(By Anthony Miller). Misys filled in the detail presaged in its upbeat trading update earlier this month (see Misys moves forwards at half-time) with a generally good – but mixed – set of half-time results (to 30th Nov. ’08) reflecting its ‘business of three halves’.
Misys’ core banking business (30% group revs) showed the best results in terms of new licence revenues – up 14% like-for like (LFL) – a great result. Maintenance revenues rose 1% and services by 5%, both pretty much what you would expect in the current climate. Margins jumped from 12% to 17%. Much play was given to Misys’ partnership with Indian SI HCL, who Misys is using to drive emerging market sales and implementations with some early successes.
The Treasury and Capital markets (TCM) business (26% group revs) took an 8% LFL hit on licence revenues (1H08 was a particularly strong period for TCM) but saw maintenance revs rise 9% and services by a whopping +17%. However, services order intake fell 5%, so we wouldn’t expect the same growth in H2. Margins tricked up from 19% to 21%.
Allscripts-Misys Healthcare Solutions Inc – to give the merged healthcare business its full title – is a bit more complex due to the slight misalignment of reporting periods between Allscripts and Misys. It also has more working parts. Broadly speaking, licence and ASP revs grew 3%, maintenance +11%, transaction processing +7%, services +28% (!!) and hardware +12%, all LFL. Margins were up from 15% to 17%.
Misys CEO Mike Lawrie is pretty bullish about these results – with some justification I think – and remains ‘optimistic’ about achieving FY results in line with market expectations.