Notes from the City: EMIS group affected by NHS funding cuts; ZOO Digital expects stellar performance
Healthcare software company EMIS Group said it had performed well in an “increasingly difficult environment” due to pressures on NHS funds and a procurement pause in local plans.
For the year to December 2016, EMIS said its secondary care division’s performance was held back by additional costs associated with the implementation of its new contracts and some operational inefficiencies.
It said that it had decided to “accelerate its internal integration” in 2017, bringing together its primary, community and secondary care businesses under common leadership.
Chris Spencer, the group’s Chief Executive, announced his intentions to retire by the end of 2017 and a search has begun for his successor.
At its year end, the Group’s net debt was £400,000 (2015: £9.1m), having acquired Intrelate Limited, provider of mobile social care software, for net cash consideration of £800,000 on 23 December 2016.
Chris Spencer, chief executive of EMIS Group, said: “Our businesses have continued to deliver results in line with our expectations, despite headwinds created by the NHS funding gap.
“The NHS’s process of planning to bridge its funding gap continues to cause sluggishness in immediate procurements. However, that planning emphasises the Group’s unique ability to provide software that helps bridge the gap.
“In light of the proactive operational steps we are taking, together with our strong revenue visibility and solid order book and pipeline, we remain confident of overcoming the headwinds and delivering a positive performance in 2017 and beyond.”
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ZOO Digital Group plc, the provider of subtitling and digital distribution services for the entertainment industry has seen increased momentum in the first half of the year.
It said it expects its second half performance to show less seasonal variation in terms of both Revenue and EBITDA, with reported EBITDA for the full year expected to be at least $1.8m.
This means the company expects to deliver significant improvement for the full year.
Cash flow has improved month on month and continues to do so, it said, but the overall working capital position is currently constraining the volume of new business that the Company can take on.
Stuart Green, Chief Executive of ZOO, (pictured above) commented: “The fact that our second half performance will show an improvement over prior years is a significant factor for ZOO. The business has been typically weighted to the first half due to our reliance on a small number of customers and on the seasonality of the home entertainment market.
“This performance demonstrates our success to date in diversifying our revenue streams but also points to the transformational change that the entertainment industry has undergone and the strength of our offering for digital distribution.”
