By Brian White
With the financial sector desperate for software that will account for the euro and ensure Y2K compliance, Misys the UK’s biggest software company, was guaranteed a good start to the year. An 18% leap in the share price yesterday to 590 pence showed that even the market was surprised at the company’s progress. Mid-term net profits were up 83% at 44.1m pounds on revenue that rose 82.9% to 268.7m pounds. Sales were boosted by an 83m pound contribution from Medic Computer Systems Inc, the supplier of application software packages to physicians’ practices in the US that it acquired for $922m in 1997. While analysts feared that Misys had paid too much to break into a new market, Misys is confident that Medic can increase its 15% market share against much smaller competitors. However, it is the banking and securities division that remains Misys strength with sales up 40% and profits increasing by 69% while orders at the end of the half were up 24% on six months earlier. Misys is confident that once Y2K spending has tailed off, banks will still be forced by competitive pressures to up their IT spending. The one question mark over Misys is the insurance division, where the specialist nature of the UK software market makes it difficult to use existing products to break into overseas markets. Revenues showed a modest 15% growth to 25m pounds and operating profit was flat in an industry facing poor trading conditions. Misys has spent heavily on developing an internet insurance broking service that will provide it with an opportunity for international sales.
