LEASE CASE STUDY - iSoft Group Plc.
(formerly Torex Plc)

THE CLIENT
iSoft Group is one of Europe's leading suppliers of healthcare IT and provides clinical and administrative information systems, management solutions for hospitals, laboratories, GPs, community care and large corporations. At the forefront of medical and business software development, iSoft Group also provides the hardware, network infrastructure, installation and support that customers require.

THE PROJECT
In 2002 iSoft Group decided to consolidate a number of offices and move over 200 staff members to a prestigious new 70,000 sq ft building in Banbury. The premises overlook the M40 and are easily visible from the motoroway as you drive up past Junction 11.

This move enabled iSoft Group to greatly improve the services and support they could offer to their clients, partly due to its position in the heart of England's motorway network and partly due to the increased efficiency which results from brining staff together in a new and well-equipped environment.

As it was a new building they needed to totally fitout the premises with partitioning, flooring, cabling, air conditioning and furniture plus install all the technical and communications infrastructure necessary.

THE FINANCE PACKAGE
In order to protect their cashflow, iSoft Group chose to finance this major project by making use of a lease facility. Their Financial Director - Gordon Mackay - recognised that it was far more prudent to keep cash in the business than to use it to invest in depreciating assets. He wanted to use their cashflow to maximise profitability by investing in their key asset - software development.

In addition, as a profitable company he knew that leasing the furniture and fitout works would attract the best tax advantages. Their lease repayments, unlike any other form of finance, are 100% allowable against taxavle profits thus affording large savings on their tax bill. Had they used cash, or a bank facility, they would only have been able to claim capital allowances on a proportion of the fitout works and at only 25% of the value.

Adding value to the service they already offered their client, the dealer involved comments: "Great design and service isn't enough in today's market. So we looked to maximise iSoft's earning potential, which we achieved by leasing instead of tying up cash that brings much higher returns when iSoft re-invest through R&D."

We put together a lease package to finance all the furniture and most of the fitout works inclusing partitioning, CCTV system, Fire Alarm System, Air conditioning, access control system and carpeting. The toal lease value was just under £1.3m.