14 Jul 2016 07:00
14 July 2016
EMIS Group plc
("EMIS Group" or "the Group")
Trading update for the six months ended 30 June 2016
EMIS Group plc (AIM: EMIS.L), the UK leader in connected healthcare software and services, today announces a trading update for the six months ended 30 June 2016.
Overview
Trading for the half year has been broadly in line with the Board's expectations despite the uncertainty created by the EU Referendum and the ongoing slower than expected rate of contract awards in larger NHS procurements. The Group continued to benefit from its revenue visibility, growing market shares and good momentum in its order books and pipelines. The previously flagged cost reduction programme has been expanded and will benefit the second half. The Board's expectations for the full year remain unchanged.
Divisional review
In Primary & Community Care, EMIS Web continued to lead the market with a UK share of 55%. In Northern Ireland, implementation of EMIS Web for primary care is expected to begin before the end of the year and to conclude in 2017 and in Scotland engagement for the procurement of EMIS Web has now begun. The Group's Child Community and Mental Health (CCMH) market share grew to 14% with a further seven contract wins in the period, including two in the re-procurement of former NHS National Programme contracts, and there is a strong pipeline of opportunities for the remainder of 2016 and into 2017.
As well as maintaining a leading market share of 36% and a pipeline of opportunities in Community Pharmacy, ProScript Connect, the Group's next generation pharmacy dispensary management product, secured accreditation in both Wales and Scotland with the live roll-out in Wales beginning in the second quarter. Accreditation in England is in hand with planned completion by the end of the year. Preparation continues on track for implementation of the agreement with AAH Pharmaceuticals, adding up to 1,800 sites to the Community Pharmacy estate over the next 18 months.
EMIS Health Secondary Care performed largely in line with expectations and secured the formal award of a contract for a Patient Administration System in Northampton for delivery in 2016, continuing the strong flow of mid to smaller contracts highlighted at the time of the AGM in April, which will contribute to the second half. The business also reached agreement with the UK's other major provider in hospital pharmacy, to create an electronic procurement hub to replace manual processing, minimise errors and thereby improve care and reduce NHS costs.
As well as maintaining its position as the leading software provider in English diabetic retinopathy screening, Specialist Care also secured three further five year contracts for screening provision. Together with the awards announced previously, these will be implemented during the second half of 2016 and 2017. Financial performance in this division during the period under review was held back by additional costs associated with the implementation of new contracts in areas previously operated by the NHS, with the profit profile expected to improve as operational efficiencies are realised over the life of the contracts.
Financial position
The Group's net cash at 30 June 2016 was £0.7m (31 December 2015: net debt of £9.1m). The balance sheet has subsequently been further strengthened by the £1.5m net proceeds from the sale of the Group's minority investment in Pharmacy2U completed on 2 July 2016. Against a backdrop of political and economic uncertainty, the previously announced cost reduction programme, impacting primarily on Secondary and Specialist Care, has been expanded and as a result the Group now expects to report a one-off charge of approximately £2.2m in the first half, the benefits of which will be felt in the second half.
Chris Spencer, CEO of EMIS Group, said:
"EMIS Group has continued to deliver results in line with our expectations. Planning for the roll-out of EMIS Web in Primary Care for Northern Ireland is ongoing and engagement for the procurement in Scotland has begun. We have again increased our market share in CCMH. Community Pharmacy secured new product accreditation in Wales and Scotland and continued implementation planning for a contract that will grow our market share to close to 50%. In Secondary Care & Specialist Care we secured contracts, maintained substantial market shares and further built our pipeline.
"While ongoing political and economic uncertainty causes both turbulence and sluggishness, nonetheless the NHS continues to understand that our digital technology and patient information platform represents a unique connected care solution to the challenge to deliver faster, better, more cost-effective care. We therefore remain confident in the outlook for the business."
For further information, contact:
EMIS Group plc Tel: 0113 380 3000
Chris Spencer, CEO
Peter Southby, CFO
www.emisgroupplc.com
Numis Securities Limited (Nominated Adviser & Broker) Tel: 020 7260 1000
Oliver Hardy/Simon Willis/James Black
MHP Communications Tel: 020 3128 8540
Reg Hoare/Giles Robinson/Charlie Barker/Tess Harris
Notes to Editors
EMIS Group is the UK leader in connected healthcare software and services. Its solutions are widely used across every major UK healthcare setting from primary and community care, to high street pharmacies, secondary care and specialist services. EMIS Group helps clinicians, in over 10,000 organisations, share vital information, facilitating better, more efficient healthcare and supporting longer and healthier lives.
EMIS Group serves the following healthcare markets under the EMIS Health brand:
• Primary and Community Care, the UK leader in clinical IT systems for GPs and commissioners. EMIS Health products, including the flagship EMIS Web, hold over 40 million patient records and are used by nearly 6,000 healthcare organisations, including community-based teams.
• Community Pharmacy, the UK's single most used integrated community pharmacy and retail system.
• Secondary and Specialist Care, a leading software provider to NHS Acute Trusts and Boards, focused primarily on Hospital Pharmacy, A&E (holding over 30 million patient records), and Patient Administration Systems as well as England's leading provider of diabetic eye screening software and other ophthalmology-related solutions.
These markets are also supported by other EMIS Group businesses:
• under the Patient brand, the UK's leading independent provider of patient-centric medical and well-being information and related transactional services.
• under the Egton brand, providing specialist ICT infrastructure, software, hardware and engineering services.
• under the EMIS Care brand, providing healthcare screening programmes such as diabetic eye screening programmes.