Misys Plc, the UK’s largest software company, is to invest 50m pounds ($79.1m) in the two web portals designed to make it the major player in the UK, and eventually European, financial services business. From a base as the dominant supplier of software to the Independent Financial Advisers (IFA) in the UK, Misys plans to launch two portals early next year to take advantage of buoyant sales of financial products. One will the enable IFA community to get quotes from financial institutions for their customers and choose a range of valued added services. The other will be aimed at consumers to give them advice and the ability to buy a range of products from insurance to home loans.
The company’s plunge into direct internet activity was prompted by its experience in the US where its subsidiary Medic Computer Systems and healthcare e-commerce specialist Healtheon Corp have formed an alliance under which Misys gains a lucrative 3% stake in Healtheon.
Misys chairman Kevin Lomax says the company’s strategy was to use its expertise in the core software applications business as an entry point to new web businesses. Misys will take a small commission from its portals but sees major opportunities from advertising and sponsorship.
With the banking and securities market providing over 70% of profits, Misys has prospered from Y2K and euro compliance, and net income for the year to May 31 rose 39% to 60m pounds ($95m) on revenue up 30% at 582m pounds ($921m). Earnings per share rose 26% to 16.7 pence. However, while operating profit on the banking and securities side climbed 42% to 98m pounds ($155.1) on revenue up 31.6% at 329m pounds ($521m), this growth rate is likely to slip back to around 20% even though Misys anticipates a surge of pent-up demand once the millennium is over. With full year figures from Medic included, operating profit on the healthcare side rose 123% to 29m pounds ($45.9m) on revenue 104% higher at 170m pounds ($269.2m).
While the insurance side will see Misys’ push on the internet, the present business is sluggish with operating profit flat at 14m pounds ($22.1m) on revenue 6.3% up at 50m pounds ($79.1m). In fact, though Misys sees massive barriers to entry protecting its core financial business, the insurance side shows it can be vulnerable and small companies like Policy Master have been grabbing market share from Misys with more innovative software and e-business ambitions.
