18 June 2008 

TRADING STATEMENT

(Unaudited) 

Misys Returns to Growth

Misys plc (FTSE: MSY.L), the global application software and services company, today, 18 June 2008, issues an unaudited trading statement for the year ended 31 May 2008.  Audited results for Misys plc will be announced in late July 2008.

PERFORMANCE HIGHLIGHTS

• Misys returns to full year growth with group revenues up approximately 6%1 

• Total Order Intake2 expected to be up approximately 8% to about £261m; with approximately 8% increase for Banking; 16% for Treasury & Capital Markets (TCM); 3% for Healthcare and 16% for Global Services

• Operating Profit3 expected to increase by approximately 36%

• Operating margin3 expected to increase by approximately 300 basis points 

• Adjusted basic earnings per share from continuing operations4  expected  to be in the range of 11.6p to 12.6p (2007: 7.5p)

• Proposed merger of Misys Healthcare with Allscripts Healthcare Solutions on track

• Completion of phase one of the Misys turnaround strategy ahead of planned timetable, with the focus now on building a growth platform

Mike Lawrie, Chief Executive, misys plc Commented:

"Our focus this year has been on executing phase one of our three phase turnaround strategy, announced in March 2007. We have taken out costs ahead of schedule, divested non-strategic assets, realigned the business around our core markets, strengthened our management team, invested in new products and services and established new partnerships to open up new high growth markets." 

"Our performance demonstrates that Misys has returned to growth, winning new customers and selling more solutions into our installed customer base, and delivering margins at the top end of the range we issued in March 2007. Satisfaction among our customers and our employees is improving, as borne out by the results of our recent customer and employee surveys. I am pleased by the execution of phase one of our turnaround plan as reflected in results for each business in the financial year just ended."

"With the business now stabilised and customer satisfaction levels improving, we are moving into the growth phase of our strategy, building a platform that will enable us to 'win more' in the marketplace. Already this year, we have signed our first customer, Standard Bank of South Africa, for BankFusion, our next generation banking platform, and we are making an impact with the new products we are investing in, such as OpicsPlus, Trade Services and our hosted Summit service. We have established two new sales regions, Middle East & Africa and India & China, focused on accelerating our penetration of the Emerging Markets region.  We are working with our new partners Digital China, HCL, IBM, SAP, Symphony Services and Wipro to access new markets and develop our solutions faster.  The proposed merger of our Healthcare business with Allscripts is on track. We look forward to successfully completing the merger, which will give us a larger customer base and a stronger product offering, making us a leader in the US IT healthcare market."

"Despite the credit crunch and liquidity issues in the financial markets, many of our customers remain unaffected, notably in Africa, Asia, the Middle East, Russia and the CIS.  Within our established markets of North America and Western Europe, many customers are seeking solutions and service support to help address cost, compliance and risk issues.  Our Banking and TCM businesses delivered revenue growth above expectations while the Global Services component of these revenues achieved double-digit growth.  This strong performance, together with our strong recurring revenues, means that the credit crisis to date has not affected our expectations for Misys."  

Further information on the results for the period under review both on an 'as reported' and like-for-like basis is contained in the Notes to this trading statement. Unless otherwise stated all figures in the paragraphs below refer to like-for-like data. Total Order Intake is recorded contracts signed during the fiscal year. Prior year amounts have been restated to reflect the gross amount of Total Order Intake.

Group Overview

• Total Order Intake2 increased approximately 8% to about £261m 

  • ILF increased approximately 4% with our new ASP product MyWay in its first year of availability

  • Global Services increased approximately 16% and Transaction Processing increased approximately 6%

• Revenues1 grew approximately 6%:

  • ILF grew approximately 3%

  • Global Services grew approximately 19%

  • Maintenance grew approximately 5% 

  • Transaction Processing grew approximately 4%

• Operating margin3 increased approximately 300 basis points to about 16% 

This statement confirms that the Misys turnaround strategy is progressing in line with expectations and is being executed across the business ahead of the original timetable. 

Banking

• Total Order Intake2 up approximately 8% to about £83m;

  • ILF up approximately 5%; to about £46m; 

  • Global Services up approximately 13%; to about £37m; 

• Revenues1 grew approximately 5%: 

  • ILF down approximately 1%; 

  • Global Services up approximately 19%; 

  • Maintenance up approximately 3%

• Operating margin3 was flat at about 12%

Our product and services strategy is progressing to plan and has been well received by customers. A number of new contracts were signed with regional banks, including Al Baraka Islamic Bank in Pakistan and Bank Soyuz in Russia, and we implemented approximately 150 solutions - referred to as 'go-lives'. In addition, we signed our first contract for Misys BankFusion in spring 2008 and expect to implement this new platform in several customer sites in the 2008/09 fiscal year.  

