iSoft warns of 'significant' NPfIT delays
30 Jan 2006 Click to see the

British healthcare software developer iSOFT has warned that delays in delivering software to the UK National Health Service would slash its previous revenue and profit forecasts.

In a trading statement this morning the company said that total full-year revenue generated from the programme is expected to be around 30m, about 55m pounds below previous expectations, with operating profit seen reduced by about 45m.

According to the trading update the Manchester-based company says that as a result of delays it no longer expects to see any revenue in the second half of the year from delivery of software to the NHS National Programme for IT.

"As has been widely reported, the National Programme for IT in the NHS in England 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," the firm said.

The iSoft statement added: "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."

The warning had an immediate effect on the company's share price which at one point had plummeted to a three year low.

iSoft's warning follows a analyst briefing given by health IT services company System C on 25 January, at which the company warned that revenues were down due to delays caused by a "shortage of third party product to implement". Although it did not mention iSoft, System C is active in the three northern clusters using iSoft software.

Industry sources indicate that the delays and rescheduling are related to delays in the availability of the strategic Lorenzo software solution iSoft is contracted to provide for three of the five regions of NPfIT - North West and West Midlands, Eastern and North Eastern.

The delayed system is the second phase of the integrated strategic solution to be provided to NHS trusts under NPfIT [known as P1R2] incorporating functionality such as results and order communications, clinical noting and departmentals such as maternity, theatres and A&E.

Although almost 50 trusts have been provided with a version of iSoft's iPM patient administration system under NPfIT, with a few exceptions these have been community and mental health trusts with a pressing need for a PAS.

But with significant delays in the availability of the strategic P1R2 clinical solution, there is currently little new to offer more complex acute trusts and a growing gap has opened up in the implementation schedule once current implementation work has been completed.

In a statement CfH said: "Some LSP system deployment activity is being re-scheduled. It is because suppliers and their subcontractors, including iSoft, have taken longer than anticipated to deliver effective software solutions that interface with national applications such as the Spine and Choose and Book."

The statement added that in the context of a ten year programme the impact of the rescheduling was "not significant", and said suppliers did not get paid until they deliver. "Completion risk lies with suppliers. We continue to look to our prime contractors who are responsible for managing their software suppliers performance."

In its own statement LSP for the North West and West Midlands, CSC Alliance, told EHI: "Since the start of the National Programme for IT the CSC Alliance has, we believe, deployed more Patient Administration Systems across the North West and West Midlands cluster than the other LSPs working across the Programme. All of the CSC Alliance implementations have used the iSoft solution."

http://www.e-health-insider.com/news/item.cfm?ID=1670

If you want to risk your money on this stock that is your choice, but I would far rather be short than long, for that is much the lower risk!

if the directors didn't even know what a state the company was in, can it be worth the risk? not on your nelly in my opinion

I think a bid on the company is pending...that is why it is going up.

A bid is the only thing to save tbis company .... however, any potential punters need to be aware that the world and his wife have probably already jumped on board in this hope and is the actuality really much better than 50/50.

AZHAR
YOU HAVE STARTED TWO THREADS ON "ISOFT" ..... ARE YOU ONE OF THE DIRECTORS OF "ISOFT" ????

Shares down to near 55p ....the market scribes feel will sink to 35p

so that 55p will look wonderful when the shares are 35p - or even worse

iSoft tumbles on accounts probe news


Shares in iSoft Group tumbled in early deals this morning following last night's revelation that the troubled software firm has commissioned an investigation into possible accounting irregularities.

After the market close yesterday, iSoft said the irregularities affect revenue recognition under its former accounting policy in the financial years prior to and including the year ended April 2005.

The group said it does not expect a material impact on the revenue figures for the group for the year ended April 2006 of 195m-200m that were announced, subject to audit, under its new accounting policy on June 8th 2006.

In reaction to the news, Morgan Stanley pointed out that while the possible accounting irregularities should not have a cash impact for the group, it will hit investor confidence.

The broker added that more significant will be the impact on the renegotiation of banking covenants currently underway with iSoft's creditors.

Morgan Stanley said it believes iSoft's banks are unlikely to agree new financing terms until the group is able to obtain auditor sign-off on its accounts.

The broker added that the renegotiation of iSoft's key NHS contract is also likely to be dependent on the group producing an audited set of accounts, and so may be delayed.

And Morgan Stanley pointed out that concern over its accounts could also affect new signings elsewhere in the business, with potential knock-on effects for profitability and cashflow.

