EMIS Group PLC Trading Update (1407V)

TIDMEMIS

RNS Number : 1407V

EMIS Group PLC

26 January 2017

26 January 2017

EMIS Group plc

("EMIS Group" or "the Group")

Trading update for the year ended 31 December 2016

Notice of final results

EMIS Group plc (AIM: EMIS.L), the UK leader in connected healthcare software and services, today announces a trading update for the year ended 31 December 2016.

Overview

Trading in the second half of the year was consistent with the market conditions experienced in the first half and overall performance for the year was in line with the Board's expectations.

This performance was in the face of an increasingly difficult environment created by the severe pressures on NHS funds and of a procurement pause as the NHS's local plans to address its funding gap emerged (called Sustainability and Transformation Plans or STPs). Furthering the NHS's national strategy of connected care through an increasingly digitally joined-up NHS is an important part of STPs. At the same time, the Group continues to benefit from its strong revenue visibility, market shares, solid order book and pipeline.

Divisional overview

In Primary Care the Group's leading market share has been maintained and the roll-out of EMIS Web for Northern Irish GPs is ongoing although more slowly than anticipated. Market share has again increased in Community, Children's and Mental Health (CCMH). The new Community Pharmacy product is now accredited throughout the UK and has already been installed in 25 independent pharmacies. The business is also preparing for implementation of the AAH/Lloyds contract that will see market share grow close to 50%.

Secondary Care and, to a lesser extent, CCMH were most affected by the pressures on NHS funds. Secondary Care benefitted from cost-improvement measures taken in the first half of 2016 and performed largely in line with expectations. Specialist Care's performance continued to be held back by additional costs associated with the implementation of its new contracts and some operational inefficiencies, but the business is focused on improving the profit profile over the life of the contracts. Pending such improvement, the Board is considering a non-cash impairment charge to reflect the delay in contribution created by those additional costs.

On 3 October 2016 Patient.info, the UK's leading independent provider of medical and well-being information, appointed a new CEO who has two decades of digital media experience. He joined the business to accelerate its growth into a market-place e-commerce platform connecting Patient's global audience to a network of digital healthcare services. The Group is currently considering the business models and associated levels of investment required to deliver the benefits of this opportunity.

Market and internal structures

Reflecting anticipated changes in NHS models of care, the Group has decided to accelerate its internal integration in 2017. The Group is bringing together its primary, community and secondary care businesses under common leadership. This will both align the Group with the NHS's need to deliver more integrated care between hospitals, GP practices, and community services and optimise the Group's cost base. The Group will provide an update on progress and the financial implications with the final results. The majority of the integration exercise is expected to be completed by the end of the first quarter of 2017.

CEO Succession

As announced on 12 December 2016, Chris Spencer, the Group's Chief Executive, intends to retire by the end of 2017. A formal search has begun for his successor and is making good early progress.

Financial position

At its year end, the Group's net debt was GBP0.4m (2015: GBP9.1m), having acquired Intrelate Limited, provider of mobile social care software, for net cash consideration of GBP0.8m on 23 December 2016.

Notice of final results

The Group intends to announce its final results for the year ended 31 December 2016 on Thursday, 16 March 2017.

Chris Spencer, CEO 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."

For further information, contact:

EMIS Group plc Tel: [phone]

Chris Spencer, CEO

Peter Southby, CFO

www.emisgroupplc.com

   Numis Securities Limited (Nominated Adviser & Broker)          Tel: [phone] 

Oliver Hardy/Simon Willis/James Black

MHP Communications Tel: [phone]

Reg Hoare/Giles Robinson/Charlie Barker/Tess Harris

Notes to Editors

EMIS Group is the UK leader in connected healthcare software and services. Its solutions are widely used across every major UK healthcare setting from primary and community care, to high street pharmacies, secondary care and specialist care services. EMIS Group helps healthcare professionals, in over 10,000 organisations, share vital information, facilitating better, more efficient healthcare and supporting longer and healthier lives.

EMIS Group serves the following healthcare markets under the EMIS Health brand:

-- Primary and Community Care, the UK leader in clinical management systems for GPs and commissioners. EMIS Health products, including the flagship EMIS Web, hold over 40 million patient records and are used by more than 100,000 professionals in nearly 6,000 healthcare organisations.

-- Secondary and Specialist Care, a leading software provider to NHS Acute Trusts and Boards, focused primarily on hospital pharmacy, A&E (holding over 30 million patient records), and patient administration systems as well as England's leading provider of diabetic eye screening software, and other ophthalmology-related solutions.

-- Community Pharmacy, the UK's single most used integrated community pharmacy dispensary and retail system.

These markets are also supported by other EMIS Group businesses:

-- under the Patient brand, the UK's leading independent provider of patient-centric medical and well-being information and related transactional services.

-- under the Egton brand, providing specialist ICT infrastructure, hardware and engineering services, and non-clinical software into health and social care.

-- under the EMIS Care brand, providing healthcare screening programmes such as diabetic eye screening.

Information for investors, including analyst consensus forecasts, can be found on the Group's website at www.emisgroupplc.com/investors.

This information is provided by RNS

The company news service from the London Stock Exchange

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January 26, 2017 02:00 ET (07:00 GMT)