27 Jul 2010
Misys - Full year results 2010
14 Jan 2010
Misys - Half year results
23 Jul 2009
Misys - FY results for year 31 May 2009
30 Jan 2009
Misys - Interim results 2008/2009
24 Jul 2008
Misys - Preliminary results 2008
24 Jan 2008
Misys - Interims results 2007/2008
24 Jul 2007
Misys - Preliminary results 2007
08 Mar 2007
Misys - Strategy announcement
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34% earnings growth indicates another year of performance. What, for you, are the highlights in these results?
Well, we're really pleased. We think it's a very strong set of results. We saw revenue growth. We saw good profit growth, almost 10% profit growth on a constant currency basis, a continued expansion of our margins. So that revenue growth, coupled with very tight cost and expense controls, is what drove the double-digit profit improvement, and also the 34% improvement in earnings per share.
These results are clear evidence of this turnaround delivering. How much more is there to go for in the turnaround?
Well, there's plenty to go. We're really now trying to establish Misys' leadership position across the industries that we participate in. As you know, the merger with Allscripts went very, very well, and we really created the undisputed leader in that industry. Our Treasury and Capital Markets business has rebounded very strongly in the second half of the year, and clearly we're one of the leaders in the capital markets business. We've made a huge investment in our banking business, and we're beginning to see early signs that that business too will begin to turn around towards the end of this year, the early part of next year. So, until we become the leader in all of these industry segments, there's plenty of work to continue to do.
In June, you announced that Allscripts/Misys was going to merge with Eclipsys and this at the point when you could say you had a leadership position in the US healthcare IT market. Is this the right time to do a deal like that?
Yes, we think it's absolutely the right time. As I said, the merger was extremely successful. But as a result of the stimulus program, the market is beginning to change in the US, and hospitals in particular are becoming more and more important in the decision-making process as to what IT physicians will use. So we felt it was very important that Allscripts merge with Eclipsys, and be able to create this end-to-end platform between physicians all the way through to hospitals. In order to do that, we felt that it was time for Misys to sell down its control position, so that the capital structure could be freed up so Allscripts would continue to play its leadership role in the consolidation of that industry. And this was clearly a win for the Allscripts shareholders, for the Eclipsys shareholders, and the Misys shareholders. And there's very few times when you can bring that all together and create a win/win for customers, employees and investors, and we think that's exactly what we did. So, yes, we think it was absolutely the right time.
And what are the next steps in the process and how is it progressing?
Well, it's progressing very well. The SEC has decided not to review the transaction. That's very good news. The period that Hart-Scott-Rodino can comment has expired, so we passed those two key regulatory hurdles. Later this week, we'll be mailing our circular to our shareholders. Allscripts has already done that. And we have a scheduled shareholder vote for the mid part of August.
The only issue that we got back from investors and analysts was that the size of this secondary offering is pretty big - 36m-40m shares. So this morning we're able to make the announcement that we are reducing the placement size from a minimum number of shares that Misys will sell, from 36m-40m, to 25m. In addition, we have been notified by our largest investor, ValueAct Capital that they are going to place an order for 5m shares, at $16.50.
So I think, one, this is a clear signal. From Misys' standpoint, we feel very comfortable with the price that Allscripts is at. We think it's a good investment. So we are comfortable not selling as many shares right now and we'll sell more shares over time, as we think the price will continue to appreciate. For ValueAct, they think $16.50 is also a very good price, good value for Allscripts; therefore, they are willing to buy at that price. So I think all these actions should give investors a great deal of confidence that this transaction will in fact occur.
You are in effect now a pure play financial services software business, what's it going to take to establish leadership in this space?
We are really very, very comfortable with our Financial Services business. As I said our Treasury and Capital Markets business has returned to growth, and we are beginning to see some of those early signs in the Banking business. The Banking business has been in decline for the last year. This against a backdrop of uncertainty amongst banks, but some of that uncertainty is beginning to lift as we see more clarity around the regulatory environment that banks will participate in. So we feel comfortable that the macro environment is beginning to improve and should see that gain momentum as we exit this calendar year and move into the second-half of our fiscal year.
