INTERIM MANAGEMENT STATEMENT
Third quarter total order intake up 29%, group revenue up 12% and adjusted operating profit up 166%
Misys plc, the global application software and services company, today (18 March 2008) issues the following unaudited Interim Management Statement, as required by the UK Listing Authority’s Disclosure and Transparency Rules.
KEY HIGHLIGHTS
- The proposed combination of Allscripts and Misys Healthcare announced today (see separate announcement) will create a leader in physician solutions
- Continuing to reinvest in product development – Misys BankFusion remains on track
- Strategic partnership with Digital China
- Continued progress reflected in our financial results – revenue growth ahead of plans
FINANCIAL PERFORMANCE
On a like for like basis1
- Total order intake for Q3 up 29%: £54m (2007: £41m)
- Total order intake for YTD4 up 8%: £163m (2007: £150m)
- ILF revenue for Q3 up 35%: £22m (2007: £16m)
- ILF revenue for YTD4 up 5%: £70m (2007: £67m)
- Group revenue for Q3 up 12%: £114m (2007: £102m)
- Group revenue YTD4 up 6%: £345m (2007: £326m)
- Operating profit for Q3 up 166%: £15m (2007: £6m)
- Operating profit for YTD4 up 52%: £51m (2007: £34m)
On an as reported basis
- Adjusted basic earnings per share2 for Q3 2.5p (2007: 1.9p)
- Adjusted basic earnings per share2 for YTD4 8.9p (2007: 8.2p)
- Adjusted basic earnings per share from continuing operations3 for Q3 2.5p (2007: 0.5p)
- Adjusted basic earnings per share from continuing operations3 for YTD 7.7p (2007: 3.9p)
- Net funds: £29m
MIKE LAWRIE, CHIEF EXECUTIVE COMMENTED:
“This month marks the one year anniversary of announcing the Misys Turnaround Strategy. Our results today are another data point demonstrating that we are executing successfully against our strategy and laying firm foundations for future growth. This positive set of results is a credit to our team who have embraced the need to deliver results for our customers and shareholders.
Today we’ve also announced a transaction that will enable Misys to capitalise on the fundamental shift taking place in the high growth, ambulatory healthcare sector where innovative technology can improve the delivery of care. This is a transformational step for our healthcare business and should accelerate growth.”
PRESENTATION AND WEBCAST FOR INVESTORS AND ANALYSTS
A presentation to investors and analysts will be held today at 9.00am (GMT) at Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB.
A live webcast of the presentation to analysts will be available on the Company’s website at www.misys.com from 9.00am (GMT) today and will be available to view on demand from approximately 2.00pm (GMT).
A listen only dial in facility will also be available. To access this please dial +44 (0) 20 8609 1270.
An interview with Mike Lawrie, Chief Executive will be available from 7.00am (GMT) on www.misys.com and on www.cantos.com.
ANALYST / INVESTOR ENQUIRIES
Alex Dee
Tel: +44 (0) 20 7368 2336
Mob: +44 (0) 7989 017 979
Email: alex.dee@misys.com
MEDIA ENQUIRIES
Carl Gibson
Tel: +44 (0) 20 7368 2344
Mob: +44 (0) 782 523 6473
Email: carl.gibson@misys.com
ABOUT MISYS PLC
Misys plc (FTSE: MSY.L), provides integrated, comprehensive solutions that deliver significant results to organisations in the financial services and healthcare industries. We maximise value for our customers by combining our deep knowledge of their business with our commitment to their success.
In banking and treasury and capital markets, Misys is a market leader, with over 1,200 customers, including all of the world’s top 50 banks. In healthcare, Misys is a market leader, serving more than 110,000 physicians in 18,000 practice locations and 600 home care providers. Misys employs around 4,500 people who serve customers in more than 120 countries.
We aspire to be the world’s best application software and services company, delivering results for the most important industries in the world.
Misys: Experience, Solutions, Results
NOTES TO FINANCIAL PERFORMANCE
¹ Excludes exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles, translation exchange differences recycled from reserves and the impact of acquisitions and disposals and is stated at constant exchange rates.