Treasury & Capital Markets

• Total Order Intake2 up approximately 16%; to about £73m; 

  • ILF up approximately 4%; approximately £42m; 

  • Global Services up approximately 36%; to about £31m; 

• Revenues1 grew approximately 13% 

  • ILF grew approximately 12%

  • Global Services grew approximately 41% 

  • Maintenance grew approximately 7%  

• Operating margin3 was down approximately 100 basis points to 22%. This is in line with management expectations reflecting investments made in product development as well as sales and services personnel  

Our market leading TCM products have enabled us to win 18 new name customers in a strong global market, with new names in China and India. TCM generated a greater percentage of revenues from existing clients compared with the prior two years. TCM saw many clients upgrading releases and purchasing additional modules and users. This year TCM established a hosted version of Summit for North America as an extension of previously announced European offerings, and now has several new name clients for this ASP product.  

Healthcare

• Total Order Intake2  increased by approximately 3%; to about £105m; 

  • ILF was up 1% to about £26m, including ASP of approximately £5m; (MyWay customers represent a shift from on-premise to hosted software solutions)

  • Global Services down approximately 5%; to about £15m; 

  • Transaction Processing up approximately 6%; to about £64m; 

• Revenues1 grew approximately 2%, impacted by 

  • Decreases of approximately 4% in ILF and 8% Global Services 

  • Increases of approximately 6% in Maintenance and 5% in Transaction Processing

• Operating margin3 increased approximately 900 basis points to about 20%

The past year saw Misys Healthcare stabilise its business. It refocused on meeting customer needs in the ambulatory market and on connecting all venues of care. Upon closing, the merger with Allscripts is intended to develop our enlarged Healthcare business into a market leader able to take advantage of the benefits of growth in Electronic Medical Records adoption. We expect to recognise significant cost synergies by leveraging our respective infrastructures as well as revenue synergies by cross-selling existing products from both companies into our respective installed bases.

These results surpassed management expectations despite the disruption of the Allscripts merger. Operating margin increased approximately 900 basis points to approximately 20%, demonstrating the results achieved by new management, specific cost actions including the delay of certain investments in development in anticipation of the merger, and organisational alignment initiatives taken during the year.  The ILF revenue decrease and the decrease in Global Services order intake was the primary driver of the decreased Global Services revenue. Maintenance revenue growth indicates sustained customer loyalty and we continue to see the benefits of the Payerpath acquisition with the growth in Transaction Processing revenues.  

Global Services

• Total Order Intake2 increased approximately 16% to about £83m; 

  • Total Order Intake increased by approximately 13% for Banking and 36% for TCM

  • Total Order Intake decreased by approximately 5% in Healthcare

• Revenues1 grew approximately 19%

  • Revenues for Banking increased by approximately 19% and for TCM by approximately 41%

  • Revenues for Healthcare decreased by approximately 8%

An important priority for Global Services is the development of high quality support centres in low cost environments to improve the quality of service it offers customers. Our new Global Healthcare Support Centre went live in Manila. This facility is also equipped to support a number of Banking and TCM solutions.

Open Source Solutions

Misys established Open Source Solutions in July 2007 to drive innovation in the marketplace and move towards open standards using open source. In October 2007, this business announced its intention to release components of Misys Connect™ to the open source community and in February 2008 demonstrated its capabilities at the largest US conference for the healthcare industry, Healthcare Information Management Systems & Society (HIMSS). It also unveiled in March the beta-version of OpenCarbonWorld.com, an innovative portal that provides accurate, up-to-date information, market statistics and discussion forums for the carbon market.  

Foreign exchange

Retranslating the results for 2007 using the average exchange rates for 2008 decreases 2007 revenues by approximately £5m and operating profit by approximately £1m and this is reflected in the like for like comparative results. The most significant impact is from the movement in the US dollar and the Euro, where the average exchange rate in 2008 was US$2.00:£1 and €1.38:£1 compared to US$1.92:£1 and €1.48 in 2007. As at 31 May 2008 the exchange rates were US$1.98:£1 and €1.27:£1. 

Audited results for Misys plc will be announced in late July 2008.

ENDS

A conference call for analysts and investors will be held at 10am today. 

To access this call please dial +44 (0)1452 542 400

For further information please contact: 

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:

All figures below are unaudited and are prepared in accordance with IFRS. The data below have been provided on both an as reported basis and on a like for like basis. In this trading update the like-for-like numbers illustrate the underlying trading performance of the Group in the period under review. The like for like results exclude the results of the businesses disposed of that are classified as discontinued operations and the incremental benefit of acquisitions.  Like for like figures are quoted in sterling using average exchange rates for the year ended 31 May 2008.  Total Order Intake is presented on a gross basis reflecting contracts signed during the fiscal year. Prior year amounts were previously reported on a net basis, however for comparative purposes 2007 has been restated to a gross basis.