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Misys IFA valuation falls 80%

Analysts&#39 valuations of the Misys IFA business have dropped by as much as 80 per cent since the company announced plans to float the division in July.

Initial estimates had valued the business at up to £700m but this dropped to as low as £136m last week when Misys held its AGM.

Analysts blame the fall on market conditions and regulatory changes and point to the fact that no IFA model has proved it is worth such estimations.

Misys chairman Kevin Lomax said in his statement to shareholders: “Our exp-ectations of the group&#39s overall performance in the current financial year has not changed since July. Our IFA networks business has continued to suffer from adverse market conditions. While commission income is slightly lower than expected, this has been offset by stronger service revenues from IFAs and providers.”

JP Morgan analyst Charles Newington-Bridges says: “The consensus valuation put the IFA business at between £175m and £200m but I would put it lower than that. My valuation is £136m. Even if we see a substantial rally in equity markets, it won&#39t get anywhere near the estimates of between £400m and £700m.”

Misys head of media relations Paul Charles says: “There is a large range of valuations of the business. This is partly down to the fact that many of the software analysts who look at Misys do not understand IFAs and do not know how to value the business.”

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