Healthcare reform in the US has driven consolidation among healthcare providers and complicated their revenue collection. That trend helped Craneware (CRW) - whose software is used by about a quarter of US hospitals to accurately price, charge and code their services and supplies - increase its operating profit by 7 per cent last year.
Craneware’s sales of new products rose 69 per cent to $35m (£21.4m) as emboldened larger hospital groups began to spend again. Moreover, recovering market confidence drove an 84 per cent rise in the group’s order intake to a record $71m, and helped to double the average length of renewed contracts to five years. Craneware estimates that it has $113m in visible revenue over the next three years, including $76m in contracted revenue and $33m in renewal sales.
The group launched Reference Plus, a product aimed at smaller hospitals that don’t need all the features of Craneware’s flagship solutions. It also acquired Kestros, a Scottish company whose software helps healthcare providers communicate with patients before and after treating them. Craneware plans to launch a new product that incorporates that technology in 2016.
Broker N+1 Singer nudged up its EPS forecasts by 4 per cent on the back of the Kestros acquisition. It now expects adjusted pre-tax profits of $13.5m, giving EPS of 37¢ - up from $11.9m and 33.8¢.
| CRANEWARE (CRW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 520p | MARKET VALUE: | £138m | |
| TOUCH: | 510-530p | 12-MONTH HIGH: | 638p | LOW: 409p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 169¢* | NET CASH: | $32.6m | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 28.4 | 7.3 | 21.8 | 8.0 |
| 2011 | 38.1 | 8.7 | 23.1 | 8.8 |
| 2012 | 41.1 | 11.2 | 33.0 | 10.5 |
| 2013 | 41.5 | 10.6 | 30.7 | 11.5 |
| 2014 | 42.6 | 11.3 | 31.9 | 12.5 |
| % change | +3 | +6 | +4 | +9 |
Ex-div: 13 Nov Payment: 16 Dec *Includes intangible assets of $14.3m, or 54¢ a share £1=$1.62 | ||||
