iSOFT swings to $84m loss
- 28 February, 2011 08:32
Health IT company iSOFT (ASX:ISF) swung to an $84.1 million net loss in 1H11, due to restructuring costs and impairment charges.
ISF shares fell 10.29 per cent to $0.061 in Friday's trading following the announcement.
The company, which had made a $4.8 million profit in 1H10, spent the most recent half attempting to restore the financial health of the business.
These efforts generated redundancy, property exit and restructuring and refinancing costs of $15.8 million for the quarter.
Revenue also declined 27 per cent to $161.6 million, due mainly to an anticipated $20 million decline in revenue from the UK's National Programme for IT.
The company also took a $37 million impairment due to reduced revenue projections in some markets.
But ebitda swung to a positive $9.8 million, from a negative $8.4 million in the second half of FY10, as the benefits of the restructuring efforts started to be felt.
iSOFT also cut operating expenses by nearly $20 million, largely by reducing its full-time employee headcount by 28 per cent and slashing discretionary spending. The company said it expects to be able to achieve its planned $30 million in cost reductions for FY11.
The company said it now expects to earn slightly lower than its previously predicted $370 million in revenue for FY11, and is forecasting revenue of $200 million for the second half.
But it maintained its guidance of full-year ebitda margins of 10-12 per cent, before restructuring costs and one-off items.