² Excludes exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles and the impact of translation exchange differences recycled from reserves.
³ Excludes the results from discontinued operations, exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles and the impact of translation exchange differences recycled from reserves.
4 YTD – Year-to-date refers to the nine months ended 29 February (28 February for prior year)
FINANCIAL SUMMARY
The information in this section is presented on an as reported basis.
Group revenue for the three months ended 29 February 2008 was £114m, up 9% compared with the same period last year. Divisional revenues were: Banking £35m, up 25%; Treasury and Capital Markets £31m, up 13%; and Healthcare £48m, down 3%.
Group revenue for the nine months ended 29 February 2008 was £345m, up 3% compared with the same period last year. Revenues by division were: Banking £110m, up 11%; Treasury & Capital Markets £94m, up 7%; and Healthcare £141m, down 4%.
The Group was in a net funds position of £29m.
GROUP OVERVIEW
In January, we signed two significant new partnerships as part of our partnership strategy. One is with China’s biggest financial information technology service provider, Digital China Financial Software. We signed a strategic cooperation agreement with Digital China to deliver a new, hosted, banking solution targeted at the estimated 30,000 small and medium-sized banks in China. The other partnership is with Symphony Services, the leader in global product engineering services. We selected Symphony as a strategic development partner to strengthen our product development capabilities within the context of Misys’ flexible sourcing model for development. We will work together to improve flexibility, efficiency and time-to-market. Our Misys BankFusion development remains on track.
Today we announced that Misys plc and Allscripts Inc have reached agreement to create, subject inter alia to shareholder and regulatory approval, a leading provider of physician solutions by merging Misys’s healthcare division with Allscripts. Following the completion of the Transaction the enlarged merged healthcare company will be owned 54.5% by Misys and 45.5% by existing Allscripts shareholders calculated on a fully diluted basis. Misys will continue to own 100% of its existing Banking and Treasury & Capital Markets divisions. Further details can be found in the separate press release issued this morning.
OUTLOOK
In our interim results statement this January we stated that we continue to make good progress with our market leading solutions despite the difficulties facing some institutions from global credit issues. To date we have not seen any changes to demand for our products and we believe this is confirmed by our order intake. We expect full year group revenue growth of between 2%-4% which equates to a range of £479m to £488m (2007: £469.7m) and a Group adjusted operating margin of circa 15%. This is ahead of the plan laid out at the Misys Turnaround presentation in March 2007.
BUSINESS PERFORMANCE AND FINANCIAL REVIEW
The information in this section is presented on a like for like basis. The like for like results are stated before exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles, translation exchange differences recycled from reserves and the impact of acquisitions and disposals in the current and prior periods. All figures are quoted in sterling using average exchange rates for the nine months ended 29 February 2008.
Overview
Revenue from continuing operations for Q3 at £114m was 12% above last year with Banking showing a 24% increase, Treasury & Capital Markets a 15% increase and Healthcare a 3% increase in revenues. Operating profit at £15m was 166% above the same period last year with an increase in operating margin from 6% to 14%.
Revenue from continuing operations for the nine months ended 29 February at £345m was 6% above last year with Banking showing a 10% increase, Treasury & Capital Markets a 9% increase and Healthcare a 1% increase in revenues. Operating profit at £51m was 52% above the same period last year with an increase in operating margin from 10% to 15%.
Misys Banking
Trading performance
|
all figures in £ millions
|
Q3 2007/08
|
Q3 2006/07
|
Change
|
YTD
2007/08 |
YTD
2006/07 |
Change
|
|
Total order intake
|
15
|
10
|
43%
|
52
|
47
|
10%
|
|
ILF
|
9
|
5
|
78%
|
27
|
24
|
14%
|
|
Global services
|
6
|
5
|
9%
|
25
|
23
|
5%
|
|
|
|
|
|
|
|
|
|
Revenue
|
35
|
28
|
24%
|
110
|
100
|
10%
|
|
ILF
|
8
|
4
|
95%
|
27
|
23
|
16%
|
|
Maintenance
|
19
|
18
|
5%
|
56
|
54
|
4%
|
|
Global services
|
8
|
6
|
34%
|
27
|
23
|
17%
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit
|
3
|
(3)
|
|
11
|
4
|
156%
|
|
Operating margin
|
9%
|
(12%)
|
|
10%
|
4%
|
|
Total revenue in Q3 increased by 24% to £35m and total order intake increased by 43% to £15m compared to Q3 last year. ILF revenues for the quarter increased by 95% to £8m and ILF order intake increased by 78% to £9m as compared to Q3 last year.
