Strong pipeline

Craneware ‘well-positioned’ for US health upturn

Keith Neilson
Keith Neilson: robust results

Craneware, the Edinburgh-based software firm, said it is well positioned for the next year and beyond as its key US market shows signs of an upturn.

It reported a strong balance sheet, high levels of recurring revenue and early signs of increasing customer confidence.

Adjusted EBITDA for the year to the end of June rose 6% to $54.9m, $111.6m) on a 5% increase in revenue to $174m.

CEO Keith Neilson commented: “This robust set of results is testament to the resilience of the group through what was a prolonged period of disruption across the US healthcare landscape.

“We are pleased to have seen the strong sales momentum seen at the close of the year carry through into the start of the new financial year, resulting in a growing sales pipeline.”

The company, which does almost all of its business in the US, proposes a final dividend of 16p per share (FY22: 15.5p) giving a total dividend for the year of 28.5p per share (FY22: 28.0p) up 2%.

Speaking to Daily Business from his head office in Canon Mills, Mr Neilson admitted it had been “a tough time for our customers” as the pandemic was only declared over in the US in May.

“Hospitals have been under the cosh but it feels like things are getting better,” he said, taking encouragement from a McKinsey report on forecasts for growth across the hospitals and pharmacies sector.

“A number of things we have been working on over the last few years are coming to fruition,” said Mr Neilson. He said there was the potential for “significant growth” and “we think we can consolidate some of the gains this year.”

He said it would be possible to “layer on an acquisition” but said this was not the time as as there is a discount between valuations and the ability to raise cash.

The outlook in the US was encouraging, he said, because the slowing number of jobs being created showed it was not overheating and there was now talk that interest rates were at their peak with inflation likely to fall to 2.5%.

“We have paid down significantly more debt than we expected,” he said, noting that interest payments had doubled and cost the firm an additional £3m this year.

Hiring had become “easier” in Edinburgh as more candidates, including software engineers, had become available as competition for staff had slackened. The company employs about 750 staff, of which 250 are in Edinburgh.

Craneware’s shares rose 8.3% to 1449p.

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