US medical professionals are beginning to accept that the value citizens get from their healthcare spending is often poor, and have thus decided to improve their efficacy. Specialist software group Craneware (CRW) has felt the benefits. The company has signed four major contracts in the past two months, which means $63m (£45m) of revenue has already been booked for the financial year to June 2018. That's 94 per cent of broker Investec’s full-year revenue forecasts and nearly a tenth higher than the total annual revenues obtained in the whole of the 2017 financial year.
Even better, revenue visibility for the three years to 2020 has risen 20 per cent to $179m – $146m of which is set to come from existing contracts. Management is also confident the group will retain the $33m of revenue up for renewal within the next three years. Craneware’s renewal rates are well above 100 per cent in dollar value (as the group regularly expands its existing contracts), while customer churn is in the low single digits.
With adjusted cash profit margins of 31 per cent, Investec is equally confident of strong profit growth in the 2018 financial year. The broker has forecast pre-tax profits and EPS of £20.1m and 56.7p, respectively, from £17.5m and 50.3p in 2017.
| CRANEWARE (CRW) | ||||
| ORD PRICE: | 1,955p | MARKET VALUE: | £514m | |
| TOUCH: | 1930-1980p | 12-MONTH HIGH / LOW: | 2,020p | 1,177p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 50 | |
| NET ASSET VALUE: | 240ȼ* | NET CASH: | $52m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2016 | 26.8 | 7.5 | 20.9 | 8.7 |
| 2017 | 31.1 | 8.7 | 24.8 | 10.0 |
| % change | +16 | +15 | +19 | +15 |
| Ex-div: | 29 Mar | |||
| Payment: | 20 Apr | |||
| *Includes intangible assets of $21.5m, or 82ȼ a share £1=$1.39 | ||||
