iSoft revises FY guidance downwards
Isoft Group Limited (ISF) has revised its revenue and earnings expectations for FY10 downwards due to rollout delays, uncertainty associated with the change in UK government and a weak European economic environment. The company forecast revenue for the year to be in the range of $440m to $455m and EBITDA to be in the range of $45M to $60M, before exceptional items.
Isoft said it has achieved a significant milestone with the ‘go live’ of the University Hospitals of Morecambe Bay NHS Trust, which occurred over the last weekend, as it represents a validation of the core underlying Lorenzo platform and the first implementation of Lorenzo Release 1.9 in a complex hospital environment.
However, the company said at the same time, political uncertainty in the lead up to the recent UK election and the subsequent change in government, have together led to the deferral of decisions in relation to the English NPfiT program particularly for Isoft’s partner Computer Sciences Corporation, Inc.
“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,” the company said.
“The revenues associated with this agreement had been anticipated in fiscal 2010 and are now anticipated in fiscal 2011.”
Isoft said it typically earns disproportionately higher revenues in the final quarter of the fiscal year.
“The factors outlined above, which together with currency impacts as a result of the strong Australian dollar, have resulted in revised revenue, EBITDA and cash flow expectations for the period,” the company said.
As at 1111 AEST, Isoft shares were down 8.5c to 47.5c.
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