Pre-tax profits double at Leeds healthtech business

Healtech and software business EMIS group has more than doubled pre-tax profits despite a decline in NHS spending which is causing it to restructure.

The company reported pre-tax profits for the year to December 2016 of £25.3m, up from £10.9m the year before.

Revenues increased 2% to £158.7m, but the Leeds-based company warned that the gap continues to widen between the healthcare demands of a growing population and the government’s desire to cut spending on the NHS.

It said that “counter-intuitively” the development of Sustainability and Transformation Plans has caused another hiatus in the deployment of planned funds for NHS IT transformation.

EMIS said it was undertaking a ‘structural re-organisation’  in Primary Care, CCMH, and Secondary Care, to improve efficiency. It said it was in the process of cuttign 100 jobs as a result. The company said this will initially cost £3m, but will create savings of £3m this year, rising to £4m on an annual basis.

Chris Spencer, chief executive officer of EMIS Group, said: “Overall our businesses continue to deliver results in line with our expectations. This is despite headwinds created by the NHS funding gap which create a difficult operating environment for the Group with delays to the pace and level of procurement activity.

“The NHS’s plans to bridge its funding gap continue to cause sluggishness in immediate discretionary procurements. However, that planning process highlights the Group’s unique ability to help bridge the gap. To quote the recent Wachter Report commissioned by Jeremy Hunt, Secretary of State for Health:

‘In order for the National Health Service to continue to provide a high level of healthcare at an affordable cost it simply must modernise and transform. … But none of the changes are likely to be as sweeping, as important, or as challenging as creating a fully digitised NHS.’

“In light of the proactive operational steps we are taking, including structural reorganisation to improve efficiency and better align the Group with its customer base, investment in a patient-centred digital platform, and continued strong revenue visibility alongside a solid order book and pipeline, we remain confident in overcoming short term headwinds and securing a positive outlook in 2017 and beyond.”

EMIS has sites in Bolton, Cambridge, Hampshire, Sheffield, Southampton and Watford. It also has offices in Victoria, Australia.