Okay, well the results weren't stunning, although most of the factors applying to first half had been flagged - just turned out worse than expected.
Still, it was interesting to see the reduction in reliance on NPfIT contracts - the slide in the presentation regarding backlog suggests that last year, NPfIT comprised about $245m or 40% of their backlog. This year it is down to $89m or only 14%. I'm guessing the renegotiated contract with CSC has meant a major downwards revision in revenue, as I calculate they only received $91m in the past 12 months. However, the good side is that the concentration of risk in their results due to reliance on NPfIT has reduced dramatically. Seems to me, this puts them on a much more secure footing going forward.
Overall, after reading through the results and presentation, I am satisfied that iSoft remain on the right track. The currency changes and NPfIT upheavals cannot be blamed on iSoft, but they are not sitting on their hands and wailing or blaming, merely getting on and shifting the focus of the business to accommodate change.
ISF Price at posting:
59.5¢ Sentiment: LT Buy Disclosure: Held
