Lorenzo software vital to iSoft's future

iSoft has reduced its losses

Troubled healthcare supplier iSoft says delivery of the next-generation Lorenzo hospital administration software is crucial to its financial recovery.

The firm made annual pre-tax losses of £22m for the financial year ending in April ≠ considerable progress from the massive £343m losses in 2005-6.

But iSoft says strong future revenue growth will rely on overseas sales of the Lorenzo product being developed as a key part of the £12bn National Programme for NHS IT (NPfIT).

Under iSoftís commitment to NPfIT systems integrator CSC, Lorenzo will be ready for rollout in early 2008. Financial benefit from international sales will start in 2009, says acting chief executive John Weston.

'We have made significant progress restoring iSoft to a position of solid value,' he said.

The company is also involved in continuing sale negotiations.

A £160m offer from German healthcare specialist CompuGroup was received last month, beating an earlier, shareholder-endorsed £142m bid from Australia's IBA Health. The CompuGroup deal is expected to be approved at a general meeting on 31 August, says iSoft.

The takeover bid is essential, says Ovum analyst Tola Sargeant.

'The balance sheet remains precariously positioned and it is clear just how desperately it needs the acquisition by CompuGroup to proceed,' she said.

Full-year sales fell 13 per cent to £175m and UK sales dropped even further by almost 18 per cent to £104.8m.

'Although there is still a lot of work to do, iSoft is in fact in a much stronger position today than it was a year ago,' said Sargeant.