REG-Misys PLC <MSY.L> Interim Management Statement
Released: 18/03/2008
RNS Number:3233Q
Misys PLC
18 March 2008
MISYS plc
INTERIM MANAGEMENT STATEMENT
(UNAUDITED)
Third quarter total order intake up 29%, group revenue up 12%
and adjusted operating profit up 166%
Misys plc, the global application software and services company, today (18 March
2008) issues the following unaudited Interim Management Statement, as required
by the UK Listing Authority's Disclosure and Transparency Rules.
KEY HIGHLIGHTS
- The proposed combination of Allscripts and Misys Healthcare announced
today (see separate announcement) will create a leader in physician solutions
- Continuing to reinvest in product development - Misys BankFusion
remains on track
- Strategic partnership with Digital China
- Continued progress reflected in our financial results - revenue growth
ahead of plans
FINANCIAL PERFORMANCE
On a like for like basis1
- Total order intake for Q3 up 29%: £54m (2007: £41m)
- Total order intake for YTD4 up 8%: £163m (2007: £150m)
- ILF revenue for Q3 up 35%: £22m (2007: £16m)
- ILF revenue for YTD4 up 5%: £70m (2007: £67m)
- Group revenue for Q3 up 12%: £114m (2007: £102m)
- Group revenue YTD4 up 6%: £345m (2007: £326m)
- Operating profit for Q3 up 166%: £15m (2007: £6m)
- Operating profit for YTD4 up 52%: £51m (2007: £34m)
On an as reported basis
- Adjusted basic earnings per share2 for Q3 2.5p (2007: 1.9p)
- Adjusted basic earnings per share2 for YTD4 8.9p (2007: 8.2p)
- Adjusted basic earnings per share from continuing operations3 for Q3
2.5p (2007: 0.5p)
- Adjusted basic earnings per share from continuing operations3 for YTD
7.7p (2007: 3.9p)
- Net funds: £29m
MIKE LAWRIE, CHIEF EXECUTIVE COMMENTED:
"This month marks the one year anniversary of announcing the Misys Turnaround
Strategy. Our results today are another data point demonstrating that we are
executing successfully against our strategy and laying firm foundations for
future growth. This positive set of results is a credit to our team who have
embraced the need to deliver results for our customers and shareholders.
Today we've also announced a transaction that will enable Misys to capitalise on
the fundamental shift taking place in the high growth, ambulatory healthcare
sector where innovative technology can improve the delivery of care. This is a
transformational step for our healthcare business and should accelerate growth."
PRESENTATION AND WEBCAST FOR INVESTORS AND ANALYSTS
A presentation to investors and analysts will be held today at 9.00am (GMT) at
Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB.
A live webcast of the presentation to analysts will be available on the
Company's website at www.misys.com from 9.00am (GMT) today and will be available
to view on demand from approximately 2.00pm (GMT).
A listen only dial in facility will also be available. To access this please
dial +44 (0) 20 8609 1270.
An interview with Mike Lawrie, Chief Executive will be available from 7.00am
(GMT) on www.misys.com and on www.cantos.com.
ANALYST / INVESTOR ENQUIRIES MEDIA ENQUIRIES
Alex Dee Carl Gibson
Tel: +44 (0) 20 7368 2336 Tel: +44 (0) 20 7368 2344
Mob: +44 (0) 7989 017 979 Mob: +44 (0) 782 523 6473
Email: alex.dee@misys.com Email: carl.gibson@misys.com
ABOUT MISYS PLC
Misys plc (FTSE: MSY.L), provides integrated, comprehensive solutions that
deliver significant results to organisations in the financial services and
healthcare industries. We maximise value for our customers by combining our
deep knowledge of their business with our commitment to their success.
In banking and treasury and capital markets, Misys is a market leader, with over
1,200 customers, including all of the world's top 50 banks. In healthcare,
Misys is a market leader, serving more than 110,000 physicians in 18,000
practice locations and 600 home care providers. Misys employs around 4,500
people who serve customers in more than 120 countries.
We aspire to be the world's best application software and services company,
delivering results for the most important industries in the world.
