Results - Misys blames profit fall on Y2K

A slowdown in spending by financial institutions last year hit sales hard at Misys, forcing it to post lower-than-expected results.

A slowdown in spending by financial institutions last year hit sales hard at Misys, forcing it to post lower-than-expected results.

Pre-tax profit slid 18 per cent to £48m for the half year to 30 November 1999, as banks deferred spending because of year 2000 fears. Turnover fell from £288m to £281m. Analysts had forecast profit of between £55m and £66.7m.

Kevin Lomax, chairman of Misys, said it had been through a "very abnormal period" with the year 2000-related drop in the first half of 1998 offsetting strong trading in the second half of the year.

But he said the company had turned the corner and that prospects are looking up. "There has been a marked increase in orders placed by financial institutions for systems to go live during the first half of this calender year, and we have seen further encouraging growth in an already excellent prospect list. We view the future with considerable confidence," Lomax said.

Analysts reacted positively to the forecast, saying the fall in turnover was a one-off hiccup related to Y2K. "The order book is strong and I think we will see a return to the company's traditional growth rates," one said.