iSoft limps on after posting loss
The future of iSoft remained in doubt on Monday after the struggling UK software vendor announced it had recorded a loss for the last six months.
iSoft made a loss of £14.6m between May and October 20056, compared to an £8m profit it reported for the same period the previous year.
This latest loss comes on top of the £343.8m loss iSoft recently reported for the 2005-2006 financial year, after the company was forced to change its accounting practices.
John Weston, iSoft chairman, admitted on Monday that iSoft needs more financial support if it is to survive for more than another year.
"We have secured bank funding until late 2007, but it is clear that if the business is to prosper we must soon put in place long-term funding arrangements," said Weston in a statement, adding that iSoft is still talks with a number of parties who are interested in buying a stake in the company or taking it over.
Despite the £14.6m loss, shares in iSoft rose by more than 14 percent to 46.5p, as city traders had expected the company's financial results to be worse.
iSoft is playing a key role in the multi-billion pound project to upgrade the NHS's IT systems. However, its involvement has been overshadowed by delays and investigations into its financial practices. In September, Accenture — which had subcontracted iSoft to supply its Lorenzo clinical records software — pulled out of the NHS Connecting For Health project altogether. A leaked Accenture internal report had already warned that there was 'no believable plan' for the delivery of Lorenzo.
iSoft's financial affairs are being investigated by both the Financial Services Authority and the Accountancy Investigation and Disciplinary Board. The AIDB is probing the actions of several current and former executives.
iSoft is also subcontracted to provide its Lorenzo software to CSC, which has taken over Accenture's former role in Connecting for Health. Weston claimed this deal has helped to stabilise iSoft's financial future.
"We have made significant advances since the middle of 2006," Weston said. "We have still to put long-term financing in place but iSoft is today in considerably better shape than it was a few months ago."