Cerner - one of the largest suppliers of software to NHS
hospitals in England - has reported a 25% rise in net profits in
its second quarter, in the face of a recession and static
turnover.
Its net profits, which were based on US "generally accepted
accounting principles", were $43.7m [£26.7m], compared with $35.3m
[£21.6m] last year. Turnover in the second quarter was $403.8m
[£246.9m]. Global turnover fell 21%, in part because of lower
revenue from the UK, said
Marc
Naughton, Cerner's chief financial Officer.
But Cerner's directors say that turnover in the UK will pick up:
Naughton revealed that Cerner receives about £8m to £9.1m a quarter
- up to £36m a year - from the NHS's National Programme for IT.
He expects this to rise to £13.4m to £15.3m a quarter - £53.8m
to £61.1m a year - as the national programme ramps up and Cerner is
bought by more "standalone" foundation and other trusts within the
NPfIT and outside of it.
Trace Devanny, Cerner's president, said the supplier's success
with order bookings outside the NPfIT - it is supplying Newcastle
and Royal Berkshire foundation trusts - shows the strength of the
company's solution set.
He said some suppliers have been successful in the south of
England - where
Fujitsu has vacated its slot as NPfIT local service provider -
but they have simply upgraded legacy systems.
"Most importantly, we continue to be the preferred supplier for
NHS leading foundation trusts as they contract for additional
capability and capacity." He said that the company's software is
used in active projects at more than 20 trusts which between them
control about 10% of all beds in England's NHS.
He added, "I think the activity around clinical systems outside
the programme [the NPfIT] have been focused in our direction. We
think that will only continue with the good performance around
execution between now and the end of the year".
A roll-out of the Cerner system in London is due to resume after
it was halted last year because of
serious problems at some trusts.
Money owed to Cerner by Fujitsu represents about 10% of total
receivables. "While we still do not know the exact timing of when
Fujitsu and the government will unwind their contract allowing us
to finalise items with Fujitsu, we currently expect to fully
collect these receivables," said Naughton.
Cerner's share price fell by about 5% when the US markets opened
today. Its
second quarter results although strong were behind market
expectations.
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