently acquired Sophis.

Misys - currently in an offer period after receiving a takeover approach from FIS - posted adjusted operating profits of £72 million, up from £64 million the previous year.

Revenues were £370 million, up four per cent, although the growth has accelerated to eight per cent in the second half. Order intake rose three per cent to £213 million. Adjusted basic earnings per share from continuing operations were 11 pence, up from 7.6 pence.

The results have been boosted by a return to growth for Misys' banking unit, which saw revenues of £167 million, up three per cent on the previous year and a 15% jump in operating profits to £36 million. In the second half, revenue growth was 10% as adoption of BankFusion picked up, bringing the total number of new customers to 27 for the year.

The treasury and capital markets division continued to make steady progress, with revenues up three per cent to £185 million and adjusted profit of £43 million, up two per cent.

However, software problems with a new release of the Opics Plus product suite which had to be withdrawn marred the results from the unit.

Meanwhile, Sophis - the capital markets software vendor recently acquired in a deal worth around £375 million - contributed £17 million to revenues in the fourth quarter - 32% up on the £13 million it made as a separate company in Q4 2010.

Misys says heavy investment in research and development - 19% of revenue this year - has paid off, with 41% of orders in the 12 months coming from products developed over the last two years, compared with 28% in 2010.

The firm has also put money into people, making 900 hires, mostly in the growth regions of Asia, Latin America, Africa and the Middle East - contributing to a 14% revenue boost in these places.

Mike Lawrie, CEO, Misys, says: "The growth in our business accelerated in the second half, with 8% revenue growth and 16% adjusted operating profit growth. I am pleased with our pro-forma adjusted EPS growth of 22% for the year. These results reflect the success of our BankFusion platform, the momentum behind our new solutions and significant growth by Misys Sophis."

Lawrie provided no update on the proposed FIS deal, saying only: "We have great confidence in the future opportunities for Misys to continue its path to leadership in our industry. Our confidence has been confirmed by the approach we received from Fidelity National Information Services with a potential offer to acquire the company."

He also said that the firm was still in the market for bolt-on acqusitions, indicating that a bid for Thomson Reuters' Kondor risk system was under consideration.

Shares in the vendor were down 4.95 pence, or 1.2%, at 392.05 pence, in mid-morning trading.

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