iSoft revises down fiscal 2010 results

Comes despite reassurances in March that revenues were on track

iSoft (ASX:ISF) has revised its revenues down for the full 2010 fiscal year by as much as $30 million following a confluence of market events.

In an ASX update, the e-health provider said its revenue for fiscal 2010 was now in the range of $440 to $455 million while EBITDA was now 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.

The announcement follows a market update as recently as March which advised that the company remained on track to achieving its revenue guidance.

In the current ASX update the company said that despite the “go-live” of its Morecambe Bay project under the UK’s National Program for IT (NPfiT), political uncertainty leading up to the recent UK election, and the subsequent change of government had seen the deferral of decisions related to the NPfiIT – particularly for implementation partner CSC.

“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 clyster of English hospitals, as well as delays in milestone payments,” the statement reads.

“The revenues associated with this agreement had been anticipated in fiscal 2010 and are now anticipated in fiscal 2011. However, as with many commercial negotiations, there is no certainty that revenues will ultimately flow.”

In the March market update iSoft said it was then currently in negotiations with CSC on a revised agreement. This agreement was expected to underpin the second half of fiscal 2010 and lead to benefits in 2011 and beyond.

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