Thursday, 25 June 2009

Misys previews ‘improving’ FY results

(By Anthony Miller – Thursday 25th June 2009 7:45am). It was very much a case of ‘steady as she goes’ in Misys’ trading update this morning (see here) which, under the circumstances, is actually a pretty good result.

As ever, there were swings and roundabouts across Misys three businesses. Banking division saw revenues rise 5% like-for-like to £180m with orders up 9%. But the financial crisis ate into Treasury & Capital Markets (TCM) revenues to the tune of a 2% like-for-like decline to £160m, with orders down 10%.

Allscripts-Misys, the independently-listed,US-based, merged healthcare business – and now its largest division – seems to be getting back into gear, with a 5% like-for-like revenue rise to £400m (£350m as reported), with the order book up 7%. ASP licence revenues jumped 70%. CEO Mike Lawrie attributed the order momentum to the US federal stimulus package, which passed through legislation in February. I do hope this is not a ‘false dawn’ as I remain concerned about the extent to which small US physician practices can really take advantage of the grants (see Misys senses medic confusion on US stimulus package).

Services revenues across the three divisions rose 2% like-for-like to £110m but the order book took an 18% hit mainly due to difficult ‘comps’ from a major healthcare services deal the prior year. No news, though, on who is to replace Eileen McPartland as head of sales and services (see Misys sales and services chief defects to partner).

Net-net, Misys group revenues rose 3% like-for-like to £695m, with total order intake up 2%. No detail on profitability other than an overall 60bps improvement in ‘reported adjusted operating margin’ to 17%. So, as ever, the devil will be in the detail, which will be revealed in late July.

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