Global services revenue of £8m increased by 34% and global services order intake of £6m increased by 9% compared to Q3 last year. Maintenance revenue in the quarter increased by 5% to £19m compared to Q3 last year.
Operating profit at £3m reflects an operating margin of 9%.
Total revenue for the nine months ended 29 February 2008 at £110m was 10% ahead of last year. Total order intake at £52m was up 10% from the comparable period last year. ILF revenue for the nine months was £27m up 16% and the ILF order intake at £27m was up 14% compared to the same period last year.
Global services revenue for the nine months of £27m increased by 17%. Global services order intake was £25m up 5% on the comparable period. Maintenance revenue for the nine months at £56m was 4% higher than the same period last year.
Operating profit at £11m reflects an operating margin of 10%.
Misys Treasury & Capital Markets
Trading performance
|
all figures in £ millions
|
Q3 2007/08
|
Q3 2006/07
|
Change
|
YTD
2007/08 |
YTD
2006/07 |
Change
|
|
Total order intake
|
12
|
8
|
46%
|
39
|
35
|
11%
|
|
ILF
|
8
|
3
|
135%
|
21
|
21
|
0%
|
|
Global services
|
4
|
5
|
(14%)
|
18
|
14
|
27%
|
|
|
|
|
|
|
|
|
|
Revenue
|
31
|
27
|
15%
|
94
|
86
|
9%
|
|
ILF
|
8
|
6
|
32%
|
25
|
25
|
1%
|
|
Maintenance
|
14
|
13
|
7%
|
40
|
39
|
6%
|
|
Global services
|
6
|
5
|
23%
|
19
|
14
|
37%
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit
|
3
|
5
|
(36%)
|
17
|
17
|
(0%)
|
|
Operating margin
|
10%
|
18%
|
|
18%
|
20%
|
|
Total revenue in Q3 increased by 15% to £31m and total order intake increased by 46% to £12m compared to Q3 last year. ILF revenues for the quarter increased by 32% to £8m and ILF order intake increased by 135% to £8m as compared to Q3 last year.
Global services revenue of £6m increased by 23% and global services order intake of £4m decreased by 14% compared to Q3 last year due to timing issues. Maintenance revenue in the quarter increased by 7% to £14m compared to Q3 last year.
Operating profit at £3m reflects an operating margin of 10% as we continue to invest in our products and global services business.
Total revenue for the nine months ended 29 February 2008 at £94m was 9% ahead of last year. Total order intake at £39m was up 11% from the comparable period last year. ILF revenue for the nine months was up 1% at £25m and the ILF order intake was flat at £21m compared to the same period last year.
Global services revenue for the nine months of £19m increased by 37%. Global services order intake was £18m up 27% on the comparable period continuing to show strong performance. Maintenance revenue for the nine months at £40m was 6% higher than the same period last year.
Operating profit at £17m reflects an operating margin of 18%, a reduction of 2% reflecting reinvestment in the business to drive long term revenue growth.
