Over the last six months revenue at Sesame has risen by 3% on a year-by-year comparison, increasing speculation Misys may again be looking for a buyer for the company.
A trading statement issued by Misys, the software company which owns the Sesame group, suggests the increase in revenue can be mainly attributed to an increase in the number of Registered Individual (RI) productivity for the network.
Although the statement points out the increase in revenue can also be seen as a result of Sesame has capitalising on “positive market sentiment and strong demand for key products”.
Susan Cottam, group communications director at Misys, says the company's view of Sesame has not changed, as it still regards it as a "very good business well run by strong management as its half year performance showed".
However she points out: "It is not seen as core to the future of Misys strategically, a point which Mike Lawrie [chief executive of Misys] reiterated with analysts last week. And as he said we continue to consider options with regard to Sesame's future."
The statement also reveals 1,450 advisers have been recruited into the Sesame Select open multi-tie proposition over the last six months, although it admits a number of these advisers have transferred from the group’s existing propositions; Sesame Network and Sesame Direct.
As a result, it says this transfer has contributed to a reduction in the membership for these two propositions, with the closing number of RI’s for Sesame Network falling from 4,750 in 2005 to 3,900 by the 30 November 2006, while Sesame Direct membership has fallen from 3,050 to 2,500 on a year-by-year comparison.
However, between May and November - the period covered by the trading statement - the Sesame Network has lost 400 RIs, Sesame Direct has gained 100, and Sesame Select has increased from 700 in May to just 1,450 by the end of November.
That said, this reveals despite the 3% growth in revenue and an improvement in operating margin from 2% in 2005 to 4% this November, Sesame has just 50 more RIs than the same time last year.
In addition, the trading statement reveals group costs for the advisory group will be around £2m more than last year, £1.1m of which has been paid to Kevin Lomax, the former chief executive of Misys who left the company on 2 October 2006.
Mike Lawrie, chief executive of Misys, says the trading update shows the banking businesses are making good progress but warns its healthcare business is “behind the performance of its peers” with a 3% fall in revenue, which can be seen as a contributing factor to Misys’ falling share price, which is currently down 0.82% to 212.5p.
He adds: “Misys is a business with great assets and opportunities; our task is to leverage these to drive real sustainable shareholder value. Since I joined six weeks ago we have launched a number of initiatives to improve performance and confidence in the business.”
Misys will publish its interim results on 18 January 2007.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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