Misys is blaming continued weakness in the long-term savings and investment markets after financial services sales fell by 16 per cent in the six months to November 30.
Total revenue for its financial services businesses, including mega-network Sesame, Sesame Insurance Services and Assureweb, was £195m compared with £233m in the previous year.
The businesses made a loss of £2m compared with a £3m profit previously. However, the Sesame network saw a £6m profit in the half-year. Adjusted operating profit was down by £5m to £13m, which the group attributes to declining revenues in the Sesame business.
Misys says demand for network services has been undermined by adverse conditions in the market for long-term savings, insurance and investments. It also points to regulatory conditions, saying uncertainty in the present environment has weakened demand.
Misys views the forthcoming regulation of the mortgage and general insurance markets as an opportunity to extend its market share and range of services. It is also positive about average productivity per RI in the network, which it says has started to grow again.
RI numbers within Sesame have continued to fall but the company maintains it expected the decrease.
Sesame member Life Policies Direct director Jason King says it is not surprising that Sesame sees mortgage and general insurance as a growth area because it is too difficult for small advisers to deal direct with the FSA.
Misys executive chairman Kevin Lomax says: “While these results were disappointing, we have made good progress across the group in developing our products, strengthening our business and repositioning our portfolio.”
King says: “I am sure every network would be seeing their average RI income increasing because networks are gearing their pricing structure to price out the smaller members.”