EMIS emergency over, but NHS contract failings to cost £11.2m

EMIS believes significant failings with an NHS Digital contract that it expects to cost £11.2m to resolve were a “one-time event” and the healthcare IT group can continue to grow.

Its share price plummeted 20% in a single day in January – wiping off around £120m of its value – when it revealed the failings.

However chief executive Andy Thorburn, who took over last May, is hopeful that both the customer and the markets will judge the business fairly on how it has responded.

He said: “The customer has been very pleased with how we are handling it. We found the issue, raised it with them even before we could quantify it, and went to the market quickly. My feeling is that if we continue to handles it well, our relationship with NHS Digital and the wider NHS will be stronger.”

The share price of the Leeds-based business is now trading around a three-year low, and closed last night at 720p.

“I’m hopeful the market judges it as a one-time event and rates us on our operating piece,” added Thorburn.

Its 2017 financial performance, released today, showed a 3% drop in adjusted operating profit, to £37.4m, before the exceptional costs are taken into account.

Revenues edged up 1%, to £160.4m, but with 90% of those revenues secured for this year the focus is now on driving top line growth.

Thorburn said: “I’m excited by how relevant we are in making the NHS more effective. It is genuinely exciting that we can make a difference while growing shareholder value and doing the right thing.”

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