Craneware books strong first half led by 30% growth in ‘new sales’

Value Cycle software solutions for the US healthcare market Craneware (LON:CRW) saw its earnings jump during the first half of 2020, led by a 30% year-on-year rise in ‘new sales’.

Despite the fact that its revenues were almost flat at $35.9 million, its adjusted EBITDA bounced 10% on-year, to $12.7 million, and its PBT rose 3% to $9.6 million.

Likewise, Craneware shareholders enjoyed similar progress during H1 2020. Its adjusted basic EPS increased 3% to 31.1 cents per share, while its interim dividend grew by an impressive 5% year-on-year, up to 11.5p per share.

The company added that operationally, its new cloud Trisus solutions accounted for 10% of new sales. It also said that it saw an increase in the total value of renewals and that it enjoyed, “strong sales activity and opportunities across all classes of hospital providers”. It finished, saying its investment in research and development had risen from $9.1 million to $10.3 million on-year for the first half.

Craneware reaction

Responding to the company’s performance, company CEO Keith Neilson commented:

“We are pleased to report on a positive sales performance in the first half of the financial year, with new sales over 30% ahead of the first half in the prior year, reflecting the considerable amount of activity that has taken place across the business since the summer. Whilst this increase will take time to flow through into our reported financials, we are confident that momentum is now back in the business and the size of the opportunity ahead of us remains intact.”

“Importantly, the level of Trisus sales grew in the half, with sales of all four of our current Trisus solutions and the pipeline for these products increasing. The transition of our existing product suite onto the Trisus platform is progressing and paves the way for long-term growth, as we provide our customers with the data-driven solutions they require to address the move to value-based care.”

“The positive sales performance in the first half has continued to date, and our pipeline continues to grow, underpinned by the o ngoing transition of the US healthcare market to value-based care. The Board’s expectations for the full year remain unchanged and we look forward to a return to increased rates of growth in future years. We are focused on execution and with strong operating margins, healthy cash balances and a growing sales pipeline, we continue to be excited by the opportunity ahead.” 

Investor notes

Despite seemingly positive results, the company’s shares dropped 3.14% or 61.00p, to 1,879.00p per share 03/03/20 15:18 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Craneware stock. The Group’s p/e ratio is 39.12, their dividend yield is modest at 1.39%.

 

 

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Jamie Gordon
Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.