UK-based healthcare technology provider iSoft has released strong full year financial results.
In the year to April 30, net income climbed 138.7% to GBP25.2 million pounds on revenue 75.3% higher at GBP261.7 million. While the bottom line growth is impressive, and shows the synergies realized from the Torex acquisition, only 7% of the revenue increase was organic growth.
The Manchester, UK-based company is bound to see revenue growth helped up as it lops back its services operation, and particularly hardware sales, in favor of a pure software licensing model.
The Torex acquisition was mainly beneficial for its installed base and iSoft says that most of the savings of GBP12.2 million were made last year. The merger has given the company the muscle to complete in world markets where its main competitors are the two US software providers, IDX Systems and Cerner, while in Europe Siemens offers software as well as an extensive portfolio of medical equipment.
ISoft has won contracts for its software in three of the five UK NHS regions and is increasingly looking overseas, where it currently derives 36% of its revenue. House broker Bridgewell Securities expects revenue to grow 13% to GBP301.2 million in 2006, but this takes no account of the possibility of further acquisitions.
In Europe growth prospects are modest, given the economic problems in so many markets, but iSoft says it is now being invited to tender for significant contracts worldwide.
With much of its development workforce in India, iSoft seems well placed to make progress with its core application known as Lorenzo. Yet no software developer can hope to succeed in world markets if it fails to make progress in the US and iSoft says it is examining the market there in greater detail.
