EMIS Group reports service failure on NHS contract, solid progress elsewhere

Connected healthcare software and services company EMIS Group issued a solid trading update for the year to 31 December 2017 on Thursday but also warned of a likes multi-million pound impact an NHS contract failure.

The AIM-traded firm said, which said geenral trading for the year was in line with the board's expectations, warned that new CEO Andy Thorburn, in his review of customer and product support processes, identified that there has been "a failure to meet certain service levels and reporting obligations" with a GP product supplied on a contract with NHS Digital.

Thorburn estimated that the financial impact will be "in the order of upper single digits of millions of pounds" and said the company will update the market as appropriate.

"I am very disappointed to find that in this area we have fallen behind the high standards of customer and product support that NHS Digital and our wider customer base have rightly come to expect of us," Thorburn said. "We have committed to resolve this situation to the satisfaction of NHS Digital and our users as soon as possible."

Otherwise, full-year revenue was slightly ahead of the comparative period as the group continued to benefit from growing recurring revenue, strong market shares and good momentum in its order books and pipelines.

The previously-announced internal reorganisation programme was completed, focusing on improving day to day operational management.

In its primary, community and acute care, EMIS said its leading primary care market share had been maintained.

“In Northern Ireland, implementation of EMIS Web for primary care is progressing well, with approximately half of the estate now live,” the board explained.

“In Scotland the process for the procurement of EMIS Web is continuing and the group expects an update shortly regarding progress in the Welsh re-procurement.”

Community market share grew with further contract wins in the period, and acute care delivered growth in the second half but the hospital market overall remained subdued.

“As well as maintaining a leading market share in community pharmacy, the roll out of ProScript Connect - the group's next generation pharmacy dispensary management product - has continued, driving a strong performance,” the board added.

Its specialist and care division delivered revenue growth and a return to profit in the second half of the year as the turnaround plan continued to be executed, it said.

In its patient business, the websites and mobile applications for both Patient.info and Patient Access had been refreshed as part of the plan to deliver an evolving online digital platform.

Looking at the books, EMIS Group had a strong balance sheet with net cash of £14.0m as at 31 December, compared to net debt of £0.4m a year earlier.

EMIS said it intended to announce its results for the year on 14 March.