Misys Plc has warned that revenue for the half year to November 30 is likely to be 10% below last year’s level after trading conditions turned out to be “more demanding” than the company anticipated.
The financial and healthcare software provider said it had been hit by weak market conditions in both the banking and securities division and its financial services operation. However, its US-based healthcare systems division reported increased revenues despite adverse movements in exchange rates.
The only consolation for the UK’s largest software company is indications that customers plan to increase spending, particularly in the banking and securities division where revenue slumped 13% in the first half. While it sees evidence that bank IT budgets are starting to grow again after a period of contraction, it said that banks remain cautious in initiating larger IT projects.
On the healthcare side, it expects revenue to be 4% above last year’s level, and said the improvement would have been better but for the decline in value of the dollar.
Misys’ financial services division has been the worst performing part of its business and revenue is expected to show a 16% decline, due to the continued weakness in its independent financial adviser network business.
The one piece of good news for the company has been agreement with various revenue authorities, particularly in the US, covering a number of previous years. As a result it will be able to reduce provisions for taxation by 15m pounds ($26.4m) and this will be added to the depleted first-half profit.
This article is based on material originally produced by ComputerWire.