Misys: Experience, Solutions, Results
NOTES TO FINANCIAL PERFORMANCE
(1) Excludes exceptional items, gains and losses on embedded derivatives,
amortisation of acquired intangibles, translation exchange differences
recycled from reserves and the impact of acquisitions and disposals and is
stated at constant exchange rates.
(2) Excludes exceptional items, gains and losses on embedded derivatives,
amortisation of acquired intangibles and the impact of translation exchange
differences recycled from reserves.
(3) Excludes the results from discontinued operations, exceptional items,
gains and losses on embedded derivatives, amortisation of acquired
intangibles and the impact of translation exchange differences recycled
from reserves.
(4) YTD - Year-to-date refers to the nine months ended 29 February (28
February for prior year)
FINANCIAL SUMMARY
The information in this section is presented on an as reported basis.
Group revenue for the three months ended 29 February 2008 was £114m, up 9%
compared with the same period last year. Divisional revenues were: Banking
£35m, up 25%; Treasury and Capital Markets £31m, up 13%; and Healthcare £48m,
down 3%.
Group revenue for the nine months ended 29 February 2008 was £345m, up 3%
compared with the same period last year. Revenues by division were: Banking
£110m, up 11%; Treasury & Capital Markets £94m, up 7%; and Healthcare £141m,
down 4%.
The Group was in a net funds position of £29m.
GROUP OVERVIEW
In January, we signed two significant new partnerships as part of our
partnership strategy. One is with China's biggest financial information
technology service provider, Digital China Financial Software. We signed a
strategic cooperation agreement with Digital China to deliver a new, hosted,
banking solution targeted at the estimated 30,000 small and medium-sized banks
in China. The other partnership is with Symphony Services, the leader in
global product engineering services. We selected Symphony as a strategic
development partner to strengthen our product development capabilities within
the context of Misys' flexible sourcing model for development. We will work
together to improve flexibility, efficiency and time-to-market. Our Misys
BankFusion development remains on track.
Today we announced that Misys plc and Allscripts Inc have reached agreement to
create, subject inter alia to shareholder and regulatory approval, a leading
provider of physician solutions by merging Misys's healthcare division with
Allscripts. Following the completion of the Transaction the enlarged merged
healthcare company will be owned 54.5% by Misys and 45.5% by existing Allscripts
shareholders calculated on a fully diluted basis. Misys will continue to own
100% of its existing Banking and Treasury & Capital Markets divisions. Further
details can be found in the separate press release issued this morning.
OUTLOOK
In our interim results statement this January we stated that we continue to make
good progress with our market leading solutions despite the difficulties facing
some institutions from global credit issues. To date we have not seen any
changes to demand for our products and we believe this is confirmed by our order
intake. We expect full year group revenue growth of between 2%-4% which equates
to a range of £479m to £488m (2007: £469.7m) and a Group adjusted operating
margin of circa 15%. This is ahead of the plan laid out at the Misys Turnaround
presentation in March 2007.
BUSINESS PERFORMANCE AND FINANCIAL REVIEW
The information in this section is presented on a like for like basis. The like
for like results are stated before exceptional items, gains and losses on
embedded derivatives, amortisation of acquired intangibles, translation exchange
differences recycled from reserves and the impact of acquisitions and disposals
in the current and prior periods. All figures are quoted in sterling using
average exchange rates for the nine months ended 29 February 2008.
Overview
Revenue from continuing operations for Q3 at £114m was 12% above last year with
Banking showing a 24% increase, Treasury & Capital Markets a 15% increase and
Healthcare a 3% increase in revenues. Operating profit at £15m was 166% above
the same period last year with an increase in operating margin from 6% to 14%.
Revenue from continuing operations for the nine months ended 29 February at
£345m was 6% above last year with Banking showing a 10% increase, Treasury &
Capital Markets a 9% increase and Healthcare a 1% increase in revenues.
Operating profit at £51m was 52% above the same period last year with an
increase in operating margin from 10% to 15%.
