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Market conditions
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| The year ended 30 April 2003 has been a very good one for our
business. Although market conditions have been competitive, our
focus on producing modern, highly differentiated software applications
has ensured that we have maintained a high hit rate in public
procurement programmes and we have continued to sell strongly
back into our existing customer base. |
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In our target markets and most notably
in the United Kingdom, Ireland and Australasia,
national governments have shown a preparedness
to invest heavily in modern application
systems and broadband networks to provide
information to improve the quality of
healthcare services. |
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| Our strategy of focusing on being a leading application content
provider, fitted and continues to fit well with the procurement
plans of these governments. The published programme of investment
in the United Kingdom for example, involves separating the roles
of Application Service Provider (ASP) and application content
provider with the former being the province of the large service
organisations and the latter being the domain of the innovative
health systems software specialists, such as iSOFT. This approach
is being emulated in other countries where healthcare modernisation
and reform is a high priority for government. |
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| We have executed on our strategy well over the last year and
our positioning against government stimulated market developments
is very promising. |
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Our financial performance for the year
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| The market conditions described suit our business model and
that is reflected in iSOFT’s results for the financial year
ended 30 April 2003. |
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Our turnover for the year grew to £91.5m
representing an overall growth rate of
52.2% over the previous period, of which
31.2% represented organic growth from
existing business operations.
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| Profitability also showed strong progression with operating
profit for the year ended 30 April 2003 of £21.0m, an increase
of 59.3% over the previous year. Operating profit margins were
increased to 22.9% from 21.9% despite strong competition and notwithstanding
the amounts expended during the year in the development of our
leading application product portfolio and the enhancement of our
operating structures. |
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Product development
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| Over the past year we have continued to invest heavily in our
application software portfolio for healthcare provider organisations.
Approximately £7.9m was invested in product development
representing 8.6% of turnover for the year ended 30 April 2003.
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| Our relationship with Microsoft Corporation continues to strengthen
and they remain our most important technology partner. |
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We are acknowledged by Microsoft as
a leading developer in .NET architectures
and continue to be a launch partner for
their step change technology releases.
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| During the year we worked closely with Microsoft to ensure
that our applications can be packaged up for sale to the third
party service organisations who in turn offer application services
for consumption by end user customers. This has involved re-engineering
a number of our applications and the completion of this programme
was announced in March 2003 at the HC2003 Conference in Harrogate.
The resultant i-series of applications has been well received
and recognised in our customer base and our markets generally
as the most modern, technology relevant suite of health information
system solutions available today. |
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| In addition, I am delighted to report that since the balance
sheet date, we have announced a joint marketing and development
agreement with Eclipsys Corporation of the United States. |
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| iSOFT purchased the United Kingdom and Australian operations
of Eclipsys in May 2001 and this new agreement represents the
continuation of a relationship which is strategically important
for iSOFT as it allows us to bring the best of North American
thinking into the clinical components of our applications, where
appropriate. |
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