Misys Plc 1st Quarter 2010/11 Interim Management Statement

29 September 2010

Increasing adoption of new financial services solutions
£780m proceeds from disposal of majority of Allscripts stake

Misys plc (FTSE: MSY.L) interim management statement for the three months ended 31 August 2010. Financial information referred to in the statement is unaudited.

Allscripts disposal and return of proceeds to Misys shareholders
• Disposal of majority of Misys stake in Allscripts completed on 27 August.
$19.54 average sale price per Allscripts share (after placing fees), a significant premium to the current market price
• Retained 19 million shares in Allscripts, a 10% stake
• Disposal proceeds of approximately £780m ($1,188m) (after net hedging fees)
• Return to Misys shareholders of substantially all of the disposal proceeds after advisory fees and a paydown of net debt
To be launched by a tender offer, currently expected in November
• First quarter end as a pure play Financial Services software business
Results exclude discontinued Allscripts operations Financial and operational highlights - Financial Services All comparisons against the prior year period are on a constant currency basis. As well as adjusting for movement in foreign exchange rates1, this excludes discontinued Allscripts operations2.
• Order intake increased 1% compared with the prior year
- Treasury & Capital Markets (TCM) orders grew strongly
- Banking: decline in older solutions partially offset by increased adoption of new solutions

• Orders for new solutions gathering pace
- TCM: orders growth led by cross-asset Summit trading solution
- Banking: increased orders for BankFusion, Trade Services, Mobile Banking and Business Intelligence
These new solutions represented 70% of our ILF order intake in the period
• Revenue flat on prior year
- growth in TCM offset by decline in Banking
- strong services growth as previous quarters’ TCM ILF deals are now being implemented

Mike Lawrie, Chief Executive, Misys plc, comments “Following completion of the disposal of the majority of our Allscripts shares, this is our 1st quarter end as a pure play financial services software business. The Allscripts disposal raised approximately £780 million ($1.19bn). We intend to return substantially all of this, after fees and a paydown of debt, to Misys shareholders. We remain on track to launch a tender offer in November. Treasury & Capital Markets showed continued growth after the very strong licence sales in the 4th quarter of last year.

In Banking, customers’ adoption of BankFusion and other new solutions has begun to shift our sales mix towards the growth areas we have invested in. The BankFusion go to market strategy passed two important milestones with the go-live of our first new name customer, Actinver and the first adopter of our BankFusion Midas solution for wholesale banks.

As we move into the ‘lead’ phase of our turnaround strategy, we are seeing growing adoption of our new solutions from both existing and new customers. This, alongside continued recurring revenues and cost control, enabled Misys to increase adjusted operating profit over the prior year.”

In the first quarter, traditionally our quietest reporting period, order intake was 1% above the prior year as a result of increases in TCM. BankFusion and other new Banking solutions contributed increased orders.

Revenue was flat compared with the prior year quarter, whilst adjusted operating profit increased over the prior year period.

Net cash on 31 August 2010 was £659m, compared with net debt of £97m (excluding Allscripts) at the start of the period. The increase was due to the receipt of the proceeds from disposal of Allscripts shares, partially offset by the usual seasonal operating cash outflow during the first quarter.

Treasury & Capital Markets

Order intake was up 15%, reflecting particular success with our Summit trading solution. A significant new release of Summit during the period introduced new features for derivatives, equities, risk analysis, deal pricing and business intelligence.

There were new name wins for Summit with OSK Investment Bank in Malaysia and Mizrahi Tefahot Bank in Israel, and for Opics with Bank of Kunlun (the finance arm of PetroChina) in China.

Notable installed base deals included JPMorgan in Brazil enhancing their LoanIQ solution with localised features and Skandinaviska Enskilda Banken in Germany expanding their Summit solution.

Revenues were up 4% after the very strong licence revenues in the 4th quarter of last year. Global services revenue growth was strong as recent quarters’ new system sales progressed through their implementations.


Revenues were down 5%. Sales of our new solutions (BankFusion, Transaction Banking, Mobile Banking and Business Intelligence) started to flow through into revenues.

Order intake was down 19%, though orders increased strongly for our new solutions. Four new BankFusion orders in the period included a new name competitive sale of BankFusion Equation to United Arab Bank in Sharjah and the first Midas customer to upgrade to BankFusion Midas – Caixa-Banco De Investimento in Portugal. Both are important milestones for the BankFusion go to market strategy. After the period end, the go-live of our first new name customer, Actinver, was another important milestone in the BankFusion strategy.

Orders for other new solutions included the first sale of the new Misys Mobile Banking solution, to Kazkommertsbank in Kazakhstan, and the first standalone sale of the new Misys Business Intelligence solution, to First National Bank in Lebanon.

70% of our ILF order intake in the quarter came from our new solutions, compared with just 4% in the prior year quarter. This demonstrates our progress in transitioning our sales model towards new business and new customers.

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