Healthcare reforms in the US helped drive demand for Craneware's efficiency-boosting software, and chief executive Keith Neilson said his company's new business pipeline "has never been so strong."
The group already has $88m of revenues for future years contracted, including 93 per cent of this year's forecast sales. In absolute terms, that's a lower level than the previous six months, but Mr Neilson explained that the introduction of so-called "Evergreen" contracts - where one-year contracts are automatically renewed unless the group are instructed otherwise - had knocked around $4m from the total. However, the theory that this will allow sales staff to focus instead on winning new business is being borne out - a third more new contracts were signed, and Mr Neilson believes new channel partners and the large system sales expected this year will see the order book moving up again.
The group's acquisition of US rival ClaimTrust earlier this month also looks promising, lifting Craneware's client base by another 275 hospitals to 1,500 and adding complementary new products in audit and recovery.
Broker Peel Hunt expects underlying pre-tax profits of $9.6m and EPS of 25.3¢ in 2011 (from $7.4m and 19.6¢ in 2010).
CRANEWARE (CRW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 590p | MARKET VALUE: | £149m | |
| TOUCH: | 580-590p | 12-MONTH HIGH: | 610p | LOW:363p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 61p | NET CASH: | $31.2m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 13.3 | 3.30 | 9.20 | 4.7 |
| 2010 | 16.6 | 4.33 | 12.6 | 4.0 |
| % change | +25 | +31 | +37 | -15 |
Ex-div:23 Mar Payment:21 Apr £1=$1.62 | ||||
