Emis shares drop as company misses profit expectations

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MEDICAL software group Emis said it made rapid progress in 2012, but its shares fell as the company missed profit expectations.

The Leeds-based company moved from “controlled to accelerated” status with the roll-out of its Emis Web software. The software links medical professionals and allows them to share patients’ records digitally.

Emis said 1,635 GP practices were live with Emis Web by the end of 2012. There were another 1,252 unfulfilled orders for the system at the year end, and 2,564 surgeries were testing it.

It said revenues for 2012 are expected to be at least £86m, up from £73.2m a year ago.

But that was below the £87.3m expected by house broker Numis Securities, which also cut its underlying earnings forecast to £22.8m from £23.9m. Emis blamed the miss on delays with an Australian defence contract, its decision to chase market share after the exit of a competitor and the higher costs from the faster Emis Web roll-out.

Its shares closed down

“The market is the market,” said chief executive Sean Riddell. “It seems to be quite a severe reaction but these things have a tendency to correct themselves.

“2012 has been one of our busiest years. We spent more in the last quarter to get more business in 2013. What we had in the last quarter was some unusual circumstances which do not happen that often.”

By the end of 2012 the group had increased its workforce to 1,236, from 1,112 six months earlier.

Its capital spending doubled to £13m, including £1.8m spent on its new 34,000 sq ft office at Rawdon House in north Leeds. Emis revealed it also bought the remaining 75 per cent of retail systems supplier Multepos it did not own, paying £0.8m.

Chris Glasper, analyst at N+1 Singer, said while a “disappointing” update, it was a “minor setback”.

“We continue to view EMIS as the highest-quality play in the healthcare IT sector,” he said.