Shares in beleaguered NHS software company iSoft shot up 16 per cent yesterday, despite half-year losses of more than #14 million.
Manchester-based iSoft, which closed its Birmingham office more than a year ago, also warned it may not be able to continue after failing to secure long-term funding.
The group, rocked by delays in the programme to provide a centralised database of medical records, fell into the red after revenues dropped 11.6 per cent to #85.9 million and it took a one-off hit of #11.6 million to cover restructuring.
But it pointed out its position had stabilised after an agreement with supplier CSC, while lower overheads contributed to an improvement in underlying financial performance. The key supplier to the much-delayed overhaul of the NHS IT system admitted the failure to find a new backer called into question its survival.
"The directors recognise there are material uncertainties that may cast significant doubt on the group's ability to continue as a going concern," the company said.
iSoft secured short-term banking arrangements in August, but the facilities are due to expire in November and will generate progressively higher levels of interest until then.
Its creditors insisted on a steep rise in payments in the New Year unless iSoft secures fresh investment or makes disposals.
Charles Brennan at ABN Amro reckons with iSoft's debts and overdraft at around #160 million, the group will struggle.
"We can see little way this debt can be serviced from a business just breaking-even at operating level," he said in a research note.
However, iSoft's chairman and acting chief executive, John Weston, said: "We have still to put long-term financing in place, but iSoft is today in considerably better shape than a few months ago."
He added discussions with parties interested in acquiring the company or taking a strategic alliance were continuing.
Isoft shares rose 16 per cent as analysts said faster-than-expected cuts helped operating profits ome in higher than forecast, and they closed up 6p at 46.75p.