In addition, we have invested very, very heavily over the last four years. We've invested in our capital markets product portfolio, new products, new offerings, new processes to manage our development in sales and customer support. And that is now beginning to come on stream and we are seeing good results from that.
We've made the same enormous investment in banking, completely redone our portfolio. Most notably our BankFusion platform which continues to gain good traction in the marketplace, and we are very pleased about that, but also our whole Trade Innovation platform, Mobile which is an entirely new area for us that we heretofore have not been in, and also Business Intelligence.
And what is most important is, as banks begin to communicate what their investment priorities will be as spending resumes, many of their priorities are very well linked to the investments that we have made in our product portfolio over the last three or four years. So we feel like we have the same opportunity in financial services that we had in the healthcare industry two years ago, where the industry is beginning to change and the value that Misys can bring to the table, in terms of our solutions and our people and our insight, position us very well to take advantage of that opportunity.
And we've seen this acceleration in Treasury and Capital Markets in the second-half; is there any way to give guidance on when you expect that to really start happening in Banking?
Well as I said we are beginning to see some early signs. So I wouldn't say it's a trend yet, but we are seeing, for example, improvement in our pipeline. So if we look out over the next six to eight months we see a lot of our new solutions beginning to build a substantial pipeline, things like BankFusion and Universal Banking and Mobile and Business Intelligence. Those are all early indicators that we are beginning to pick up some interest. The regulatory environment has clearly begun to change, and we have more clarity around the environment that banks can expect to participate in. So when you add that all up we are beginning to get a little more optimistic that we are going to see a return in bank spending as we exit this calendar year and we go into 2011.
Where is the focus in the business for investment now? You've invested heavily. Where are you looking at right now?
We are continuing to invest in our product portfolio. So throughout this downturn over the last two or three years we have not only on an absolute basis increased our investment in R&D, but as a percent of that spend more and more of it is being spent towards new applications, new solutions and less money is being spent maintaining our old solutions. That's very encouraging.
We hired almost 1,000 people last year. A lot of new people we brought into our Bangalore facility, our Bucharest facility. We've made a big investment in customer support and sales and services. The whole front-end of our business that interacts with our clients we have made a big investment. And we will continue to make that investment as we go forward.
So our primary investment is in our solution portfolio and then the people that represent those solutions to the customers, that interact with the market and our clients on a day to day basis.
And how do you see that paying off and over what sort of timeframe do you think?
Well I think its paying off now. We are seeing a substantial improvement in our Capital Markets business, some early signs that Banking is beginning to move in the right direct. And I think the most notable is customer satisfaction. Our customer satisfaction has improved dramatically over the last three years. And that's such an important metric, because our customers are telling us Misys you are getting better.
Is there more to do? You bet there is more to do. But we are improving and we are beginning to earn permission from our customers to go in and have the conversation about how our solutions can help make them more productive, can help them improve their businesses. And that is a significant step forward for Misys.
You've managed to get net debt down to zero that gives you scope to do bolt-ons. Is that going to be part of the strategy for getting that leadership position in financial services?
Well sure, as we complete the Allscripts transaction we said we are going to return around $1b to our shareholders. We will pay down some of the remaining net debt, because net debt is zero now as a Group, as a whole, which includes Allscripts. So post-Allscripts we will pay down some of the remaining debt, and that gives us the opportunity to continue to make investments in our product portfolio as well as our people that call on the customers. In addition, if good opportunities come along that would bolt into our overall framework for Capital Markets and Banking we would certainly consider that.
So you said there's work to do you've executed the Healthcare transaction and you've got to get this leadership position in Financial Services. What does that mean? What are you expecting from the coming year in terms of the business?
I expect us to take the next step. I expect to see our Banking business improve. I think our Capital Markets business will continue to do very well. And that really is the third phase of our turnaround program, which is to be the leader in these industries. And a leader sets the pace, a leader grows. A leader is able to deliver value to its customers. A leader has unique insights into how the technology, married with the people and processes, can add value to our clients. That's what a leader does. And that's the next step we are going to take over the next year or so is to become the leader in those industries.
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