Investments in BankFusion and the acquisition of Sophis are paying off for Misys, resulting in a healthy set of full year results for the year ending 31 May 2011. But they have not tempted the company to alter its medium-term revenue growth targets for the two years to 31 May 2013 of annual revenue growth of 5-8%. Misys did not disclose information about how or whether the offer for acquisition by Fidelity National Information Services (see here) was progressing in its published financial statement.
Misys has committed heavily to banking, and the BankFusion product in particular, and is seeing momentum within the banking division. “Banking contributed significant revenues for first time” said chief executive Mike Lawrie. 27 new customers adopted BankFusion, taking the total to 40. There were 26 new sales in TransactionBanking. Together the two products contributed 45% of banking order intake, up from 22% in the previous year.
Sophis, the capital markets platform it acquired in February is turning out to be a good purchase. It contributed to Misys during the Q4 period and generated healthy revenue of £16.8m, up from £12.7m the previous year (before it came into the Misys portfolio). Adjusted profits were up substantially from £5.6m from £2.2m but order intake was just 1% up.
Misys sold off the Allscripts healthcare division during the year as part of its strategy to become a pure play financial services software provider and proceeds were £988.5m after fees, delivering a one off profit of £606.2m after fees and costs.
Overall the company had a good year, with H2 faring somewhat better than H1, a situation that was evident at the end of Q3 (see Misys momentum picks up in Q3). Revenue for the full year was £370m, up 4% on the previous year, but with greater acceleration (8%) in H2. Order intake for the year was up 3% to £213m. Adjusted profit was £72m, a 12% increase, which met expectations. The pipeline is interesting because 41% of orders are for solutions that have been developed over last two years, where previously it was from 28% - clearly the investment in R&D (19% during the year) is paying off.
In what is becoming a familiar story, growth is coming from Asia, Latin America, Africa and the Middle East.
The transition that started in 2007 is still ongoing. It looked like the end might have been in sight, were it not for the Fidelity offer which for the moment has obscured Misys’s future path.