Sydney, Aug 25, 2008 AEST (ABN Newswire) - IBA Health Group Limited (ASX:IBA)(PINK:IBATF) - Australia's largest listed health information technology company, today announced its full year results for the year ending June 30 2008.
IBA Health Group has recorded revenues of $361 million, up 381% (FY07 $75 million), and an underlying EBITDA(2) of $106 million, up 232% (FY07 $32 million), reflecting the eight-month contribution from iSOFT which was acquired in November 2007.
The reported NPAT of $14.4 million includes significant items of $35 million (comprising amortisation of intangibles on acquisition, integration and one-off acquisition costs and impairment charges), making an underlying NPAT(1) of $49 million, up 113% (FY07 $23 million) against FY07.
HIGHLIGHTS---------------------------------------------------------- FY08 result ahead of EBITDA guidance- Underlying earnings(1) per share accretion- $463 million iSOFT acquisition and integration completed- Integration synergies in excess of $27 million from FY09- Revenue base transformed - Annualised group revenues - $472 million - Over 80% of group revenues are now sourced from operations outside of Australia and South East Asia. - Over 80% of FYO9 revenues are recurring, contracted or expected. - Global launch of LORENZO in FY09- Outlook guidance of 18% revenue growth on the annualised revenue base---------------------------------------------------------
Executive Chairman and CEO of IBA Health Group, Gary Cohen said, "2008 has seen a transformational change in the IBA business. With the iSOFT acquisition we have created a global health IT company and a strong platform for future growth.
"We now have an international footprint of over 13,000 customers providing substantial recurring revenues and a base primed for the release of our next generation products.
"FY09 will see the global launch of our unique next generation platform LORENZO, delivering a transformational Service Oriented Architecture (SOA) based healthcare platform to our existing customers and driving future global growth opportunities.
"We are pleased to announce that we have exceeded our EBITDA guidance and delivered significant underlying earnings per share accretion. This has been achieved through additional revenue under the UK National Programme, tight cost control and higher integration synergies than we originally indicated, despite encountering some negative impact of the stronger Australian dollar over the period" concluded Mr Cohen.
The integration of iSOFT into the IBA business was successfully completed by 30 June 2008. Annual cost synergies in excess of the anticipated $27 million have been extracted during the financial year and will fully feature in the FY09 results and help underpin the forecasts.
As anticipated, IBA's cash flow position strengthened significantly in the second half of the financial year recording an operational cash flow of $25 million (not taking into account four months of the UK Existing Service Agreement (ESA) prepayments totalling $29.7 million) for the second half. The cash flow for FY09 will benefit from the cancellation of the ESA prepayments that occurred in April. This is expected to improve operational cash flow for FY09 by approximately $70 million.
IBA's net debt to equity ratio was 42% at the end of June. This is expected to reduce to 34% by the end of FY09. With the substantial reduction in contract financing during the year, we would expect to have surplus cash from FY09 available to reduce our debt facilities.
IBA management has successfully renewed customer confidence in a number of key iSOFT customer accounts, retaining relationships and accessing business that had previously been on hold, awaiting the successful completion of the acquisition.
The key relationships with National Health Service ('NHS') in the United Kingdom and the Irish Health Service Executive have been enhanced at the strategic and operational levels and additional contracted revenues secured. Furthermore, in the UK a strategic partnership model has been established with Computer Sciences Corporation ('CSC') in relation to the NHS's National Programme for Information Technology ('NPfIT') contract.
Long term contract renewals have also been achieved in continental Europe following the stabilisation of the iSOFT customer relationships, whilst in Australia and South East Asia the company has continued to be successful in winning new business both at the State level in the acute hospitals sector and with significant corporate players in the primary care sector.
During the past 6 months a number of internationally experienced senior executives have been appointed in the business and a new operating structure and business model reflecting the now global nature of the company has been put in place.
As part of our ongoing exercise to strengthen the group's position in the market, we have implemented the iSOFT brand for the group's products and services globally. This supports and underpins the planned marketing activity for our strategic LORENZO platform.
The global launch for LORENZO is planned for November 2008. The roll-out of LORENZO for the UK NPfIT program is on track with the current agreed timetable.
For FY09 the company plans to invest an additional $21 million in capital expenditure and $26 million in operational expenditure to provide the capacity to increase the overall productivity and operating margins of the business, with the medium term goal for the group to achieve EBITDA margins of 30%.
The company has provided guidance for FY09 revenues which will reflect a full 12 month contribution from the iSOFT operations.
The group forecasts for FY09 are:
- Revenue of $540 - $560 million(4)
- EBITDA of $120 - $130 million(4)
(4) Assuming AUD / GBP 0.469; AUD / EURO 0.590; AUD / INR 39.000
The Board expects to reinstate the payment of dividends for FY09.
Commenting on the results Gary Cohen said: 'I am extremely pleased with the success of the iSOFT acquisition. In eight months we have completed the integration, successfully extracted our targeted synergies and significantly enhanced the financial strength and cash flows of the operation. During this time we have also put in place a new invigorated senior management team, while maintaining and enhancing our key customer relationships. We also operate in the public healthcare sector of the global economy that shows significant resilience to economic downturns. All this provides confidence that we are well positioned to deliver the benefits to our shareholders of our strategy in creating a global health IT company."
RESULTS BRIEFING
A presentation of the year end results is scheduled to be held at:
Sofitel Wentworth Hotel, Phillip Street, Sydney at 11:00am (AEST)
Presented by: Gary Cohen, Executive Chairman & CEO and
Martin Deda, Group Finance Director
A live webcast of the results presentation will be available via the following webcast link:
http://www.brr.com.au/event/49582?popup=true
A conference call facility is available:
Tel: +61 2 8113 1426 / toll free: 1800 554 798Confirmation code: 5785611
The webcast will include a copy of the presentation together with a live audio transmission and an archived version will remain accessible after the event through the same link.
A copy of the presentation will be available on IBA's web site www.ibahealth.com and the ASX www.asx.com.au on 25th August.
Contact
Gary Cohen
Executive Chairman & CEO
IBA Health Group Limited
Phone: +61 2 8251 6700
Email: gary.cohen@ibahealth.com
Media
Greg King
Group Communications & Marketing Director
IBA Health Group Limited
Phone: +61 413 621 111
Email: greg.king@ibahealth.com
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