Shares in Craneware (CRW) plunged by a third on the news that the timing and quantity of sales closed in the second half of the year to June 2019 have been lower than expected. The group – which provides software to help US healthcare organisations price, charge, code and retain earned revenues – said that it had continued to sign new contracts with hospitals, but that the shortfall occurred as the market processed the launches of three new products on its cloud-based ‘Trisus’ platform. House broker Peel Hunt notes, somewhat counter-intuitively, that a sales push in specific areas can lead to a sales hiatus.
Now, Craneware reckons full-year revenues will grow by around 6 per cent, with adjusted cash profits up by a tenth – standing in stark contrast to Peel Hunt’s previous estimates of 18.2 per cent and 18.5 per cent respectively. Analysts here have reduced their 2019 adjusted EPS forecast by 9 per cent to 62¢ (49p). For both FY2020 and FY2021, they have lowered their revenue growth projections from 20 per cent to 8 per cent, driving further earnings downgrades.
Craneware also said that – as mentioned within its interim results – capitalised research and development expenditure has risen; this year, it will land at around $9m, up from $4.7m in FY2018. The group added that it has endured one-off exceptional costs of around $1.5m, stemming from professional fees tied to a significant acquisition opportunity that wasn’t ultimately pursued.
