Group revenues for the six months to 30 November 2001 at £480m were 18% ahead of the equivalent period last year due to the effect of acquisitions. Operating profit at £54m was £10m below last year mainly due to the continued slower trading within the banking and securities division. Here, margins at 18% were well below the previous year, with operating profits and revenues down £12 million on the same period.

Kevin Lomax, Misys chairman, glossed over the figures: "Customers in the banking and securities division continued to be cautious in the timing and placing of larger orders, but there was little evidence of major projects being cancelled."

Almost all the drop-off in demand occured within asset management and securities trading, he says, following the downturn in equity markets. The weaknesses in the retail sector, seen in the second half of the last financial year, was reversed adds Lomax, with a significant improvement in orders for Equation, and steady sales of universal and international branch banking products Midas and Bankmaster LAN.

In more detail, initial license fee (ILF) order intake within banking and securities was down by 14% compared with the same period last year, while ILF taken to revenue at £41m was 21% lower than last year. Consequently the ILF order book at 30 November 2001 at £24m was slightly higher than at 31 May 2001 (£23m) but below 30 November 2000 (£33m).

The lower ILF activity had a knock-on effect to bespoke work, dragging professional services revenues down by nine per cent to £47m. In contrast, maintenance revenues at £61m were nine per cent up on last year.

Lomax insists that an upturn in the division's fortunes cannot be far off. "The pressures and demands on our customers are growing such that it is difficult for them to reduce IT investment for any prolonged period without damaging their competitive position," he says. "It is these factors, despite the lower levels of activity around the world, that lead us to the view that as confidence returns, our prospect pipelines will convert more rapidly into orders."

Problems within banking and securities were offset by strong results in the company's healthcare division and a steady performance within financial services.

The execution of the company's technology strategy in the life businesses has made significant progress, with the integration of the two portal businesses, AssureSoft and m-link completed ahead of schedule. Misys recently concluded an agreement with three product providers - Friends Provident, Norwich Union and Scottish Widows - for a £9.2m equity investment into the AssureWeb electronic trading platform over the next three and a half years. A further £16.8m will be paid by the three product providers for services related to usage of the portal.

"The investments should significantly reduce operating losses and move the portal to profitability in a shorter timeframe," states the vendor.

Separately, Misys reports that the mi-solution desktop service for IFAs has already signed up 200 advisers off the back of its initial pilot programme.