The statement that follows is in line with our policy of issuing regular updates on trading, for the previous six months, shortly after the end of the first half and full year. The figures in this statement are unaudited. As usual, the Group will comment on the trading outlook when the half-year results are announced on 23 January 2003. Within this statement all comments to operating profit are pre goodwill and the exceptional items reported last year.

Trading since the AGM has been in line with our expectations and is consistent with the expectation that we gave then.

The Group’s performance has benefited from the strength and diversity of its business activities. Overall Group revenues increased significantly in the first half of the year. Although weak market conditions in the Banking and Securities Division resulted in reduced revenues in this Division, both Misys Healthcare Systems and the Financial Services Division achieved revenues significantly ahead of the same period last year. Overall operating margins before redundancy costs are expected to be slightly ahead of the same period last year, due to higher margins in both the Banking and Securities and Financial Services Divisions and despite slightly reduced margins (mainly due to mix) in Misys Healthcare Systems.

Total divisional revenues were down 9% on the equivalent period last year reflecting the weak market conditions since April 2001. However, net margins in the first half are expected to be slightly ahead of those in the comparable period due to the cost reduction measures that we took last year.

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.

Information on revenues and order intake for the first six months of the financial year is as follows.

Initial licence fee (ILF) order intake at £32m was 22% below the same period last year, while ILF taken to revenue was lower 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. More significantly, the level of professional services has been disproportionately affected by cut-backs in IT budgets.

We have continued to keep our cost base under review and during the first half took further action to reduce our costs in the Asset Management and Securities Trading businesses. The one-off cost of this action, which totals £1.4m, will be charged to operating profit in the first half. In light of the current levels of activity, particularly in the area of professional services, we have commenced a review of staffing levels within other areas of the Banking and Securities Division. The redundancy costs arising from this review will be charged against second half operating profits and will be quantified when we announce our first half results in January 2003.

Operating profit, before the redundancy costs of £1.4m noted above, is expected to be broadly in line with last year's operating profit in the first half of £28.1m (which was stated before the exceptional costs of £10.1m).

Results in Misys Healthcare Systems benefited from the inclusion of Hospital Systems (formerly Sunquest) for the full six months compared with four months in the equivalent period last year.

Overall, demand remains strong across all product areas. Order intake rose by 17% on a comparable basis (at constant exchange rates and excluding the benefit of the extra two months’ contribution from Hospital Systems). Revenue growth, again on a comparable basis, was 9%. Movements in exchange rates since the equivalent period last year have adversely affected reported revenue and profits by approximately £11m and £2m respectively in the current half.

Information on revenues and order intake for the first six months of the financial year is set out below.

As noted above, overall reported revenues for Misys Healthcare Systems for the first half were 13% above the comparable period last year. Net margins for the first six months are expected to be about 90% of those for the comparable period mainly due to the mix effect of including a full six months for Hospital Systems this year compared with only four months last year.

Revenues and profits in the Financial Services Division were, as expected, significantly ahead of last year mainly due to the acquisition of DBS and the benefit of the funding of the AssureWeb portal by the providers. Overall revenues were 17% ahead of last year. On a comparable basis revenues in the Life and Pensions businesses were 8% lower than last year. The ongoing General Insurance business has delivered another good performance. Margins within the Financial Services Division are expected to be broadly in line with those achieved in the second half of last year, which also benefited from the additional funding of the AssureWeb portal by the providers.