2006

Trading update

Following the trading announcement issued by the company on 30 January 2006, the statement regarding the share price movement on 6 April 2006 and the significant recent negative public comment surrounding the company, iSOFT has experienced difficulty in delivering a trading result in line with the current market estimates.

In particular, the company has been unable to complete the previously anticipated update and extension to a material existing contractual arrangement in the UK outside of the National Programme, ahead of its 30 April 2006 yearend. As a result, the revenues derived from this arrangement, which covers certain existing installed iSOFT systems, will instead now be realised in future financial periods.

The current range of market estimates is believed to be £231 million to £256 million for revenues and £24 million to £42 million for profit before tax. Following this trading update, the company now expects to report revenues in the range £210 million to £215 million and profit before tax in the range £17 million to £22 million. The company expects to report an operating cash inflow in line with guidance given to the market on 30 January 2006 and a positive net cash position at 30 April 2006. Reporting these expected results would ensure that the company satisfies its banking covenants.

In the meantime, the company has and continues to take action to re-align its operating cost structure with future revenue expectations.