isoft hit by 'political uncertainty'

iSoft hit by 'political uncertainty'
02 Jun 2010

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 resulting in it not getting paid for anticipated milestones.

The downwards revision led to a sharp fall in iSoft shares, which slumped 30 percent 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 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).

Isoft said today that despite the go-live of its Morecambe Bay project under the UKs National Program for IT, political uncertainty leading up to the recent UK election, and change of government had seen the deferral of decisions related to the NPfIT particularly for implementation partner 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.

Jon Hoeksma

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