iSOFT, a leading international supplier of software application solutions to the healthcare sector, is providing the following update on current trading in the business.
As has been widely reported, the National Programme for IT in the NHS in England ("the Programme") has been experiencing a significant degree of rescheduling. The process to revise delivery plans and timescales within the Programme is on-going. As a result it is now clear that delivery of iSOFT application solutions to NHS Trusts will occur, in general, later than previously expected by the Company. iSOFT anticipates that the overall revenue opportunity over the whole life of the Programme remains broadly in line with its initial expectations. The impact of the rescheduling process is likely to be that the phasing of revenues will be less concentrated in the earlier years of the Programme than previously anticipated.
This rescheduling process has created uncertainty for iSOFT's current financial year and, as the process is still on-going, the Company does not now expect to recognise any revenue in respect of the delivery of new software into the Programme during the second half of the year. Total full year revenue generated from the Programme is therefore expected to be around £30m, approximately £55m below previous expectations. The resultant operating profit reduction from this revenue slippage is expected to be around £45m. The rescheduling process will also have a consequential impact upon cash generation in the current financial year, but the Company expects to generate a positive operating cashflow. The potential impact on future periods will only become clear following the completion of the rescheduling process which is expected to take place over the coming months. In the meantime, the Company is not assuming a significant near term increase in annual revenues from the Programme.
iSOFT can confirm that the rest of the Company's trading, both in the UK and internationally, as a whole continues to perform in-line with its expectations.
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