The US healthcare market is in flux and this is providing both opportunity and risk for hospital software specialist, Craneware (CRW). On the plus side, financial and political pressure on US hospitals means that maintaining accurate fiscal records is more important than ever. Craneware's software plays a key role here as it enables hospitals to charge patients accurately and keeps track of revenues. "We make sure the hospital bills for everything it is entitled to bill for," says chief executive Keith Neilson.
But another big issue in the US healthcare market is consolidation and that's proving less favourable for Craneware. The company's larger customers are in the midst of corporate activity and negotiations on new software have become more complicated. The company warned in June that it would be unlikely to sign a large deal before the financial year-end and, indeed, this financial year was the first since Craneware's 2007 flotation that it didn't secure one or two larger deals. This held back the company's financial performance somewhat, although adjusted cash profit still grew 4 per cent to $12.4m (£7.9m). Craneware is changing its approach to try to secure larger deals, but management gave no indication of when it expects to win one.
Broker Peel Hunt expects flat adjusted EPS of 33.3¢ (from 32.8¢ in 2013).
CRANEWARE (CRW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 409p | MARKET VALUE: | £110m | |
| TOUCH: | 400-417p | 12-MONTH HIGH: | 485p | LOW: 328p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 153¢* | NET CASH: | $30.3m | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 23.0 | 5.87 | 17.7 | 4.7 |
| 2010 | 28.4 | 7.26 | 21.8 | 8.0 |
| 2011 | 38.1 | 8.65 | 23.1 | 8.8 |
| 2012 | 41.1 | 11.2 | 33.0 | 10.5 |
| 2013 | 41.5 | 10.6 | 30.7 | 11.5 |
| % change | +1 | -5 | -7 | +10 |
Ex-div: 13 Nov Payment: 13 Dec Includes intangible assets of $15.3m, or 57¢ a share £1=$1.57 | ||||
