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Stock down 23.5%

Craneware is ‘confident’ as it notes share price slump

Keith NeilsonCraneware, the Edinburgh-based billing software company for the US healthcare market, today said it had noted the recent movement in its share price which is down by 23.5% over the past month.

Analysts say investors may be trying to gauge the current business cycle phase and how that could potentially impact the portfolio.

Craneware’s shares have fallen in a market touching bear market conditions. Over the past year, shares in the company are up 46.8%.

The only insider purchase over the last 12 months was co-founder and chief executive Keith Neilson (pictured) who spent £149,000 at £30.85 per share. Craneware insiders own 25% of the company, worth about £234m.

Shares in the AIM-quoted company closed last night at £21.50.

In a trading update this morning, the group said it is continuing to perform strongly in the first half of the financial year, with good levels of sales activity and customer renewals by dollar value continuing at their historic average of 100%. It continues to seek out acquisition opportunities backed by a $50m facility from Bank of Scotland.

The majority of revenue from new and existing contract renewal sales successes will be recognised over future periods, adding to the group’s long term visibility of revenue under contract. 

The group expects to report increases in both revenue and adjusted EBITDA in the range of 15% to 20% for the six month period ending 31 December 2018, continuing the double digit growth delivered in prior years.

It maintains healthy cash reserves and having seen the normal seasonal pattern in collections and outflows, expects operating cash conversion for the 12 months to be over 100%. 

“With the record sales performance in the previous period, continued sales momentum and high levels of revenue visibility, the board remains confident in meeting market expectations for the full year ending 30 June 2019,” it said.

The company will announce results for the six months ended 31 December on 5 March.

Mr Neilson said: “As we close the first half of our financial year, we look to the future with high levels of confidence.  The strength of our trading performance to date and double-digit rate of growth demonstrate the ongoing momentum we are experiencing in the business. 

“The depth of our solutions and the value they deliver to all strata of customers, including large and complex health systems, allows us to support our customers as they address the challenges resulting from the continued evolution of the US Healthcare market and the Affordable Care Act.

“We are playing an increasingly strategic role in assisting healthcare providers as they look to improve and sustain their financial performance, whilst mitigating operational and compliance risks. 

“Our financial strength and high levels of revenue visibility for future years combine to give management confidence in its ongoing ability to deliver increasing stakeholder value this year and in the future.”

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