iSoft reports £382m loss and new funding

Health software firm iSoft has today reported a £382m annual loss but said that it has reached a funding deal with its banks, and signed a new memorandum of understanding with Computer Sciences Corporation.

"The new terms will provide the group with funding for its ongoing operations … and provide a period of stability in which we can consider and execute a longer term financial strategy," iSoft said in a statement.

In twice delayed figures the firm reported a £382.5m pre-tax loss in the year to 30 April, mainly as a result of writing down the value of goodwill on its books from Torex, a company that iSoft bought in 2004.

iSoft said it had signed a new deal with CSC, prime contractors managing the NHS IT project in the North-west and West Midlands region, confirming a revised schedule under which it will deliver product and services.

As part of the deal CSC will take far greater responsibility for managing the development of iSoft’s Lorenzo product, together with managing the seven NHS hospital trusts in London and southern England who were already using iSoft software before the commencement of the NHS IT programme.

ISoft reported total sales of £201.7m under a new accounting policy introduced after the firm said earlier this year that it had found evidence of irregularities affecting its 2004 and 2005 accounts.

The firm today announced it had struck a deal to keep its existing facilities and to potentially draw on an extra £25m. In exchange, it will pay higher interest rates and issue warrants worth 3.7% of its equity to the banks.