Healthcare software specialist EMIS delivered a strong first-half performance and prospects for the full-year look good - judging by the backlog of unfulfilled orders. Government changes to the NHS also bode well for EMIS's prospects, but - after a strong run - the shares look up with events.
EMIS's core product is a hosted patient records system for GPs - by end-August that was already installed with 958 UK GP practices, with a further 1,326 unfulfilled orders on the book and over 2,800 practices undergoing a familiarisation stage. EMIS is capable of installing 200 systems a month. Moreover, by running its own data centres, EMIS gets the full benefit of its recurring revenues - these rose 15 per cent in the period to £34.4m. Management is especially excited about the potential for further growth once GPs take control of their budgets from next April.
The appeal of EMIS's growing suite of healthcare software is widening as other healthcare services look to modernise their operating processes and the way in which they communicate with patients and each other. Indeed, by end-June, 172 other healthcare services were using the EMIS's web product, while its RX Systems product is used by more than 4,500 pharmacies.
Broker Peel Hunt expects full-year adjusted EPS of 29.1p (26p in 2011).
EMIS (EMIS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 715p | MARKET VALUE: | £406m | |
| TOUCH: | 695-720p | 12-MONTH HIGH: | 730p | LOW: 398p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 96p* | NET CASH: | £17.7m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 35.5 | 10.2 | 13.2 | 6.20 |
| 2012 | 42.3 | 12.1 | 16.3 | 7.10 |
| % change | +19 | +19 | +24 | +15 |
Ex-div: 19 Sep Payment: 26 Oct Includes intangible assets of £51m, or 90p a share | ||||
