iSoft reins back on profit and turnover forecasts

Healthcare IT supplier iSoft has reined back its forecast turnover and profit saying that the company has been unable complete the previously anticipated update and extension to an existing contractual arrangement in the UK outside the National Programme for IT, ahead of its year end today (30 April).

The business covers existing installed iSoft products and the company says the work will be realised in the future. 

The company’s turnover for its current financial year, however, is expected to be reduced by between £21m and £41m and its profits before tax are expected to drop by between £7m and £20m.

In a trading statement issued on Friday afternoon, iSoft said: “The current range of market estimates is believed to be £231 million to £256 million for revenues and £24 million to £42 million for profit before tax. Following this trading update, the company now expects to report revenues in the range £210 million to £215 million and profit before tax in the range £17 million to £22 million.

iSoft indicated that it would be cutting costs and jobs as a result of the figures. "In the meantime, the company has and continues to take action to re-align its operating cost structure with future revenue expectations."

“The company expects to report an operating cash inflow in line with guidance given to the market on 30 January 2006 and a positive net cash position at 30 April 2006. Reporting these expected results would ensure that the company satisfies its banking covenants.”

The trading statement marks the end of an eventful financial year for iSoft which has contracts to provide the core clinical solution for the NHS in three of the five English regions covered by the National Programme for IT.

Explaining the company’s announcement on Friday, iSoft’s trading statement said: “Following the trading announcement issued by the company on 30 January 2006, the statement regarding the share price movement on 6 April 2006 and the significant recent negative public comment surrounding the company, iSOFT has experienced difficulty in delivering a trading result in line with the current market estimates.”

iSoft says it expects its next report to the stock market to be in late June with the announcement of its results for the year ended 30 April 2006.