Software group Misys has reported lower profits and announced plans to float its IFA life and pensions business within the next two years. The company has also named a new CEO for its underperforming banking and securities division, which reported profits 30% down on last year.
Across the group, adjusted pre-tax profit before exceptionals and goodwill was £112 million pounds in the year ended May 31, down from £136 million a year before. Turnover rose 22 percent to £1.04 billion pounds, including acquisitions.
A strong performance in the healthcare sector helped mitigate the downturn in the fortunes of the core banking and securities business, where profits slumped to £63 million from £90 million a year ago. Revenues in the division are down £46 million to £303 million.
The company has moved to shore up the business, replacing incumbent CEO Rupert Soames with Ivan Martin, previously CEO of the financial services division. Martin, who joined Misys in 1995 after the acquisition of the ACT Group, has overseen operating profits ahead of last year within the financial services brief, despite the slowdown in the UK economy and general investor caution.
Misys chairman Kevin Lomax says a strong pipeline of orders in banking and securities - reflected in an order book 31% ahead of last year at £31 million - plus cost-cutting measures point to a "progressive improvement" in the trading performance of the division next year.
On the planned float of the IFA business, Lomax says the business is "of a size and at a stage in its development where it would benefit from having an independent future".
As part of the flotation plan, the 7000+ advisers of the Misys-owned networks – Countrywide, DBS, Financial Options, IFA Network and Kestrel – will receive benefits linked to their membership, including participation in the float.
The floated business would be a self-contained entity comprising the five IFA networks, the related technology businesses of the AssureWeb portal and the IFA desktop software products range.
The flotation would not occur until equity markets have stabilised and until the new regulatory regime is clearer, after the Financial Services Authority reports on depolarisation in the autumn.
In the interim, the company plans to integrate the Misys IFA Services and DBS networks under a single management team and compliance regime. Patrick Gale, CEO, Misys IFA Services will lead this combined entity. Steve Pearson is appointed DBS Network Director.