Misys Plc, based near Worcester, must be very pleased with its acquisition of Kapiti Ltd last March (CI No 2,385). For the second half in a row it has provided a major boost and it now looks like ú40m well spent. Pre-tax profits for the group rose 40% to ú11.2m on turnover up 52% to ú63.9m. Kapiti’s new banking product, Equation 3, has seen particularly strong orders in the world’s emerging economies. The computer systems division as a whole saw profits up by 41% and sales ahead by 62%, though its progress is expected to become more apparent in the next half due to the timing of some of its contracts. The maintenance side of the division appears to be tailing off, with no new contracts won during the period. The company attributes this to third parties affecting the performance of the service companies. The financial services division provides a far healthier return for Misys. Its profits and sales increased by 29% to ú6.2m and ú16.7m respectively. The main contributor is Misys Financial Systems with its electronically-underwritten insurance products. Electronic transaction volumes have increased three-fold over the past year, but the company sees substantial room for further growth as it estimates only 3% penetration of the potential market so far. The group expects its spending on software development to peak during the second half, so it confines its prediction for progress to satisfactory. The group acquired FCG Computer Systems Ltd, which produces software for the small-scale construction industry in September, paying ú1.5m. Chairman Kevin Lomax believes this will complement its existing position in the construction industry. Misys has no bank borrowings and improved its cash balances slightly to ú35m; an interim dividend up 15% to 3.45p is proposed.
