The banking industry may be on the long road to recovery, but that's not yet translated into growth for Misys' banking software division, which saw sales fall 11 per cent to £79m in the latest six-month trading period. This means that, stripped of the benefits of the merger of its healthcare division with Allscripts last October, pro forma group sales at constant exchange rates slipped by a percentage point.
However, the headline figures masked yet another period of improvement from the software group. Underlying operating profit was up 11 per cent to £62m, thanks to tight cost control. That was despite investment in new banking products to address the industry's post-credit crunch needs. And while this investment hasn't yet stemmed the decline in order intake in the banking division - which fell 22 per cent - strong contract wins in its treasury and capital markets and Allscripts divisions meant underlying group order intake climbed 10 per cent to £240m. Misys said that this will help it generate second-half revenue growth of between 5 and 8 per cent.
Broker Noble expects full-year pre-tax profits before exceptionals of £113.6m and adjusted EPS of 12.7p (£86.3m and 9.7p in 2009).
MISYS (MSY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 219p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 218-219p | 12-MONTH HIGH: | 239p | LOW: 98p |
| DIVIDEND YIELD: | nil | PE RATIO: | 41 | |
| NET ASSET VALUE: | 51p* | NET DEBT: | 31% | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 280 | 67.0 | 14.7 | nil |
| 2009 | 361 | 40.4 | 4.0 | nil |
| % change | +29 | -40 | -73 | - |
*Includes intangible assets of £487m, or 89p a share | ||||
