Emis Group confident despite uncertainty over NHS spending

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Healthcare software firm Emis Group ​has ​expressed confidence going forward, despite ​concerns about NHS spending following the Brexit vote.

​​The Leeds-based group said it has maintained market share in​ ​order books and pipelines​ ​despite the uncertainty created by the EU​ ​referendum and the slower than expected rate of contract awards in larger NHS​ ​procurements.​

​​Emis CEO Chris Spencer said:​ ​​“I don’t think Brexit has a direct effect on the NHS. It has an indirect effect in that sometimes it buys products from the EU.

“Last year 15 per cent of people who joined the NHS came from the EU. The chief of the NHS has had to write to these people to say you are very welcome.”

​Emis saw an impact on contract awards caused by the uncertainty.

“Bigger contracts were sluggish because of the uncertainty. There was political uncertainty and also a number of hospital trusts have started to merge so they are not looking at new systems,” said Mr Spencer.

“We say sluggishness rather than pausing or stopping.​ We have announced some big contracts. They are just not flowing quite as freely as historically.

“When your car breaks down for the fourth time, you say ‘I’ve run it into the ground and need to buy a new one’. Some NHS systems are like that.”

Group revenue rose 1 per cent to £78.7m in the six months to June 30, lower growth than previously which reflected a limited contribution from acquisitions and revenue headwinds in NHS spending. Recurring revenue rose by 6 per cent to £64m.

Adjusted operating profit rose 5 per cent to £17.7m.​ The firm​ ​saw ​pre-tax ​profits dip 10 per cent to £12.2m following one-off charges.

A​nalysts said the future looks bright for ​Emis following the Government’s announcement in February that £4.2bn –​ ​including an apparent £1.3bn of new funding – would be spent on NHS IT over the five years​ ​of the current parliament.

A​sked whether he trusts the Government to deliver this, Mr Spencer said: “Yes I do. First of all the NHS is a political sacred cow. It’s one of the few we have left.

“The Government knows people are getting older and living longer. We also have an epidemic is relation to Type 2 Diabetes​.”

Analyst Paraag Amin at Peel Hunt said: “Despite ongoing, post-referendum, political and​ ​economic uncertainty, the NHS continues to affirm E​mis​ Group’s strategy of providing change-delivering digital​ ​technology helping to create faster, better, cheaper care – the​ ​outlook for the full year remains unchanged, with strong revenue​ ​visibility, growing market shares especially in CCMH and​ ​Community Pharmacy, and good momentum in order books and​ ​pipelines​.”