iSOFT reveals £382m loss

Troubled software firm iSOFT – a key supplier for the NHS’s £12.4bn National Programme for IT (NPfIT) – has revealed a £382m loss in its delayed full year results.

Troubled software firm iSOFT – a key supplier for the NHS’s £12.4bn National Programme for IT (NPfIT) – has revealed a £382m loss in its delayed full year results.

The software firm’s Lorenzo electronic patient record system was selected as the basis of the key care record service component in three out of the five NPfIT geographical clusters.
 
The company had twice delayed its results and has been forced to change its accounting rules after irregularities were found in its 2004 and 2005 accounts. Earlier this week, the Financial Services Authority confirmed it had launched an investigation into iSOFT.

Steve Graham, iSOFT’s group commercial director, was suspended earlier this month, pending “a more formal investigation”, the company said.

In his report, iSOFT chairman and acting chief executive John Weston said the second half of the financial year ended 30 April 2006 had been “a turbulent period”, triggered by the need to issue a revenue and profit warning in January. This was “primarily due to delivery and implementation delays” connected with NPfIT, he said.

Weston added that “the sheer scale of the project and its pioneering aspects have resulted in delays to the delivery schedule for a wide variety of reasons, some of which are beyond iSOFT's control”.

The company has come to a new financing arrangement with its banks, and is also revising NPfIT delivery schedules and payment milestones “in all regions, affecting most contracted parties”.

The software supplier had signed an agreement with lead contractor CSC confirming details of £153m of products and services to be delivered – including £36m already delivered – “with the opportunity to win additional NPfIT business in future through CSC in certain circumstances”.

The deal confirms that CSC will have the right to take over the management of the development team if iSOFT is unable to fulfil its obligations.


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