iSoft struggles to win new business

Healthcare software specialist iSoft has reported losses of £8.8m in the past year, as it struggled to win new contracts and incurred the expenses of cost cutting.

The firm made losses of £8.8m in the past year, a huge improvement on the £382.2m loss in 2005/6 made due to write off of good will and change in accounting practices. The company saw 90% of its share price wiped out last year as it was blamed for contributing to delays in the NHS IT programme.

iSoft, which is shortly expected to be acquired by Germany’s CompuGroup, said it struggled to win new contracts as a result of last year’s accounting scandal and subsequent uncertainty about the company and its products but managed to narrow losses with some severe cost-cutting.

The company incurred costs of £21.8m relating largely to restructuring and has launched a plan to strengthen operations and reduce costs.

The board said it does not expect the group to return to significant revenue growth until the Lorenzo hospital software product – a key part of the £12bn National Programme for NHS IT (NpfIT) – is developed to a point where it can be marketed outside the UK.

Current targets are to have the software ready for delivery outside the UK from early 2008.

‘Both normalised operating profit from operations and the year-end cash position were considerably better than we had budgeted for at the beginning of the year,’ said acting chief executive John Weston.

The company expects shareholders to vote in favour of the recommended £160m, 66p-a-share, cash offer from CompuGroup at the EGM on 31 August.