Software firm aborted acquisition

Craneware CEO says board ‘didn’t think through’ sales plan

Keith Neilson

Keith Neilson: strong platform

Health care billing firm Craneware says it is back on track after growth slipped and caused its shares to plummet by a third.

The Edinburgh-based company reported adjusted EBITDA up 11% over the year to the end of June and profit before tax fell from $18.9m to $18.3m as a result of $1.2m one-off costs related to a significant proposed acquisition that the board decided not to enter into during the year.

Speaking to Daily Business, chief executive Keith Neilson admitted the company had managed to “shoot ourselves in the foot” after slipping up on the processing of new contracts. The shares fell 34% after it declared in June that sales growth would be slower.

“We ran into some sales congestion, we didn’t think it through enough,” he said.

The company remained cash generative and was back on course. “We have to learn the lessons of the last few months, but there is a huge opportunity in front of us which we are more than capable of executing.”

On the proposed acquisition he said it involved a US company with a private equity owner. A deal would have made a significant impact, but the vendor chose to put the sale out to auction. Craneware pulled out after further diligence revealed it was not as robust as first assessed. The company was not sold.

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