Manchester, UK-based iSoft said that, under a new accounting policy for revenue recognition, pre-tax profit for the year to April 30 2006 would be between 3m pounds ($5.5m) and 7m pounds ($12.9m), compared to earlier estimates of between 17m pounds ($31.4m) and 22m pounds ($40.7m).
The company also lowered its guidance for annual sales to between 195m pounds ($360.5m) and 200m pounds ($369.7m) from earlier forecasts in the range 210m pounds ($388.2m) and 215m pounds ($397.5m).
iSoft said that it was looking to reduce operating costs by around 30m pounds ($55.5m) by the end of the current financial year, and as a result it was planning to cut around 150 staff from its UK operation, representing about 15% of total headcount in the UK. The company estimated the cost of this action at around 3m pounds ($5.5m).
Over the last six months, iSoft has been beset by concerns over its contracts with the UK National Health Service. The company is the main application provider on the Accenture-led North East and East of England clusters, and was publicly blamed by Accenture for causing costly delays to the project.
In January 2006, iSoft shares on the London stock exchange were trading at just under 400 pence ($7.39). However, a series of sharp falls has pushed the company’s share value down to below 100 pence ($1.85) in less than six month. Following this latest slump, shares in iSoft were trading at just over 60 pence ($1.11).