Meanwhile Bridgewell Securities pointed out that the latest news for iSoft sees accounting uncertainty re-emerging as an issue that investors had previously regarded as closed.

The broker added that this issue takes its place beside the uncertainties concerning the NHS's National Programme for IT contract, the possibility of a rights issue to refinance iSoft's balance sheet, and the limited opportunities elsewhere should the group fail to continue to secure its place as a supplier on the NHS contract.

Bridgewell said it expects iSoft's share price to continue to exhibit the same volatility in the near term that has characterised its performance in recent weeks.

and on it goes

it all gets grimmer and grimmer. i see the Daily Mail is suggesting there just may be a possibility of criminal charges ...that may be a million miles away but it is staggering that the suggestion should even arise. the directors, of such high academic/professional standing appear to have been so very silly

My belief is that the company will lose its stock exchange quotation as it may well not be able to file its accounts.
the threat of that possibility of criminal charges will prevent it doing a fresh deal with the banks re its covernants etc. ...and without the bank undertakings etc the auditors may well not be able to sign off its accounts. without its accounts it will lose its stock exchange quotation so the advice is to sell immediately

looks like it's survived for the time being.

bonfield I am janet bennison formerly candolim. I normally post to you on goo and vog. I am pleased to see some stability from good news out today. I have been holding isoft for quite some time now. infact, I can remember back in April they were at 1.60 per share. my shares at present are averaging out at .61per share. Up until today I was sitting on a terrific loss, and thought I must hang on. It not too bad now they have drroped down to .57p. are you stiil in there? I think we need to watch arefully from now on, especially now fsa are involved with accounting irreglararities. best of luck.

someones done well today, but still a long way to go before I would look at it again, however could be a rewarding ride for those brave enough, NHS isn't there only client..

I've never owned this dog! (no offence meant) I went short a couple of years ago but was a bit early. missed the boat on the short side in fact. I was considering buying in today for a short term bounce but I don't like the look of the balance sheet so have held off for time being. Might even go short next week, depends on funds etc.

btw, have you ever considered using stop losses Janet. Could save you a bundle. Not an easy habit to get into, but well worth it.

I don't own any GOO which is a pity as they seem to be the next VOG. good luck with it, I'll do some research on it and see if I can make a case for jumping on the bandwagon.

I do not understand stop losses. If you would like to give me some examples then i would aprreciate that. I think isoft could be rife to be taken over by a private equity firm. I did read a little white ago, that some of these firms were looking at isoft, but they were waiting for their results to come out. Now that this has happened today, I think that this now could be quite possible, allowing for todays news. Need to monitor this on a daily basis. need to think what sort of a view the private equitys firm may be taking over the fsa enquiry.

most takeover stories are ramps to allow city insiders to sell out into an active market. I wouldn't get your hopes up. The company is worth -120m approx according to Evil Knievel, so no one is likely to buy it. Goodwill is generally worthless when push comes to shove.

A stop loss is merely a predetermined price level at which you will sell your investment to prevent further losses. e.g. Buy at 100p, stoploss 90p. Sell if breaks through 90p. simple. If a share rises, you can raise the stop to your buy point for a break even trade if shares retrace and onwards to lock in profits.

Oh if only life were that easy. Market makers know people have stoplosses so they tend to shake the tree and manipulate prices hoping to trigger stops. You sell out only to find the shares soar a few days, hours or minutes later.

Some people use guaranteed stoplosses with brokers but these aren't always a good idea because of the above manipulation by MMs.

Still, in principle they are a very good idea. I'd read some investment books to find out more, starting with The Naked Trader by Robbie Burns.

Good luck!

thankyou bonfield I will try and get hold of this book.

bonfield, have a look at front page of saturdays financial times - isoft eyes bidders. headlines. it said several potential private equity and trade buyers are understood to have approached isoft to buy all or part of its business. What do you make of the news.

news just come out - Isoft attracting possible bidders citing bt group and us computer services corp.

wow, some bid story..... Like I said, you can ignore that piffle. If someone makes a bid I'll eat my hat....

bonfield I have still got my shares, I thought about selling today at 60 pence, but I did not. I really should have sold on friday when they went to .69pence. It is hard to know when to sell any shares. You can guarantee one thing and that is when I sell some shares that they always go up afterwards. I hope you are doing well with your holdings. especially if you have goo. I have a feeling about them that they are going to go up fast on good news. I am still clawing back losses that I made in may. Have you heard of the web sit www.britishbulls.com and the candles that tell you if the shares are bullish or bearish. if you have do you think this is good method to go by? I t would be nice to know when to sell, and when to buy. Good luck.