EMIS aiming to capitalise on NHS shake-up

HEALTHCARE software group EMIS said it continues to make further strides into GP surgeries, as it capitalises on reforms to the National Health Service.

The Leeds-based company believes it will benefit from Government plans to place responsibility for decision-making and commissioning of NHS services in the hands of doctors.

Last year's NHS White Paper proposed the abolition of primary care trusts, replacing them with consortiums of GPs.

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EMIS, which floated on the Alternative Investment Market last March, computerises patients' records and links GPs and other medical professionals, allowing them to share data.

Its newly-launched EMIS Web service connects GPs with other NHS professionals by enabling secure and shared access to patients' electronic records.

It allows medical staff – from chiropodists to neurosurgeons – access to patients' cradle-to-grave medical histories at the click of a button, allowing them to make faster and better-informed decisions.

"Government proposals... for the transformation of healthcare delivery in the UK are expected to open up new markets in relation to extended care and EMIS Web is well placed to take advantage of these developments," said the group.

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By the end of the year, EMIS Web had been rolled out at 44 GP surgeries, with a total 433 having ordered the service. Another 1,665 practices have ordered an EMIS Web 'familiarisation service', which allows doctors to run the tool alongside their existing software to judge the difference.

The company said it is already well embedded in the new GP consortiums. Of the first wave of 52 GP consortiums announced so far, covering 1,860 or 22 per cent of GP practices, EMIS said it is already a major supplier to 40 of these, representing 77 per cent.

"The current environment continues to offer opportunities for EMIS, but our key focus remains on the controlled roll-out of EMIS Web," said chief executive Sean Riddell.

"The considerable interest in EMIS Web shown by GP practices is pleasing, with increasing numbers of orders since we received accreditation and favourable initial feedback from those GP practices where EMIS Web has already been deployed."

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The NHS revolution yesterday came under fire from MPs and doctors when a report by the cross-party Commons Health Committee warned it would be a "significant institutional upheaval" without really changing its aims.

The report added ministers have failed to show the plans represent the most "efficient" way of delivering good patient care, while some risks to the health service will increase.

EMIS said it traded in line with expectations in 2010, benefiting from higher-margin recurring revenues as more GP surgeries moved onto EMIS hosted computer servers.

Combined with a trend of lower spending on hardware, engineering and training, this meant the group's core recurring revenues grew to 81 per cent of turnover in the year, compared with 75 per cent in 2009.

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In Scotland the group has grown its market share from 132 practices – equivalent to 12.7 per cent – to 530 GP surgeries by the end of the year, equating to a 51.5 per cent market share.

In August, it bought 78.9 per cent of a software firm to enter the pharmacy market. It could end up paying 9.95m for Rx Systems, which has developed a range of systems and services for pharmacies to increase efficiency and record data.

At the time of purchase, Hertfordshire-based Rx counted 2,500 pharmacies as its customers, representing a 20.5 per cent share of the market.

Since then it has expanded further into the UK's 12,200 pharmacies, boosting its market share to 25 per cent.

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EMIS expects Rx to add to profits in the first full-year of owner-ship.

EMIS is also weighing up what to do with its Canadian operation, which analysts believe has proved a drag on performance. Accounting for less than one per cent of revenues in 2009, it is under strategic review.

Roger Phillips, analyst at house broker Evolution Securities, said EMIS warrants a buy recommendation as the company is "delivering on promises". He sees the group reporting pre-tax profits of 16.5m for 2010, up 4.5m on 2009.

Shares in the company lifted 4.4 per cent yesterday to 434.25p. Evolution has a 459p target price.

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"We believe the core UK business was ahead of expectations, offset by softness in Canada," said Mr Phillips.

"EMIS executed successfully on multiple fronts in 2010; market share in Scotland expanded dramatically and the acquired Rx Systems performed well.

"Importantly, momentum for EMIS Web is building fast for 2011 and beyond.

"With upside potential to forecasts due to the EMIS Web rollout, allied with a strongly defensive business model, we believe a premium to the sector is deserved, and so reiterate our buy."

New tool to monitor flu

EMIS has launched a new tool to help GPs monitor flu rates.

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The QFeedback portal is an online resource that allows GPs to compare their flu rates and vaccination uptake with national levels.

It allows comparison with other GP practices with a similar population. Data can be viewed as graphs, maps or tables.

"It will be of enormous value in gauging levels of infectious diseases such as flu very quickly," said Dr Julia Hippisley-Cox, professor of Clinical Epidemiology and General Practice at the University of Nottingham and co-founder of QSurveillance.

The tool is the latest product of EMIS's long-established tie-up with the University of Nottingham.