Reaction: Healthcare-focused Craneware given positive sales prognosis after FY leap
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The London-listed firm, which provides billing and healthcare analytics software to US hospitals, has revealed how revenues in the 12 months ending June 30 increased by 119 per cent from the previous year to $165.5 million (£145m), in line with a trading update for the year released in July.
Annual recurring revenue was up by 164 per cent to $170.3m, 80 per cent of which is now from the cloud, and adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) jumped 91 per cent to $51.8m, with the combined group adjusted ebitda margin target of 30 per cent reported as having been achieved ahead of schedule.
Basic adjusted earnings per share grew 29 per cent to 89 cents, with Craneware outlining a proposed final dividend of 15.5p per share (18.80 cents), the same as a year previously, and giving a total dividend for the year of 28p per share, up 2 per cent.
Statutory pre-tax profit was broadly flat at $13.1m, on the back of costs related to the group’s £280m takeover of Florida-based Sentry Data Systems that was announced in the summer of 2021.
As for whether the company has more deals in its sights, it said it is keeping an eye out for opportunities, but doubted that any acquisitions in the short term would be of a similar scale to Sentry.
Chief executive Keith Neilson said: “We are pleased to be reporting such positive results, which clearly demonstrate the increased scale of the enlarged Craneware Group and the breadth of our future opportunity. The addition of Sentry, which was completed and integrated during the fiscal year, represents a significant milestone for Craneware.
“Whilst we remain cognisant of the ongoing challenges faced by our customers and partners, we are proud of the manner in which the group has dealt with the challenging backdrop during the year.
"Now, with our expanded and reorganised team we are confident we will be able to serve the considerable market need within the US healthcare space through the next stage of our evolution.
“We anticipate accelerated levels of sales moving forward, delivering our next phase of growth. We have a robust balance sheet, high recurring revenues and with our high levels of customer retention, we look to further increase shareholder value.”
Analysts Damindu Jayaweera and James Lockyer at house broker Peel Hunt noted their “buy” rating, adding: “While the results across revenue and cash generation are in line with the trading update, they do act as a reminder of how much of a transformation Craneware has undergone in the year. Despite good and improving execution, we think the market is not valuing the company appropriately.”
Also recommending Craneware as a “buy” were Berenberg analysts, deeming it “a rare UK asset that we think is an excellent inflationary play”. They added: “Our recent visit to Craneware’s offices gave us a unique insight into how complex a problem [it] is solving for its customers and the future benefit its software can bring in delivering value-based healthcare in the US… we expect at least low double-digit revenue growth for the group over the coming years.”