HOSPITAL billing software specialist Craneware yesterday posted a rise in half-year profits, sparking talk among analysts of the Edinburgh-based firm becoming a takeover target.
Singer analyst Chris Glasper told The Scotsman that the Aim-quoted technology outfit would be a “manageable acquisition” for a number of the larger US software companies looking to break into its market. He added: “Craneware is in a pretty strong position, with its software in 25 per cent of American hospitals.”
Craneware chief executive Keith Neilson declined to comment on whether his firm would become a takeover target but instead revealed he was continuing to look at a number of potential bolt-on acquisitions.
Glasper agreed that the Scottish firm could take part in mergers and acquisitions (M&A) as the buyer, noting the company had the financial firepower to do bolt-on acquisitions, without ruling out a larger deal.
Suggestions of M&A activity involving Craneware came as the company posted a 7 per cent rise in revenues for the six months to 31 December to $20.1 million (£13.3m).
Pre-tax profits rose to $4.5m from $3.8m, allowing the firm – which sells its products in the US and so reports in dollars – to raise its interim dividend to 5.2p from 4.8p, making it one of the few stocks on Aim to give a payout to investors.
Numis Securities analyst David Toms suggested Craneware would need to have a busy end to the year if it was to hit full-year targets, but Neilson said his firm was working to win contracts away from competitors as they came up for renewal.