Craneware, the Edinburgh-based software specialist focused on the US healthcare market, has unveiled a further “significant” contract win and flagged a record annual sales performance.
Releasing a trading update ahead of its full-year results, the firm said it had signed a contract with a large hospital network in the eastern US. From this October, the Scottish company’s technology will be rolled out to 12 facilities under the new agreement.
Craneware said the contract was expected to deliver “in excess of” $6 million (£4.5m) of revenue over its initial five-year term.
In its update, covering the year to the end of June, the group pointed to a “continued outstanding performance” as it pushes ahead with its growth strategy.
It highlighted strong underlying new sales growth of about 100 per cent, including the latest contract, signed at the end of the period under review.
Craneware added: “Renewals by dollar value have continued at over 100 per cent in the period. In accordance with the company’s revenue recognition policy, the majority of the revenue resulting from both new and renewal sales successes will be recognised over future periods, adding significantly to the acceleration of the group’s long-term visibility of revenue under contract.”
In addition to the record sales performance, the firm expects to report increases of about 16 per cent in overall revenue and 20 per cent in adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) – or underlying earnings – for the year to 30 June, extending the run of organic double-digit growth.
Having returned $15m to shareholders and invested a further $4m in its employee benefit trust during the year, the group’s cash conversion has resulted in the cash balances returning to similar levels to those seen at the end of the previous financial year – $53m.
Chief executive Keith Neilson told investors: “These record results demonstrate the ongoing momentum we are seeing across all strata of hospitals including large and complex health systems as they embrace the realities of value-based economics within healthcare.
“The strength of our solutions and the value they deliver to our customers, allows us to support our customers as they address the challenges resulting from the continued evolution of the US Healthcare market.
“We are playing an increasingly strategic role in assisting healthcare providers to deliver better healthcare through sustainable financial performance, whilst mitigating operational and compliance risks.
“These factors combined with our financial strength and high levels of visible revenue for future years, gives management confidence in its continuing ability to deliver increasing stakeholder value year on year whilst investing in our future,” he added.
Founded in 1999, Craneware is headquartered in the Scottish capital, with offices in Atlanta and Pittsburgh, employing more than 300 staff in total.
The company, which reports in US dollars as a result of its focus on the US healthcare sector, is due to announce its full-year results on 4 September.