NHS computer firm announces £382m loss

The firm at the heart of the troubled NHS computer upgrade posted net losses of £382.2 million today as it counted the cost of a "turbulent" year.

Manchester-based iSoft, which said yesterday it was the subject of an accounting investigation by the financial services watchdog, racked up the figure after writing down the value of a major acquisition it made in 2004.

A change in accounting policies has also meant £174million of revenues booked since 2003 will now be realised in future years.

The company was able to publish the results today - the deadline for their release - after banks extended current lending facilities into next year.

Stripping out the impact of the acquisition-related write-down, iSoft said it made profits of £13.3million for the year to April 30.

The results contained a warning that independent auditors have been unable to give an opinion as to whether the statements give a "true and fair" view in respect of the accounts for the year.

The group called in the Financial Services Authority after its own investigations found evidence of irregularities affecting the financial years ending April 2004 and 2005.

iSoft also said earlier this month that it had suspended Steve Graham, who was commercial director at the time, pending the outcome of a formal investigation.

One other employee was put on special leave of absence, while other employees who appear to be involved have already left the group.

The company, which has a key role in the much-delayed project to overhaul NHS patient records, dealt a blow to investors earlier this year when it said it had revised its accounting policies to recognise revenues over the life of the project, rather than at the beginning of the contract.

Shares in the company jumped 54 per cent to 65.5p today, as investors welcomed the breathing space offered by the extended banking arrangements. The stock had been trading at 461p a year ago.