Misys Banking
Trading performance
all figures in £ millions Q3 2007/08 Q3 2006/07 Change YTD YTD Change
2007/08 2006/07
Total order intake 15 10 43% 52 47 10%
ILF 9 5 78% 27 24 14%
Global services 6 5 9% 25 23 5%
Revenue 35 28 24% 110 100 10%
ILF 8 4 95% 27 23 16%
Maintenance 19 18 5% 56 54 4%
Global services 8 6 34% 27 23 17%
Adjusted operating profit 3 (3) 11 4 156%
Operating margin 9% (12%) 10% 4%
Total revenue in Q3 increased by 24% to £35m and total order intake increased by
43% to £15m compared to Q3 last year. ILF revenues for the quarter increased by
95% to £8m and ILF order intake increased by 78% to £9m as compared to Q3 last
year.
Global services revenue of £8m increased by 34% and global services order intake
of £6m increased by 9% compared to Q3 last year. Maintenance revenue in the
quarter increased by 5% to £19m compared to Q3 last year.
Operating profit at £3m reflects an operating margin of 9%.
Total revenue for the nine months ended 29 February 2008 at £110m was 10% ahead
of last year. Total order intake at £52m was up 10% from the comparable period
last year. ILF revenue for the nine months was £27m up 16% and the ILF order
intake at £27m was up 14% compared to the same period last year.
Global services revenue for the nine months of £27m increased by 17%. Global
services order intake was £25m up 5% on the comparable period. Maintenance
revenue for the nine months at £56m was 4% higher than the same period last
year.
Operating profit at £11m reflects an operating margin of 10%.
Misys Treasury & Capital Markets
Trading performance
all figures in £ millions Q3 2007/08 Q3 2006/07 Change YTD YTD Change
2007/08 2006/07
Total order intake 12 8 46% 39 35 11%
ILF 8 3 135% 21 21 0%
Global services 4 5 (14%) 18 14 27%
Revenue 31 27 15% 94 86 9%
ILF 8 6 32% 25 25 1%
Maintenance 14 13 7% 40 39 6%
Global services 6 5 23% 19 14 37%
Adjusted operating profit 3 5 (36%) 17 17 (0%)
Operating margin 10% 18% 18% 20%
Total revenue in Q3 increased by 15% to £31m and total order intake increased by
46% to £12m compared to Q3 last year. ILF revenues for the quarter increased by
32% to £8m and ILF order intake increased by 135% to £8m as compared to Q3 last
year.
Global services revenue of £6m increased by 23% and global services order intake
of £4m decreased by 14% compared to Q3 last year due to timing issues.
Maintenance revenue in the quarter increased by 7% to £14m compared to Q3 last
year.
Operating profit at £3m reflects an operating margin of 10% as we continue to
invest in our products and global services business.
Total revenue for the nine months ended 29 February 2008 at £94m was 9% ahead of
last year. Total order intake at £39m was up 11% from the comparable period last
year. ILF revenue for the nine months was up 1% at £25m and the ILF order
intake was flat at £21m compared to the same period last year.
Global services revenue for the nine months of £19m increased by 37%. Global
services order intake was £18m up 27% on the comparable period continuing to
show strong performance. Maintenance revenue for the nine months at £40m was 6%
higher than the same period last year.
Operating profit at £17m reflects an operating margin of 18%, a reduction of 2%
reflecting reinvestment in the business to drive long term revenue growth.
Misys Healthcare
Trading performance
all figures in £ millions Q3 2007/08 Q3 2006/07 Change YTD YTD Change
2007/08 2006/07
Total order intake 27 23 17% 72 68 5%
ILF 6 5 25% 13 15 (16%)
Misys MyWay (ASP) 2 - -% 4 - -%
Global services 3 3 12% 8 9 (12%)
Payerpath 16 15 4% 47 44 8%
Revenues 48 47 3% 141 140 1%
ILF 6 6 (2%) 18 19 (4%)
Maintenance 18 17 5% 53 50 6%
Transaction processing 18 17 3% 54 51 6%
Global services 3 3 (3%) 10 11 (11%)
Adjusted operating profit 10 6 67% 28 17 60%
Operating margin 20% 13% 20% 12%
Total revenue for the quarter increased by 3% to £48m and total order intake
increased by 17% to £27m compared to Q3 last year. ILF revenues for the quarter
decreased by 2% to £6m and ILF order intake increased by 25% to £6m as compared
to Q3 last year. Misys MyWay, our new Software as a Service solution for the
smaller physician offices, had order intake of £2m.