Misys Healthcare
Trading performance
|
all figures in £ millions
|
Q3 2007/08
|
Q3 2006/07
|
Change
|
YTD
2007/08 |
YTD
2006/07 |
Change
|
|
Total order intake
|
27
|
23
|
17%
|
72
|
68
|
5%
|
|
ILF
|
6
|
5
|
25%
|
13
|
15
|
(16%)
|
|
Misys MyWay (ASP)
|
2
|
-
|
-%
|
4
|
-
|
-%
|
|
Global services
|
3
|
3
|
12%
|
8
|
9
|
(12%)
|
|
Payerpath
|
16
|
15
|
4%
|
47
|
44
|
8%
|
|
|
|
|
|
|
|
|
|
Revenues
|
48
|
47
|
3%
|
141
|
140
|
1%
|
|
ILF
|
6
|
6
|
(2%)
|
18
|
19
|
(4%)
|
|
Maintenance
|
18
|
17
|
5%
|
53
|
50
|
6%
|
|
Transaction processing
|
18
|
17
|
3%
|
54
|
51
|
6%
|
|
Global services
|
3
|
3
|
(3%)
|
10
|
11
|
(11%)
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit
|
10
|
6
|
67%
|
28
|
17
|
60%
|
|
Operating margin
|
20%
|
13%
|
|
20%
|
12%
|
|
Total revenue for the quarter increased by 3% to £48m and total order intake increased by 17% to £27m compared to Q3 last year. ILF revenues for the quarter decreased by 2% to £6m and ILF order intake increased by 25% to £6m as compared to Q3 last year. Misys MyWay, our new Software as a Service solution for the smaller physician offices, had order intake of £2m.
Global services revenue of £3m decreased by 3% and global services order intake increased by 12% to £3m as compared to Q3 last year. We have begun to see the benefit from the recent appointment of a new head of Global Services for Healthcare. Maintenance revenue in the quarter increased by 5% to £18m as compared to Q3 last year. Revenue from transaction processing increased by 3% to £18m.
Operating profit at £10m reflects an operating margin of 20%.
Total revenue for the nine months ended 29 February 2008 at £141m was ahead of the same period last year. Total order intake was £72m up 5% on the comparable period last year. We are now beginning to see some success following the investments we have made in our products, sales team and processes.
While ILF revenue at £18m was 4% below the same period last year the trend is improving. ILF order intake was £13m, down 16% on the same period last year also with an improving trend. Misys MyWay, launched in late October to fill a portfolio gap with small physicians practices, delivered order intake of £4m, with customers responding positively to the new offering.
Global services revenue was £10m down 11%. Global services order intake was £8m, down 12% on the comparable period.
Transaction services revenue grew by 6% to £54m driven by the continued roll out of our Payerpath solution. Payerpath order intake was £47m, up 8% from the previous comparable period.
Maintenance revenue is showing good growth at £53m, 6% ahead of the same period last year, confirming the stability of the base.
Operating profit at £28m was 60% ahead of last year, reflecting an operating margin of 20% which increased from 12% in the same period last year. We expect the full year Healthcare margin to be around 15% as we reinvest in the business to drive future revenue growth.
Misys Global Services
Total revenue for the quarter, included in the business units above, was £17m up 21%.
Total revenue for the nine months, included in the business units above, was £56m up 16%.
NOTES
These Notes are provided to assist assessment of the performance of the Group from this trading statement.
All figures below are unaudited and are prepared in accordance with IFRS. The data below has been provided on both an as reported basis and on a like for like basis. Adjusted operating profit, margin and EPS exclude exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles and the impact of translation differences recycled from reserves.
The like for like results exclude the results of the businesses disposed of, those classified as discontinued operations (Diagnostics, CPR and Sesame) and the incremental benefit of acquisitions and are quoted in sterling using average exchange rates for the nine months ending 29 February 2008. The impact of excluding the acquisitions from the like to like numbers was to increase the adjusted operating profit of Treasury & Capital Markets by £1m for the current year to date and an immaterial decrease to the profit of Banking. There was no impact on revenue or total order intake and all further differences between the as reported and like for like figures are as a result of restating the prior year results using current year exchange rates.
