Misys plc - Update on Adoption of International Financial Reporting Standards
The Misys Group is adopting International Financial Reporting Standards (“IFRS”) as its primary accounting basis for the year ended 31 May 2006. As part of this transition, Misys is today presenting its preliminary financial consolidated statements for the year ended 31 May 2005 and the six months ended 30 November 2004 prepared in accordance with IFRS. This announcement, together with the presentation to analysts and investors on 6 April 2005, is intended to aid understanding of the impact of IFRS on Misys.
At 09.00 GMT today, Misys will host an IFRS conference call for analysts and investors. The presentation slides to accompany the conference call are available on the Misys website at www.misys.com/investors/presentations . An archived audio webcast, including questions and answers, will be available within 24 hours. Details of the conference call and the playback facility may be found at the end of this announcement.
Overview
As previously communicated, the underlying performance of the business and its cash flows are unaffected by the transition to IFRS.
The primary areas of change for Misys arising from the adoption of IFRS are:
• employee share-based payments;
• development expenditure;
• amortisation of goodwill;
• the accounting treatment of dividends; and
• from 1 June 2005, financial instruments
• employee share-based payments;
• development expenditure;
• amortisation of goodwill;
• the accounting treatment of dividends; and
• from 1 June 2005, financial instruments
| All figures in £ millions |
31 May 2005
|
|
| UK GAAP statutory operating profit |
40.6
|
|
| IFRS adjustments | ||
| Good will amortisation |
52.1
|
|
| Development costs |
7.6
|
|
| Share-based payments |
(8.9)
|
|
| Other adjustments |
(1.1)
|
|
| Total adjustments |
(49.7
|
|
| IFRS operating profit |
90.3
|
The following tables summarise the impact of the adoption of IFRS on Misys’ operating profit for the year ended 31 May 2005:
| All figures in £ millions |
31 May 2005
|
|
| UK GAAP operating profit pre goodwill amortisation and operating exceptional items |
101.6
|
|
| IFRS adjustments | ||
| Development costs |
7.6
|
|
| Share-based payments |
(8.9)
|
|
| Other adjustments |
(0.8)
|
|
| Total adjustments |
(2.1)
|
|
| IFRS operating profit pre operating exceptional items and acquired intangibles amortisation |
99.5
|
The effect on Earnings Per Share is shown below:
|
31 May 2005
|
|||
| All figures in pence |
UK GAAP
|
IFRS
|
|
| Basic earnings per share |
2.9
|
12.4
|
|
| Adjusted basic earnings per share |
15.6
|
14.8
|
|
For the year ended 31 May 2005:
• operating profit pre goodwill and operating exceptional items has decreased by £2.1m to £99.5m as a result of the IFRS restatement
• adjusted basic earnings per share have decreased from 15.6p to 14.8p and basic earnings per share have increased from 2.9p to 12.4p
• the net impact of the capitalisation and amortisation of development costs increases the operating profit pre goodwill and operating exceptional items by £7.6m; at 31 May 2005 the net carrying value on the balance sheet of the associated development costs is £18.4m
• the effective tax rate on profit before tax, goodwill amortisation and exceptional items from continuing operations increases from 14% to 17%
• operating profit pre goodwill and operating exceptional items has decreased by £2.1m to £99.5m as a result of the IFRS restatement
• adjusted basic earnings per share have decreased from 15.6p to 14.8p and basic earnings per share have increased from 2.9p to 12.4p
• the net impact of the capitalisation and amortisation of development costs increases the operating profit pre goodwill and operating exceptional items by £7.6m; at 31 May 2005 the net carrying value on the balance sheet of the associated development costs is £18.4m
• the effective tax rate on profit before tax, goodwill amortisation and exceptional items from continuing operations increases from 14% to 17%
IAS 32 and IAS 39 will be adopted as at 1 June 2005 and are not expected to have any impact on reported net debt.
A conference call for analysts, chaired by Howard Evans, Finance Director, will be held at 09.00 GMT today. To access this call dial +44 (0)1296 480 100, passcode C 679849. The call will be available for replay on the Misys plc website within 24 hours.
A full copy of the IFRS Transition document is availble to download: - IFRS Transition PDF
For further information, please contact:
Andrew Farmer
Head of Investor Relations
Misys plc
Tel: +44 (0) 20 7368 2307
E-mail: andrew.farmer@misys.co.uk
Head of Investor Relations
Misys plc
Tel: +44 (0) 20 7368 2307
E-mail: andrew.farmer@misys.co.uk
Susan Cottam
Group Communications Director
Misys plc
Tel: +44 (0) 20 7368 2305
E-mail: susan.cottam@misys.co.uk
Group Communications Director
Misys plc
Tel: +44 (0) 20 7368 2305
E-mail: susan.cottam@misys.co.uk
Josh Rosenstock, Corporate Communications Manager
Misys plc (FTSE: MSY), the global software company, is one of the world’s largest and longest-established providers of industry-specific software. Founded in 1979, Misys serves the international banking and healthcare industries and the UK general insurance industry, combining technological expertise with in-depth understanding of customers’ markets and operational needs. In banking Misys is one of the top four software providers worldwide and the largest outside the US, with over 1,200 customers, including 49 of the world’s top 50 banks. In healthcare Misys is a top five software provider in the US market, serving more than 92,000 physicians in 18,000 practice locations, 1,250 hospitals and 600 home care providers. In UK general insurance Misys is the market leader in software solutions. Through Sesame, a wholly-owned subsidiary, the company is also a leading provider of support services to over 8,000 financial advisers in the UK. Misys employs over 6,500 people who serve customers in more than 120 countries. For more information, visit www.misys.com.
