The Australian firm bidding for NHS software supplier iSoft has been forced to defend itself against claims that its current revenues are only equal to investment levels.

IBA Health figures show overall annual sales up 26 per cent to $74.7m (£30.7m) and profits up 50 per cent to $22.9m (£9.4m) - growth driven by a Malaysian joint venture which secured new contracts with the Ministries of Health and Defence.

But analysts are concerned that the firm has only generated in revenues the same amount as was invested. IBA initially put in $25m (£10.3m) and ultimately bought out its joint venture partner for $26.5m (£10.9m) for a total investment of $51.5m (£21m).

The firm's Malaysian revenues have topped just $53m (£21.8m) over the past two years, though IBA expects it to reach $11m (£4.5m) in the next two years.

Meanwhile, revenues in Australia and New Zealand are down $13m (£5.3m) and the company is only just beginning to enter new markets like China and India.

But IBA said it is delighted with the results.

‘It reflects continuing success of our acquisition strategy and our ability to unlock the value of these acquisitions to generate organic growth,’ said IBA executive chairman Gary Cohen.

‘IBA is now established in five Asian countries as well as in the Middle East, Africa, Australia and New Zealand and are well positioned to capitalise on opportunities as these countries upgrade its health infrastructure.’

The firm is currently locked in a bidding war with German rival CompuGroup for control of iSoft, one of the main software providers to the National Programme for NHS IT (NPfIT).

IBA recently made an improved £166.3m bid, trumping CompuGroup’s £160m offer. IBA says it is in a good position because it now owns just under 26 per cent of iSoft’s shares and CompuGroup requires 75 per cent shareholder approval to succeed in its bid.

CompuGroup’s bid includes plans to sell on the development of the Lorenzo software critical to NPfIT to Computer Sciences Corporation (CSC), which is delivering 60 per cent of the overall NHS programme.

IBA says Lorenzo is a key element of the business and it will not support the sale of the software or its intellectual property.