UK software house Misys has posted a 22% drop in underlying profits for the six months ending November 2003 and warned of continued weak market conditions afflicting its largest division, banking and securities.
Reporting back on a disappointing first half, Misys recorded a fall in operating profit and revenues in both banking and securities and financial services, more than offsetting the gains achieved by its healthcare unit.
First half group revenues fell by 10% from £521m to £471m, while operating profit sank to £48 million from £62 million in the comparative period
In banking and securities, revenue was down 13%, reflecting lower than anticipated initial license fee order intake. Operating profit declined to £7m from £16m a year earlier.
In a statement, the firm says: "It appears that banks have now started to plan for increased investment in technology and systems, and that they have been setting IT budgets for 2004 at levels which show some growth on 2003. However, it is equally clear that banks remain cautious about committing to investment projects and, as we said last July, that any increase in spending will probably only come through in the latter half of calendar 2004."
Revenues in the financial services division fell by 16% against the previous year, as a result of continued weakness in the market served by Misys' IFA network business, Sesame.
At board level, the firm has announced that John Sussens is stepping down as group managing director after a 15-year tenure at Misys. "His departure is part of an orderly programme of succession planning," sates the company.
Misys' shares dropped 7.75p (3.3%) to 226 pence on the results.