Craneware's (CRW) newer Pharmacy ChargeLink solution is clearly popular with hospitals in the US. In the year to June 2018, it overtook the group's older revenue management system Chargemaster to become its best-selling product. This helped double 'new' sales to $71.3m (£55.6m), defined as new contracts with existing or new customers. Thus, Craneware was rewarded with a double-digit share price rise on results day.
This strong sales momentum is also important in the context of giving management better visibility over future revenues. Contracts are typically five years in length, but chief executive Keith Neilson estimates the group will receive around $190m in revenue over the next three years. In his view, this number is “pretty accurate” given the tendency for strong customer retention rates. Last year, renewal rates stayed north of 100 per cent thanks to the launch of several new products and services. Investment in research and development (R&D) is set to continue, too, with Mr Neilson estimating that roughly a third of the group’s cost base will go towards this.
Analysts at Investec expect pre-tax profits of $23.5m for the year ending June 2019, giving EPS of 67.4¢, compared with $19.9m and 59.1¢ in 2018.
| CRANEWARE (CRW) | ||||
| ORD PRICE: | 2,340p | MARKET VALUE: | £625m | |
| TOUCH: | 2,330-2,350p | 12-MONTH HIGH: | 2,430p | LOW: 1,280p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 51 | |
| NET ASSET VALUE: | 193¢* | NET CASH: | $52.8m | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 42.6 | 11.3 | 31.9 | 12.5 |
| 2015 | 44.8 | 12.5 | 35.0 | 14.0 |
| 2016 | 49.8 | 13.9 | 39.4 | 16.5 |
| 2017 | 57.8 | 16.9 | 50.2 | 20.0 |
| 2018 | 67.1 | 18.9 | 59.0 | 24.0 |
| % change | +16 | +12 | +18 | +20 |
| Ex-div: | 8 Nov | |||
| Payment: | 6 Dec | |||
| *Includes intangible assets of $23.3m, or 87¢ a share £1=$1.28 | ||||
