iSoft shares collapse1st March 2006
Shares in Health IT solutions provider iSoft plummeted at the end of January on news that profits would be hit by delays to its NHS roll-out programme.
In a trading statement the company says "...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."
iSoft predicted that its profits would be some £55m lower than expected because of delays to the NHS Connecting for Health programme. However, despite the company's reassurance that the rest of its business was not affected, iSoft shares initially crashed by 42% from more than £3.50 to under £2.00. In the days that followed the share price fell further to a low of £1.62.
NHS Connecting for Health were quick to issue a statement following the iSoft share price collapse:
"The National Programme for IT, delivered by NHS Connecting for Health, is within budget, ahead of schedule in some areas and broadly on track in others. The programme now has 180,000 registered users across England, has delivered new systems to thousands of locations and is benefiting millions of patients.
Some local service provider 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.
In the context of a ten year programme the impact of the rescheduling is not significant and we can report that in the Eastern, North East and North West & West Midlands clusters – where iSoft solutions are being deployed – some 900 sites have had iSoft solutions installed, which are being used by more than 25,000 users.
Suppliers do not get paid until they deliver - which demonstrates the strength of the contracts and the way they protect the public purse. Completion risk lies with suppliers. We continue to look to our prime contractors who are responsible for managing their software suppliers’ performance."
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Tuesday 25th April 2006 @ 11:18
Whoops. I had shares in this company and didn't see this coming at all. The question now is whether to stick with the long term view that all will come right in the end or not.
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Title: iSoft shares collapse
Author: Chris May
Article Id: 113
Date Added: 1st Mar 2006