Certainly the Leeds-based NHS IT systems supplier has announced nothing of real note since updating the market on its start of year trading alongside its AGM. That was back on 26 April and was really rather positive.
'EMIS’s 2015 results were impacted by a number of expected Secondary Care contracts not being completed before the close of the year. It is therefore pleasing to see the company announcing this morning that it has secured a number of mid to smaller sized Secondary Care software and services deals which, along with the planned costs reductions, will start to contribute to results in the second half.'
That was the reaction to the update from Lee Prout, analyst at IT analysis consultancy Megabyte. Over the next few weeks the shares rallied around 11%.
Yet since the end of May the shares have crashed 17% to the current 881p.
What's happened is a huge reaction by investors to a pretty hefty and surprise profits warning from NHS IT supplier peer Servelec (SERV:AIM) on 15 June. That was largely down to slowing IT refresh spending in the north of England as NHS Trusts feel the budgetary pinch.
'EMIS’s shares also fell on the day (15 June), even though the bulk of its business is in the Primary Care market (GPs) where Government spending seems less discretionary and budgets more ring-fenced,' argue analysts at CanaccordGenuity.
'Whilst EMIS is to some extent insulated given its incumbent Primary Care position, growth looks likely to be harder to come by in Community and Secondary Care,' reasons N+1 Singer analyst Chris Glasper. 'We therefore put through precautionary EPS downgrades of 3% this year and 6% next, putting us at the bottom end of consensus.'
CanaccordGenuity thinks differently. 'We checked in with management who confirmed that only its CCMH (Community, Children’s & Mental Health) business could suffer any impact from a slowdown in Government spending on the north refresh and this accounted for just 4% of revenues in 2015,' the broker;s analysts argue.
'Furthermore, the CCMH business is not solely focussed on the north of England where Government spending delays have become apparent. Therefore, it is probably more accurate to say that EMIS’s exposure to Servelec’s specific problem is closer to one or 2%.
Over to you investors.