Misys shares hit by sales warning

13 April 2012

SOFTWARE group Misys today warned that conditions in its core banking and securities industry markets remain challenging and that sales for the year just ended will be 10% lower with operating margins 2 percentage points below those of last year.

Demand for the company's financial services products is also well down although healthcare sales remain strong in the US. Shares in Misys, which makes software for healthcare clients and financial advisers, at 1240 BST dropped back 18 3/4p to 194p.

'In banking and securities conditions continue to be challenging,' Misys said. 'While there is evidence that some banks' IT budgets are starting to grow again, banks remain cautious in initiating larger IT projects.'

Brokerage Insinger de Beaufort in a note: 'If the market had been hoping for positive news from the company regarding the outlook at its banking and securities division, it will be sorely disappointed.'

Barclays Private Clients, which said in a broker note that Misys was heavily dependent on the spending intentions of the financial sector, was more gloomy about the prospects for larger IT budgets.

'If anything, banks will look to further focus on cost reduction over 2004, and investment spending, when it picks up, should remain gradual and prudent.'

Misys said there were some signs of improvement in banking and securities and its chain of independent financial advisers called Sesame where there was strong uptake of new mortgage and general insurance offerings.

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