Global services revenue of £3m decreased by 3% and global services order intake
increased by 12% to £3m as compared to Q3 last year. We have begun to see the
benefit from the recent appointment of a new head of Global Services for
Healthcare. Maintenance revenue in the quarter increased by 5% to £18m as
compared to Q3 last year. Revenue from transaction processing increased by 3%
to £18m.
Operating profit at £10m reflects an operating margin of 20%.
Total revenue for the nine months ended 29 February 2008 at £141m was ahead of
the same period last year. Total order intake was £72m up 5% on the comparable
period last year. We are now beginning to see some success following the
investments we have made in our products, sales team and processes.
While ILF revenue at £18m was 4% below the same period last year the trend is
improving. ILF order intake was £13m, down 16% on the same period last year
also with an improving trend. Misys MyWay, launched in late October to fill a
portfolio gap with small physicians practices, delivered order intake of £4m,
with customers responding positively to the new offering.
Global services revenue was £10m down 11%. Global services order intake was
£8m, down 12% on the comparable period.
Transaction services revenue grew by 6% to £54m driven by the continued roll out
of our Payerpath solution. Payerpath order intake was £47m, up 8% from the
previous comparable period.
Maintenance revenue is showing good growth at £53m, 6% ahead of the same period
last year, confirming the stability of the base.
Operating profit at £28m was 60% ahead of last year, reflecting an operating
margin of 20% which increased from 12% in the same period last year. We expect
the full year Healthcare margin to be around 15% as we reinvest in the business
to drive future revenue growth.
Misys Global Services
Total revenue for the quarter, included in the business units above, was £17m up
21%.
Total revenue for the nine months, included in the business units above, was
£56m up 16%.
NOTES
These Notes are provided to assist assessment of the performance of the Group
from this trading statement.
All figures below are unaudited and are prepared in accordance with IFRS. The
data below has been provided on both an as reported basis and on a like for like
basis. Adjusted operating profit, margin and EPS exclude exceptional items,
gains and losses on embedded derivatives, amortisation of acquired intangibles
and the impact of translation differences recycled from reserves.
The like for like results exclude the results of the businesses disposed of,
those classified as discontinued operations (Diagnostics, CPR and Sesame) and
the incremental benefit of acquisitions and are quoted in sterling using average
exchange rates for the nine months ending 29 February 2008. The impact of
excluding the acquisitions from the like to like numbers was to increase the
adjusted operating profit of Treasury & Capital Markets by £1m for the current
year to date and an immaterial decrease to the profit of Banking. There was no
impact on revenue or total order intake and all further differences between the
as reported and like for like figures are as a result of restating the prior
year results using current year exchange rates.
Continuing operations
Q3 Year to date
AS REPORTED LIKE FOR LIKE AS REPORTED LIKE FOR LIKE
07/08 06/07 07/08 06/07 07/08 06/07 07/08 06/07
£m £m Change £m £m Change £m £m Change £m £m Change
