Overview: steady recovery
Prospects: The Misys reshuffle brings in US import Jim Malone
Struggling software corporate
Misys is in the early stages
of a five year turnaround programme after instigating a sweeping boardroom
reshuffle at the end of last year.
US import Jim Malone is the newest addition to the Misys team as the company
embarked on another key stage of new chief executive Mike Lawrie’s efforts to
orchestrate a turnaround of its fortunes.
What’s happened?
Misys announced this week that Malone had been drafted in to replace Howard
Evans after the outgoing finance director appeared to have become another
high-profile casualty of the failed management buyout last year.
Malone’s base salary will be £265,000 but his bonuses will be directly linked
to the future performance of the company. ‘There will be on target annual bonus
opportunity of 100%, rising to a maximum annual bonus opportunity of up to 150%
of his salary.’ Misys said.
What’s going to happen?
When he starts next week Malone will have his work cut out keeping the Misys
coffers in a healthy state. Under the terms of Misys’ strategic plan, Malone
will have to deliver annual cost savings of £25m in 2008, rising to £40m per
year from 2009.
This week the company also decided to sell off Sesame, one of its most
profitable arms to Friends Provident. It expects gross proceeds in excess of
£90m.
CEO Lawrie has said that Sesame is ‘a great business but it is not consistent
with Misys’ strategy going forward,’ preferring to concentrate on driving growth
and profitability in the core software and solutions businesses.
For the year ending 31 May 2006 Sesame reported revenues of £370m, so that
will remove one prop to revenues going forward. The market may be unsure of what
the future holds for Misys after the failed MBO last year, but Malone’s previous
experience may reassure the doom-mongers.
At his last post, Malone oversaw a 33% rise in revenues for the first quarter
of 2007 at US-based healthcare corporate the Trizetto Group, compared to the
same period in 2006.
Despite the Sesame sale Misys’ net borrowings are expected to increase by
‘approximately £20m as a result of the transfer of cash balances.’ An optimistic
Jim Malone said: ‘I am extremely excited to be joining Misys at this early stage
of its turnaround programme.’