Misys plc, the global software and solutions company, today (20 June 2007) issues a trading statement for the year ended 31 May 2007.  Misys plc preliminary results will be announced on 24 July 2007.

Commenting on trading, Mike Lawrie, Chief Executive, Misys plc, said:

 

 

 

 

-          Operating profit increased by around 17%^1,3

-          Operating margin increase expected to be around 2% points^1,3

-          Adjusted basic EPS² ahead of forecast and expected to be in the range of 14 - 15p

-          Banking: total revenues up 6%³

-          Healthcare: total revenues down 3%³

-          Sesame: sale of 100% of Sesame to Friends Provident plc completed on 8 June 2007

 

¹ Excluding Sesame

 

 

We announced our strategy to turn Misys around and have begun to execute across all business areas. This first phase of the turnaround programme is about implementing cost savings and improving productivity so that we can re-invest in the business to grow revenue. This statement re-confirms that the turnaround is progressing in line with our expectations. This is a 3 to 5 year process and we are confident that we have the right foundation for moving forward and delivering improved and sustained returns for shareholders. 

 

 

 

Revenues were up 6%, ILF revenues increased by 2% and ILF order intake was up 1%. In line with the trend in the first half, professional services revenues increased by 10% for the full year. Maintenance revenues increased by 5% as we continue to deliver valuable support to our customer base. Operating margin, on an as reported basis, is expected to be around 17%, up 3% points compared to last year. 

 

Core Banking performance has not changed significantly year to year. Recurring revenue continues to be strong demonstrating good customer loyalty. The product and services strategy we announced is progressing to plan and has been well received by customers. In addition, a number of new contracts were signed with major global banks, including Grupo Santander and Credit Suisse. 

 

Treasury & Capital Markets performed strongly and our market leading products have enabled us to win over 20 new name customers in a strong global market, including a number of tier 1 clients. This business is a growth engine for us and, in line with our strategy, we are investing here to accelerate that growth and enhance our leading market position.

 

 

 

Revenues were down 3%, ILF revenues were down 15% and ILF order intake decreased by 18%. As a result of the lower ILF revenues and order intake professional services revenues decreased by 10%.

 

Despite the ILF performance, maintenance revenues continued to grow, increasing by 8%, demonstrating good customer loyalty.  As in the first half, we have continued to see the benefits of the Payerpath acquisition with transaction processing revenues 3% higher. Operating margin, on an as reported basis, is expected to be slightly below the 15.1% achieved last year.

 

 

 

 

 

 

As communicated on 8 March, certain costs will be treated as exceptional over the next few years with the largest charge made in the year to 31 May 2007. The charge in the year, which is estimated to be around £60m, will include the impairment of Sesame goodwill arising from the disposal, impairment of capitalised development costs arising from the change in strategy, costs relating to the turnaround programme primarily related to process integration and property and, as already reported in the first half, the costs relating to the terminated offer process. A detailed analysis of these exceptional items, which is consistent with the guidance given on 8 March, will be provided with the full year results announcement in July. 

 

Retranslating the results for 2006 using the average exchange rates for 2007 decreases 2006 revenues by £31m and operating profit by £6m and this is reflected in the like for like comparative results. The most significant impact is from the movement in the US dollar, where the average exchange rate in 2007 was US$1.9198:£1 compared to US$1.7760:£1 in 2006.   The US$ exchange rate at 31 May 2007 was US$1.9796:£1. If we were to retranslate our 2007 results at the closing exchange rates at 31 May 2007 instead of the average rates for the year this would result in revenue and operating profit decreasing by approximately £11m and £2m respectively on an adjusted basis.

A conference call for analysts and investors will be held at 8.30am today. To access this call please dial +44 (0) 1452 542300; Passcode 4465820. The call will be available for replay from later today until 3 July 2007 on +44 (0) 1452 550000; Passcode 4465820#.

For further information, please contact:

 

 

Tel: +44 (0) 20 7368 2336

Mob: +44 (0) 7989 017 979

Email: alex.dee@misys.com