Total order intake 54 42 25% 54 41 29% 163 156 5% 163 150 8%
REVENUE
Group total 114 104 9% 114 102 12% 345 335 3% 345 326 6%
Banking 35 28 25% 35 28 24% 110 99 11% 110 100 10%
Treasury & Capital 31 27 13% 31 27 15% 94 88 7% 94 86 9%
Markets
Healthcare 48 49 (3%) 48 47 3% 141 148 (4%) 141 140 1%
Adjusted operating 15 6 151% 15 6 166% 51 35 46% 51 34 52%
profit
Margin 14% 6% 14% 6% 15% 10% 15% 10%
Adjusted EPS (pence) 2.5 0.5 7.7 3.9
Banking
Q3 Year to date
AS REPORTED LIKE FOR LIKE AS REPORTED LIKE FOR LIKE
07/08 06/07 07/08 06/07 07/08 06/07 07/08 06/07
£m £m Change £m £m Change £m £m Change £m £m Change
ORDER INTAKE
Total 15 10 43% 15 10 43% 52 47 11% 52 47 10%
ILF 9 5 78% 9 5 78% 27 24 15% 27 24 14%
Global services 6 5 10% 6 5 9% 25 23 7% 25 23 5%
REVENUE
Total revenue 35 28 25% 35 28 24% 110 99 11% 110 100 10%
Initial Licence Fees 8 4 96% 8 4 95% 27 23 17% 27 23 16%
(ILF)
Maintenance 19 18 6% 19 18 5% 56 53 5% 56 54 4%
Global services 8 6 35% 8 6 34% 27 23 18% 27 23 17%
Adjusted operating 3 (3) 3 (3) 11 5 135% 11 4 156%
profit
Margin 9% (12%) 9% (12%) 10% 5% 10% 4%
Treasury & Capital Markets
Q3 Year to date
AS REPORTED LIKE FOR LIKE AS REPORTED LIKE FOR LIKE
07/08 06/07 07/08 06/07 07/08 06/07 07/08 06/07
£m £m Change £m £m Change £m £m Change £m £m Change
ORDER INTAKE
Total 12 8 45% 12 8 46% 39 37 9% 39 35 11%
ILF 8 3 135% 8 3 135% 21 22 (1%) 21 21 0%
Global services 4 5 (14%) 4 5 (14%) 18 15 26% 18 14 27%
REVENUE
Total revenue 31 27 13% 31 27 15% 94 88 7% 94 86 9%
Initial Licence Fees 8 6 29% 8 6 32% 25 25 (1%) 25 25 1%
(ILF)
Maintenance 14 13 6% 14 13 7% 40 39 5% 40 39 6%
Global services 6 5 23% 6 5 23% 19 14 36% 19 14 37%
Adjusted operating 3 4 (33%) 3 5 (36%) 16 16 (2%) 17 17 (0%)
profit
Margin 10% 16% 10% 18% 17% 19% 18% 20%
Healthcare (excluding Diagnostic Information and CPR businesses)
Q3 Year to date
AS REPORTED LIKE FOR LIKE AS REPORTED LIKE FOR LIKE
07/08 06/07 07/08 06/07 07/08 06/07 07/08 06/07
£m £m Change £m £m Change £m £m Change £m £m Change
ORDER INTAKE
Total 27 24 11% 27 23 17% 72 72 (1%) 72 68 5%
ILF 6 5 19% 6 5 25% 13 16 (21%) 13 15 (16%)
Misys MyWay (ASP) 2 - -% 2 - -% 4 - -% 4 - -%
Global services 3 3 6% 3 3 12% 8 10 (17%) 8 9 (12%)
Payerpath 16 16 (1%) 16 15 4% 47 46 2% 47 44 8%
REVENUE
Total revenue 48 49 (3%) 48 47 3% 141 148 (4%) 141 140 1%
Initial Licence Fees 6 7 (8%) 6 6 (2%) 18 20 (10%) 18 19 (4%)
(ILF)
Maintenance 18 18 (1%) 18 17 5% 53 52 0% 53 50 6%
Global services 3 3 (8%) 3 3 (3%) 10 12 (16%) 10 11 (11%)
Transaction Processing 18 18 (2%) 18 17 3% 54 54 0% 54 51 6%
Adjusted operating 10 6 57% 10 6 67% 28 18 50% 28 17 60%
profit
Margin 20% 13% 20% 13% 20% 12% 20% 12%
Global Services (included within business units above)
Q3 Year to date
AS REPORTED LIKE FOR LIKE AS REPORTED LIKE FOR LIKE
07/08 06/07 07/08 06/07 07/08 06/07 07/08 06/07
£m £m Change £m £m Change £m £m Change £m £m Change
REVENUE
Group total 17 14 20% 17 14 21% 56 49 15% 56 48 16%
Banking 8 6 35% 8 6 34% 27 23 18% 27 23 17%
Treasury & Capital 6 5 23% 6 5 23% 19 14 36% 19 14 37%
Markets
Healthcare 3 3 (8%) 3 3 (3%) 10 12 (16%) 10 11 (11%)
FOREIGN EXCHANGE
The principal foreign exchange rates used by the Group are detailed in the table
below.
At 28 February 2007 At 29 February 2008
Closing Average Closing Average
US Dollar 1.9609 1.9027 1.9862 2.0115
Euro 1.4824 1.4811 1.3078 1.4229
This information is provided by RNS
The company news service from the London Stock Exchange
END
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