Craneware hikes dividend after healthy rise in profit

Edinburgh-based software developer Craneware today announced a 19 per cent increase in its half-year dividend after posting a rise in earnings.

Craneware chief executive Keith Neilson. Picture: Neil Hanna

The firm, which specialises in billing software for the US healthcare market, said shareholders are in line for an interim payout of 7.5p on 1 April, up from 6.3p a year ago.

The hike came as Aim-quoted Craneware – which employs about 100 people at its Edinburgh headquarters – said pre-tax profits for the six months to the end of December rose 15 per cent to $6.1 million (£4.3m), on revenues 7 per cent higher at $23.1m.

Since the end of the first half, the company landed a contract, expected to deliver $7.5m of revenues over an initial five-year term, with a new customer that manages more than 50 hospitals across the US.

Chief executive and co-founder Keith Neilson said: “The strong sales performance in the first half of the year, and our high levels of recurring revenues coupled with a record sales pipeline, provide us with confidence for the second half of the year and beyond.”

He added: “We always tend to be a bit higher in the second half; there’s no particular reason for that but we usually see half-on-half growth.”

In January, Craneware secured a $50m funding facility with Bank of Scotland that it said gave it the “firepower” to pursue more strategic acquisitions, having bought Ullapool software outfit Kestros – since rebranded as Craneware Health – in 2014.

Neilson told The Scotsman: “We’ve looked at a lot of deals and walked away from some things. We’re very mindful of shareholders’ money and giving them a good return from what we spend on, but we’ve been aggressively pursuing a partnership strategy as well.”

The firm recently signed a reseller agreement with US-based automated payment services company VestaCare. The tie-up will see the two combine their technologies to offer “accelerated payment and patient engagement solutions”, with Craneware receiving an annual licence fee from customers and an additional revenue share agreement.

With both a US presidential election and a referendum on the UK’s membership of the European Union looming this year, Neilson said the company was “pretty agnostic” on both votes.

He added: “There are some long-term ramifications if we come out of Europe with regards to sterling and the dollar – a stronger dollar is a very positive thing for us. Equally, regardless of which candidate is successful in the US, they’re all looking for value out of healthcare so we see that continuing to be a major part of the US – and world – economy for the foreseeable future.”

Following today’s results, analysts at N+1 Singer upgraded Craneware’s shares from a “hold” to “buy” rating and said the firm was “moving in the right direction”.