|
I write in reply to a number of articles in recent weeks by your correspondent (Matthew Vella) concerning iSOFT, which is bidding for the Mater Dei IT contract. On behalf of the company, I must contest the inaccuracies and misconceptions portrayed in his articles, many of which appear to have been taken directly from inaccurate overseas media sources. We have previously provided Mr Vella with written clarifications and the opportunity to validate his facts prior to going to print, however, he has continued to repeat some errors.
iSOFT is a successful, market leading and innovative company dedicated to health care information solutions. It was floated on the London Stock Exchange in 2000 and has grown rapidly since then, installing healthcare IT systems for more than 8,000 customers in 27 countries worldwide and employing 3,500 staff.
In 2004, the company won three out of five regional software contracts in the GBP6 billion National Programme for IT (NPfIT) in England. NPfIT is the largest civilian IT programme in the world today and its objective is to improve efficiencies and reduce costs through the use of integrated information solutions. It is a bold and pioneering project and many other countries are watching it closely with a view to following this lead in due course.
The NPfIT project has experienced some early delays due to its sheer scale and the complexity of implementation across a public service employing more than one million staff. As a result of those delays, for the first time in its history iSOFT has issued two trading statements explaining that its profitability for the year ended 30 April 2006 will be lower than previously expected. The company’s share price has suffered as a result. However, subsequent suggestions in the UK media, and in your own newspaper, that iSOFT would be cut out of the project are entirely without foundation.
Last month, the National Audit Office published a report on the NPfIT project, which was debated in front of the House of Commons Public Accounts Committee. That report set out the reasons for delay in the NPfIT and made recommendations for moving the project forward successfully in future. Nowhere in its report does the National Audit Office attribute any blame to iSOFT for delays on the project, nor are there any suggestions that iSOFT should be replaced as a key software supplier by any of the regional prime contractors.
iSOFT has also announced recently that it is adopting a more conservative policy for revenue recognition because it is increasingly engaged in larger, more complex and long-term projects. The NPfIT is a classic example of this trend. The change in accounting policy requires the company to amend the terms of its banking facilities agreement, including covenants, and consequently iSOFT is currently in discussion with its bankers to agree those amendments.
The comment from your correspondent that a large amount of revenue has been “eliminated” as a result of the change in accounting policy is incorrect. The separate charge that iSOFT has broken its banking covenants is entirely false and potentially damaging. The existing covenants are based on the old accounting policy and iSOFT was within those covenants at the last reference point of 30 April 2006. The covenants must be re-based under the new accounting policy and that is why discussions with our bankers are taking place. In the meantime, iSOFT is not in breach of any its banking terms. This was pointed out to Mr Vella on 14 July 2006, but he repeated the erroneous charge again last Sunday.
To summarise, iSOFT remains a profitable and viable company with net cash on its balance sheet at last year end. It is a strong and creative company which is continuing to invest heavily in supporting and developing its existing products. It is also investing in the development of its next generation products, based on a service-oriented architecture that will provide flexibility, ease of upgrade and lower cost of ownership. In other words iSOFT is future-proofing its customers in the ever-changing healthcare environment through the delivery of the most advanced and innovative product in the market today.
ISOFT, in partnership with major players from the global healthcare industry including GE, Microsoft, Accenture and HP, together with local Maltese companies Exigy and Healthcare Logistics, represents a team of unequalled strength bidding for the Mater Dei Integrated Health Information Systems Strategic Partnership project. That team is offering a combination of global experience and state-of-the-art solutions, coupled with local Maltese knowledge. As the supplier of the existing hospital information system used by the Maltese Health Authorities, iSOFT is committed to working in partnership with the Maltese Government to deliver an information solution that will meet the country’s future healthcare needs.
John White
Director of Corporate Communications
iSOFT Group plc.
|
