Craneware confirms strong growth as hospital contracts keep coming

Tuesday, Jul 19 2011 by
Craneware confirms strong growth as hospital contracts keep coming

Craneware (LON:CRW), the AIM listed group that sells software to US healthcare institutions that helps them improve their financial performance, said this morning that revenues in the 12 months to June had increased by 34% to $38 million. Adjusted profit before exceptional items is expected to show year-on-year growth of approximately 30% to around $9.9 million. Craneware said its three-year earnings visibility had also increased substantially - rising from $83 million last year to $105 million from June 2011.

The figures were enhanced by a strong performance in the second half of the year, which Craneware credited to two substantial sales to multi-hospital groups. Shriners Hospitals for Children, a 20 hospital group based in Florida, with hospitals nationally, signed a five year contract for three of Craneware’s products; Chargemaster Toolkit, Pharmacy ChargeLink and Supplies ChargeLink. Meanwhile, a 10 hospital group also headquartered in Florida, signed a three year contract for Craneware’s corporate version of Chargemaster Toolkit. Due to the company’s annuity software-as-a-service revenue recognition policy the majority of the revenue from these contracts will be recognised in future years.

Keith Neilson, the chief executive of Craneware, said: “We are delighted to have closed the year in such a positive manner, securing strong competitive wins with two large multi-hospital groups. With the first fines from the US government’s Recovery Audit Contractor programme now starting to come into effect, the drivers for our business continue to grow and we look to the future with confidence.”

In 2010, Craneware reported a 23% increase in revenues to $28.4 million and a pre-tax profit rise of 24% to $7.3 million. That was enough to catapult its share price from 383p to 594p within two months. In June the price peaked at 607p but has slipped in recent weeks and was unmoved today at 566p. Evolution Securities, the broker, described the tone of today’s update as “positive” and said that, rolling into the new fiscal period, the rating of the stock had fallen significantly to 25x 6/12E earnings, falling to 19x the year after. It retained a buy rating on the shares.

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Craneware plc is a United Kingdom-based company, which is engaged in the development, licensing and ongoing support of computer software for the United States healthcare industry. The Company's Value Cycle Solutions span over five product families, which include Patient Engagement, Charge Capture & Pricing, Coding Integrity, Cost Analytics, and Revenue Collection & Retention. Its Patient Engagement solutions include InSight Medical Necessity, Trisus Patient Payment and Patient Charge Estimator. The Charge Capture & Pricing solutions include Chargemaster Toolkit Discovery Viewer; Physician Revenue Toolkit, Physician Management Toolkit and Physician Revenue Toolkit-Corporate; Pricing Analyzer; Reference Plus; Pharmacy ChargeLink; Supplies ChargeLink, and Supporting Modules. Its Coding Integrity solutions include Trisus Claims Informatics and Bill Analyzer. Its Revenue Recovery & Retention solutions include InSight Audit and InSight Denials. It also offers professional services. more »

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