Misys plc announces the closure of its Internet consumer
financial services businesses, screentrade.com and theformula.com, marking its withdrawal
from serving the end consumer (B2C) segment of the market. Misys’s B2B portal activities,
m-link and i2i-link, are core activities and are unaffected by this decision.
The decision to withdraw from the consumer market comes
after an extensive range of discussions, covering a period of over six months, failed to
find a suitable partner to share the ongoing development and marketing costs of these
activities. In the year ended 31st May 2001, the estimated net cost of the B2C activities
to be charged to the profit and loss account is �19 million, out of the total estimated
figure for the Internet Services Division of �23 million. The estimated cost of closure
is �10 million, which will be shown as an exceptional item.
Commenting on the announcement, Misys Chairman Kevin Lomax said:
“Having been one of the UK pioneers of Internet-based
consumer financial services with screentrade, it is particularly disappointing that we
have had to take this decision. Although we established a strong foothold in the
marketplace with screentrade, slower-than-anticipated consumer adoption of the Internet
for purchasing a broader range of financial services products has resulted in ongoing
losses at a level which can no longer be justified by potential returns.”
www.screentrade.com was launched in November 1997 and
allows consumers to compare and buy home, car and travel insurance over the Internet.
www.theformula.com was developed by Misys as the successor
brand to screentrade, allowing consumers to compare and either buy or apply for a wider
range of retail financial services products, including life insurance, personal loans and mortgages.
Both screentrade and theformula have been closed to new business with immediate effect.
Existing policyholders will remain fully covered by their
policies and will receive letters from Misys to this effect; ongoing servicing of the
policies will also continue to be handled by the company. Policyholders will receive a
further letter prior to the expiry of their policy, with advice on the process for renewal.
Misys will continue to seek a buyer for the screentrade
‘insurance book’ and/or a buyer for the screentrade brand and site infrastructure.