New sales surge as Edinburgh software firm Craneware hails 'transformational' US deal
Craneware, the Edinburgh-headquartered software firm focused on the US healthcare market, pointed to “significant new opportunities” as it hailed the completion of its recent transformational acquisition.
Releasing a trading update ahead of its full-year results, the firm said the $400 million (£283m) takeover of US-based Sentry Data Systems – unveiled last month – provided a “positive basis for accelerated growth”.
It told investors that the positive sales momentum experienced in the first half of the year had continued into the second half, with the board now expecting to report an increase in new sales of about 40 per cent to more than $42m. The majority of the revenue resulting from both new sales and existing contract renewal will be recognised over future periods, providing the group with long-term visibility of revenue under contract.
Total revenues and adjusted underlying earnings for the year are expected to have increased by greater than 5 per cent and 6 per cent respectively. The group’s customer retention rate has remained above 90 per cent, “building the foundation for a return to double-digit organic growth in the future”.
Bosses said the firm was continuing to invest in the expansion of its cloud-based financial and operational performance platform, Trisus, with capitalisation of research and development costs maintained at broadly the same levels as in prior years. The success of this investment has seen 900 current customers migrate to products on the Trisus platform.
Announcing the acquisition of Sentry last month, Craneware chief executive Keith Neilson said the deal would provide “immediate additional scale” to its operations.
The US company, headquartered in Deerfield Beach, Florida, has a customer base of some 10,000 hospitals, pharmacies and clinics, including more than 600 US hospitals – of which only about a third overlap as existing Craneware customers.
Looking ahead, Craneware said: “The financial challenges hospitals are currently facing, combined with the ongoing transition to value-based reimbursement, means the impact and insights that Craneware’s Trisus platform delivers are increasingly relevant.
“The global pandemic has highlighted the importance of usable financial and operational data and it is expected this realisation will drive further investment by hospitals in the future.
“The group continues to see significant new opportunities entering the sales pipeline and the board is confident in the group’s ability to deliver double-digit organic growth in the future.”
Founded in 1999, Craneware is headquartered in Edinburgh with offices in Atlanta and Pittsburgh, employing more than 350 staff.
Neilson said: “We are pleased by the continued positive sale performance in the year and strong adoption of our Trisus platform, paving the way for accelerated future growth.
“The successful conclusion of the acquisition of Sentry Data Systems marks a transformational point in our journey, considerably expanding our customer base, data sets, product offering and market presence.
“Together, we will offer healthcare organisations innovative new ways to measurably impact operational and financial performance and generate sustainable margins that can be re-invested in providing better care for those who are in need.
“Our expanded opportunity and positive sales momentum provide us with considerable excitement and confidence as we work with the Sentry team to transform the business of US healthcare.”