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Misys, the UK software group, regained some momentum after a better than expected trading update but said Ivan Martin, its banking division chief, would step down.

Misys said on Tuesday its first half earnings per share would be in the range of 6p to 6.5p, compared with 6.8p for the same period in 2004. Consensus estimates were 5.7p.

The group’s share price fell to a 12-month low in mid-September after it warned that first-half profits would be “significantly” below last year’s, and said the shortfall might not be recovered in the second half.

The shortfall was mainly attributed to delays in large contracts to implement its banking software, making higher investment in software development and services capacity difficult to recover.

However two large contracts, one that had been deferred and another that was renegotiated, have commenced and Misys on Tuesday said group revenues for the six months to November 30 would be 9 per cent higher.

Banking revenues, thought to be hardest hit, were 10 per cent higher and order intake increased by 27 per cent. Healthcare, the group’s largest business, revenues were 5 per cent higher.

However margins in banking were lower at 12 per cent compared with 17 per cent in 2005.

“Our efforts to position the business for sustained growth are showing positive results,” said Kevin Lomax, chief executive. “While we are encouraged by this, we recognise that there is more to do in order to deliver increased value to our shareholders.”

Mr Lomax said Mr Martin was departing “by mutual agreement”.

Mr Lomax, who will take over the banking role until a successor is appointed, said: “We are encouraged by the good progress of our banking division but we recognise there is more to do to deliver increased value to our shareholders. I am working closely with the banking senior management team to ensure we continue the good momentum.”

The sale of Sesame, the group’s services business for independent financial advisors, was progressing on schedule, Misys said.

In a note to investors, Toby McCullagh at Bear Stearns & Co said the banking and services performance “adds weight to the view that Misys’ problems are more timing than structural”, but Nick Hyslop at Oriel Securities said the division’s margin performance was less than expected.

The shares rose more than 6 per cent higher at 227½p in mid-morning trade. Prior to the warning in September, they traded at 238¾p.

Copyright The Financial Times Limited 2017. All rights reserved.
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