IBA Health sticks to story despite UK worries Author: Mandy Bryan Date: 06/11/2003 21:03:00 Words: 481 Publication: Financial Review Section: IT Page: 73
IBA Health told shareholders at its annual meeting yesterday that it would stick with forecasts ranging from break even to a slim profit for 2004 despite its recent UK distribution woes.
The health-sector software company, which booked a $487,000 loss last year, said it still expected to book between "zero to $3 million" earnings before interest, tax and amortisation from revenue growth in Australia, New Zealand and Singapore. The company said no improvement in UK sales was anticipated in the short term, but sales there could rebound in 18 months when demand had recovered after the loss of a British distribution channel.
IBA's UK ambitions were stymied recently when its new UK-based clinical-systems distributor, Torex, announced a merger with its UK-based rival Isoft.
IBA chairman Gary Cohen led the submission to UK regulators to oppose the merger on anti-competitive grounds.
Mr Cohen confirmed that, if regulatory approval was given, IBA would initiate legal proceedings against Torex and its chairman, Chris Moore, who sat on IBA's board between May and August.
"We have taken extensive advice about our legal position and we have a very strong legal claim against Torex and Chris Moore," Mr Cohen said.
The board had agreed that IBA should oppose the merger in court, if necessary, in light of the market potential in Britain for IBA's clinical software.
Mr Cohen said IBA had invested significant funds to develop clinical software for general practitioners in Britain who would soon be buying new systems, as part of a multibillion-dollar overhaul of that country's ageing government-run National Health System
Macquarie Bank said IBA's Torex deal was viewed as a vote of confidence in the company, when the bank bought into its share register earlier this year.
But Mr Cohen said the company was not threatened by recent developments.
He said Macquarie Bank was working with IBA on building value for all shareholders, although it was "premature to say how".
IBA had $12 million in cash and Mr Cohen said IBA expected to be cash-flow positive during the 2004 calendar year. Managing director Len Humphreys said IBA was in the running for $40 million of contracts.
The company this week finalised its $2.2 million acquisition of administration and clinical systems company Medical Spectrum, which had been selected to take part in the HealthConnect health-information network trials in Queensland.
Dr Humphreys said IBA planned more acquisitions to build market share.
IBA shares rose 1 cent yesterday to close at 15.5y.
I would probably upgrade from sell to hold now.
IBA Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
