In unaudited results for the six months to end-November, Misys is reporting a nine per cent decline in revenues from banking and securities. The market malaise has hit activities across the board, with initial license fee (ILF) order intake and professional services revenues both suffering under IT spending cutbacks at financial firms.

In a statement, the company reports: "Customers remain cautious in the timing and placing of orders and the total number of prospects that we have converted to orders in the first six months was somewhat below the expectation that we had at the time of the AGM. However, we have signed orders in all sectors of the market and the pipeline remains robust. Hence in our view the overall state of the banking and securities market has neither improved nor deteriorated."

In more detail, ILF order intake at £32m was 22% below the same period last year, while ILF taken to revenue was down by 8%. The ILF order book at £25m was lower than at the end of May 2002 but slightly ahead of November 2001.

Despite the lower order intake the number of large orders (over £1m of ILF) remained broadly in line with the level achieved in the equivalent period last year. The lower level of ILF revenues over the last twelve months has further slowed the growth in maintenance revenues, which rose by one per cent overall.

More significantly, says Misys, the level of professional services has been disproportionately affected by cut-backs in IT budgets.

Staff cutbacks in the asset management and securities trading business in the first half incurred one-off costs of £1.4 million. Misys has declined to give numbers but industry sources estimate that the purge accounted for a fifth of the workforce.

The firm says it is now reviewing staffing levels across the rest of the division, with particular emphasis on professional services. Misys says the redundancy costs arising from this review will be charged against second half operating profits and will be quantified when the firm announces first half results in January 2003.

Operating profit - before the £1.4 million redundancy costs already chalked up - is expected to be broadly in line with last year's first half of £28.1m (less exceptional costs of £10.1m).

Elsewhere, both Misys healthcare systems and the financial services division achieved revenues significantly ahead of the same period last year. Within financial services, revenues were swollen by the acquisition of DBS and the funding of the AssureWeb portal by industry partner. Overall revenues in financial service were 17% ahead of last year, although life and pensions revenue was down eight per cent.