EMIS

BUY

17/01/2012 Ben Jaglom

GP software supplier EMIS (EMIS) has issued a trading update in which it reports that recurring revenues are now a chunky 80%.

The AIM 50 constituent noted in its update for the year to December that another 207 GP practices went live using its EMIS Web system in the second half of the year. At the year-end, 360 GP practices and 147 primary care organisations were said to be using the EMIS Web technology.

EMIS added that 53.1% of all GP practices use its software, while its pharmacy provider, RX Systems, holds a 34.4% market share of high street pharmacies. Net cash stood at £7.8m as of 31 December.

Chief executive officer Sean Riddell enthused that the group is making 'significant progress towards delivery of the strategic vision of cross-organisational healthcare systems'.

Analysts at house broker Numis are forecasting pre-tax profits of £20.9m (EPS: 25.5p) on sales of £72.6m. In 2012, profits of £22.3m (EPS: 27.4p) on revenues of £80.9m are expected. A dividend of 12.4p and 13.4p is pencilled in for 2011 and 2012 respectively.

Recommended by Growth Company Investor last October at 526.25p, shares in EMIS currently trade at 480p. The latest update from EMIS shows that trading is in line with expectations, with some progress in the national expansion of its EMIS Web software. With little to change our existing rating on the company, we retain our buy rating for now.