iSoft hit by ‘political uncertainty’

Australian health software firm iSoft has revised its revenues down for the full 2010 fiscal year by as much as £17.6m ($30m), citing political uncertainty in the UK for its not being paid for anticipated milestones.

The downwards revision led to a sharp fall in iSoft shares, which slumped 30% to 39 Australian Cents at the close of trading on the Australian stock exchange.

In an Australian Stock Market update, iSoft said its revenue for fiscal 2010 was now in the range of £258m to £266m ($440 to $455) million, while EBITDA was now likely to be in the range of £26m to £35m ($45m to $60m).

In February, the company reported a full fiscal 2010 outlook of 275m ($470m) and an EBITDA of £66m ($113m). In March, the company reaffirmed its market guidance, saying it remained on track and that it was in negotiations with its local service provider in England, CSC, on a revised agreement.

The company also reported a first half fiscal 2010 results which included revenues of £138m ($237m) and an EBITDA of £24m ($40.8m).

Today, iSoft saw the latest version of its Lorenzo electronic patient record system go live at University Hospitals of Morecambe Bay NHS Trust as part of the National Programme for IT in the NHS.

However, the company said that political uncertainty in the lead-up to the recent UK election, and change of government, had seen the deferral of decisions related to national programme– particularly for CSC.

“For iSoft, this has affected the timing and conclusion of negotiations surrounding the potential of an agreement with CSC in relation to the market opportunities in England and in particular the Southern cluster of English hospitals, as well as delays in milestone payments,” said the statement.

The company added that the revenues that had been anticipated in fiscal 2010 were now anticipated in fiscal 2011.