ISoft, the healthcare IT group, revealed a slide into the red yesterday after suffering contract delays and undergoing a group restructuring.

ISoft, a key provider to the NHS’s £6.2 billion IT modernisation programme, slumped to a pre-tax loss of £14.3 million in the six months to October 31. The figure compares with an £8 million profit for the same period of 2005.

Turnover fell from £97.2 million to £85.9 million as the company reiterated that it had been “challenging” to sign new contracts because of adverse publicity surrounding the group.

Despite the losses, City analysts said that results had been better than expected. The shares closed up 6½p at 47¼p.

ISoft has suffered from delays to the health service’s systems overhaul. A profits warning in January was followed by further warnings, as the group changed the way in which it counted revenues.

The Financial Services Authority is conducting a formal investigation into the company’s former accounting practises.

ISoft racked up exceptional charges of £11.6 million in the first half of the year, including £3.6 million in redundancy and reorganisation costs and £4 million in legal and advisory fees relating to new funding arrangements, strategic discussions and the FSA inquiry.

John Weston, chairman and acting chief executive, predicted “a steep recovery next year and the year after”. Talks with possible buyers or alliance partners were continuing “satisfactorily”.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax