West Midlands-based software group Misys yesterday painted a bright picture for its banking and healthcare products after it reported annual earnings towards the top end of forecasts.
Misys told shareholders that a fall in profits at its division supplying services to financial advisers had partly offset strong growth elsewhere.
The group, which employs more than 6,000 people in some 120 countries, said the market for investment, savings, protection and borrowing-based products remained flat, contributing to profits at the arm falling 40 per cent to £6 million in the year to May 3.
However, Misys sounded a more upbeat note about its future as it reported a better performance by its businesses supplying the banking, healthcare and general insurance industries.
Misys said profits before tax, goodwill and exceptionals fell to £ 91 million from £94 million last time. Turnover fell slightly to £888 million from £900 million.
The Evesham, Worcestershire-based group intends to dispose of Sesame, which provides support services to more than 8,000 financial advisers in the UK, during the next 12 months.
It said revenues at the arm were five per cent lower than the previous year as weaker market conditions seen over the last two years continued.
Chairman Kevin Lomax said Misys anticipated brisk bidding for Sesame.
"We get lots of phone calls reminding us people are interested. We haven't invited any offers yet, and people are anxious to know when we are starting," he said.
He said bidders could include large life insurance and pension companies or mortgage providers.
Major players in those sectors include Norwich Union, Standard Life, and building society Nationwide.
The group's banking division benefited from the increasing tendency by banks to use third party solutions to reduce costs and improve efficiency.
Revenues at the arm rose seven per cent, while operating profits advanced 17 per cent.
Demand for banking software had shown some consistent "if modest" improvement, after remaining subdued since early 2001.
Its healthcare arm, which carries out transaction and claims processing for physicians, reported good growth in orders and a six per cent rise in revenues.
The group said the general insurance market was " generally stable" with an eight per cent increase in revenues to a record £34 million after new products performed well.
Misys said the " encouraging" results achieved during the year reflected factors such as the improvement in demand for banking software and continued strong demand for healthcare software.
It added: "We believe the company is well-positioned to continue to make progress."
Mr Lomax said: "We are encouraged by the way things are going, and certainly our pipelines are looking encouraging as well."
Brokers Bridgewell said: "Numbers look very much in line with the trading statement. All turnover and EBITA metrics are in line with our forecasts except insurance, which is a little better.
"Importantly, the company has reiterated that there is at last some consistent if modest improvement in banking."