Continuing operations
|
|
Q3
|
|
Year to date
|
|||||||||||||||
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
|||||||||||
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|||
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|||
|
Total order intake
|
54
|
42
|
25%
|
|
54
|
41
|
29%
|
|
163
|
156
|
5%
|
|
163
|
150
|
8%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Group total
|
114
|
104
|
9%
|
|
114
|
102
|
12%
|
|
345
|
335
|
3%
|
|
345
|
326
|
6%
|
|||
|
Banking
|
35
|
28
|
25%
|
|
35
|
28
|
24%
|
|
110
|
99
|
11%
|
|
110
|
100
|
10%
|
|||
|
Treasury & Capital Markets
|
31
|
27
|
13%
|
|
31
|
27
|
15%
|
|
94
|
88
|
7%
|
|
94
|
86
|
9%
|
|||
|
Healthcare
|
48
|
49
|
(3%)
|
|
48
|
47
|
3%
|
|
141
|
148
|
(4%)
|
|
141
|
140
|
1%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adjusted operating profit
|
15
|
6
|
151%
|
|
15
|
6
|
166%
|
|
51
|
35
|
46%
|
|
51
|
34
|
52%
|
|||
|
Margin
|
14%
|
6%
|
|
|
14%
|
6%
|
|
|
15%
|
10%
|
|
|
15%
|
10%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adjusted EPS (pence)
|
2.5
|
0.5
|
|
|
|
|
|
|
7.7
|
3.9
|
|
|
|
|
|
|||
Banking
|
|
Q3
|
|
Year to date
|
|||||||||||||||
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
|||||||||||
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|||
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|||
|
ORDER INTAKE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total
|
15
|
10
|
43%
|
|
15
|
10
|
43%
|
|
52
|
47
|
11%
|
|
52
|
47
|
10%
|
|||
|
ILF
|
9
|
5
|
78%
|
|
9
|
5
|
78%
|
|
27
|
24
|
15%
|
|
27
|
24
|
14%
|
|||
|
Global services
|
6
|
5
|
10%
|
|
6
|
5
|
9%
|
|
25
|
23
|
7%
|
|
25
|
23
|
5%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total revenue
|
35
|
28
|
25%
|
|
35
|
28
|
24%
|
|
110
|
99
|
11%
|
|
110
|
100
|
10%
|
|||
|
Initial Licence Fees (ILF)
|
8
|
4
|
96%
|
|
8
|
4
|
95%
|
|
27
|
23
|
17%
|
|
27
|
23
|
16%
|
|||
|
Maintenance
|
19
|
18
|
6%
|
|
19
|
18
|
5%
|
|
56
|
53
|
5%
|
|
56
|
54
|
4%
|
|||
|
Global services
|
8
|
6
|
35%
|
|
8
|
6
|
34%
|
|
27
|
23
|
18%
|
|
27
|
23
|
17%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adjusted operating profit
|
3
|
(3)
|
|
|
3
|
(3)
|
|
|
11
|
5
|
135%
|
|
11
|
4
|
156%
|
|||
|
Margin
|
9%
|
(12%)
|
|
|
9%
|
(12%)
|
|
|
10%
|
5%
|
|
|
10%
|
4%
|
|
|||
Treasury & Capital Markets
|
|
Q3
|
|
Year to date
|
||||||||||||||
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
|
AS REPORTED
|
|
LIKE FOR LIKE
|
||||||||||
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
|
07/08
|
06/07
|
|
||
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
|
£m
|
£m
|
Change
|
||
|
ORDER INTAKE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Total
|
12
|
8
|
45%
|
|
12
|
8
|
46%
|
|
39
|
37
|
9%
|
|
39
|
35
|
11%
|
||
|
ILF
|
8
|
3
|
135%
|
|
8
|
3
|
135%
|
|
21
|
22
|
(1%)
|
|
21
|
21
|
0%
|
||
|
Global services
|
4
|
5
|
(14%)
|
|
4
|
5
|
(14%)
|
|
18
|
15
|
26%
|
|
18
|
14
|
27%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Total revenue
|
31
|
27
|
13%
|
|
31
|
27
|
15%
|
|
94
|
88
|
7%
|
|
94
|
86
|
9%
|
||
|
Initial Licence Fees (ILF)
|
8
|
6
|
29%
|
|
8
|
6
|
32%
|
|
25
|
25
|
(1%)
|
|
25
|
||||