Emisphere (OTC:EMIS) reported a solid H117 despite pressure on revenues and profitability in several business areas. With management expectations maintained, our adjusted operating profit forecasts are substantially unchanged. Over the medium term, we expect the new CEO to make investment/divestment decisions to ensure the group is able to maintain growth and profitability despite the challenging NHS funding backdrop.
Adjusting the cost base to reflect market pressures
EMIS generated flat H117 revenues year-on-year on an organic basis and a small decline in adjusted operating profit. Cost reductions arising from the reorganisation programme partially offset the additional investment made in the Patient business. Budgetary pressures within the NHS continued to hold back revenues in the Acute business and depressed growth in Primary Care. Market share improved in Primary and Community Care and is set to increase in Community Pharmacy.
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