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Craneware on target for faster growth in US

Keith Neilson

Keith Neilson: ‘considerable excitement’

Health sector billing company Craneware remains on target for a return to double digit organic growth after delivering results ahead of expectations.

The Edinburgh-based company, whose business is entirely in the US healthcare market, posted an 8% rise in EBITDA to $27.1m (FY20: $25.2m) in the year to the end of June.

Revenue came in 6% higher at $75.6m (FY20: $71.5m). This followed the acquisition earlier this year of US firm Sentry Data Systems.

Profit before tax fell to $13.2m (FY20: $19.3m) reflecting exceptional costs associated with funding the $400m (£282m) cash and shares acquisition in early June.

The company is proposing a final dividend increase to 15.5p per share (FY20: 15p) giving a total dividend for the year of 27.5p per share (FY20: 26.5p) up 4%.

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“We have enjoyed early sales momentum across the now enlarged group and with our expanded opportunity we look to the future with considerable excitement and confidence as we work with the Sentry team to transform the business of US healthcare,” said Mr Neilson in a statement with the figures.

Speaking to Daily Business afterwards, he said the company was ahead of revenue targets and cost synergies from the acquisition and added that there could be more deals to come.

“It is certainly a possibility,” he said. “It does make a whole host of targets possible”, cautioning that the results reflected a “positive organic story”.

He said the newly-expanded company “could really make a difference in the US healthcare market”.

Technology analyst Roger Phillips of Investec said: “Revenue and EBITDA are marginally ahead of expectations set at the update stage.

“The updated three-year visible revenue metric suggests revenue forecasts are conservative, while integration is running ahead of plan, suggesting $10m incremental cost synergies look comfortable.

“Taken together, these could lead to material upside to mid-term consensus. We are strong Buyers and retain our target price (3250p).

Despite the positive outlook the shares closed down 60p (2.6%) at 2340p.

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