Axe to fall at Misys.
If you have been following the Accountancy Age/ADVFN index on its downward spiral over the last year or so, you'll be able to guess that some of the companies in it are struggling slightly.
An indicator of how trade has been over the past month should be revealed today when software company Misys delivers its first-half results to the market. The company, which specialises in banking and finance, has been hit hard in its primary division forcing it to make a series of redundancies.
Although it did not say how many jobs would be lost within the asset management and securities trading businesses, Misys did say it would result in a one-off adjustment cost of #1.4m, sparking analysts to suggest up to a fifth of its staff may go.
The tough market conditions represent a challenge to chairman Kevin Lomax and financial director Howard Evans, who had predicted an upturn in banking and securities in summer last year. Instead, it discovered revenues for the division were down 9% on the same period last year.
Customer caution was blamed for this result and the fact that the number of prospects converted to orders was below expectation. The firm did note that margins would still be up on last year due to the cost-saving exercises it had undertaken during the year.
Another small crumb of comfort for the company comes from its other divisions.
Misys Healthcare Systems managed to record revenue growth of 9% on the same period last year, mainly due to the inclusion of income from the acquired Hospital System compared to only four months in the first half of last year.
The financial services division also recorded numbers significantly above those from last year’s first half, again due to acquisitions.
This revenue increase may not save the divisions from cuts, however.
Both Lomax and Evans have been looking at reducing numbers in other areas and today’s results could give us an indication of how severe this will be.
– More on Misys at www.misys.co.uk.