iSoft issues second market update

ASX-listed e-health provider iSoft (ASX:ISF) has moved to reassure investors, following a halving of its share price, since it issued a market update on the state of the company at the start of June.

In the current update, the company said that some investors had inferred from its 2 June 2010 market update that there were issues with its' Northern Cluster Contract – part of the UK’s National Program for IT (NpfIT) to which iSoft, and partner CSC, are major providers.

“This [inference] is not correct,” the update reads. “Our relationship with CSC is strong and the joint achievement of the successful ‘go live’ of Lorenzo Regional Care 1.9 at The University Hospitals at Morecambe Bay under the Northern Cluster Contract is a significant achievement…

“The Northern Cluster Contract remains on foot and we continue to work with CSC in the continued roll out of the Early Adopter program for hospital trusts in that region.”

The company said that while it had not finalised all order intake for financial year 2010, it expected that the revenue derived from CSC under the Northern Cluster Contract is likely to represent 15 to 20 per cent of its total revenue.

Following the announcement in June, iSoft’s price declined from around $0.58 per share to $0.28 per share at the time of writing.

As reported by Computerworld Australia iSoft on 2 June revised its revenues down for the full 2010 fiscal year by as much as $30 million following a confluence of market events.

At the time the company said its revenue for fiscal 2010 would now be in the range of $440 to $455 million while EBITDA was likely to be in the range of $45 to $60 million.

In February the company reported a full fiscal 2010 outlook of $470 million and an EBITDA of $113 million.

The company also reported a first half fiscal 2010 results which included revenues of $237.3 million and an EBITDA of $40.8 million.

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