Misys Plc has been protected from the downturn by the diversity of markets it serves, and the UK’s largest software vendor said that trading has been in line with expectations with a “significant” increase in first-half revenue.
In a trading update, the London, UK-based company said that while revenue in its banking and securities division showed a 9% fall as a result of the weak market conditions, demand remain strong at its US-based healthcare systems, with revenue up 9% while the order intake rose by 17%. The financial services division also achieved 17% growth.
The revenue growth will feed through to the bottom line as Misys says that operating margins before severance costs are expected to be slightly ahead of last year due to higher margins in both banking and securities and financial services though there will be slightly reduced margins, due to the product mix in healthcare.
In banking and securities, Misys says that customers remain cautious about the timing and placing of orders. Though the conversion of prospects to orders has been below expectations, it says it has signed orders in all sectors of the market and the pipeline remains robust. So Misys is taking the view that the market has neither improved nor deteriorated.
While the initial license fee order intake was down 22% at 32m pounds ($50.9m), the closing order book was 4% higher at 25m pounds ($39.5m). It expects operating profit before severance costs to be broadly in line with the 28.1m pounds ($44.7m) achieved before exceptional charges last year.
Boosted by a full six-month contribution from its June 2001 $404m purchase of Sunquest Information Systems Inc, its healthcare systems division has seen demand remain strong across all product areas. The order intake rose 25% to 26m pounds ($41.3m) and the closing order book was 39% higher at 32m pounds ($50.9m).