Craneware says sales ‘healthy’ after profits dip

SOFTWARE house Craneware is back on the acquisition trial in the United States and has unveiled plans to increase its headcount by a quarter at its Edinburgh head office.

Craneware's Keith Neilson. Picture: Contributed
Craneware's Keith Neilson. Picture: Contributed

The company, which writes billing programs for US hospitals, took over ClaimTrust in 2011 in a deal worth up to $19.5 million (£12.4m).

Now the firm is back on the hunt for takeover targets that will broaden its product range.

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Chief executive Keith Neilson told The Scotsman that the company is also developing software in-house and is looking to expand its team in Edinburgh.

The firm currently has about 80 staff at its Tanfield office and Neilson is looking for a further 20 product developers.

Craneware has also beefed up its senior management team after delays in securing contracts with larger clients, which led to a profit warning in June. The firm has already appointed a chief marketing officer (CMO) and a senior vice-president and is looking to take on at least one non-executive director from within the healthcare industry to talk to the board about what hospital finance directors want from their software.

Neilson said: “A lot of the big deals take place at a chief executive to chief executive level. There’s been a lot of consolidation – both among the big hospital groups and their technology suppliers – and, as soon as that kind of activity starts, it’s the chief executives that are called away.

“We were a bit light in this area and so appointing a CMO will help us to carry on talks over those contracts below chief executive level.”

His comments came as Craneware posted a 1 per cent rise in revenues for the year to 30 June to $41.5m.

House broker Peel Hunt said that the lack of major contracts had masked a 10 per cent rise in sales to smaller hospitals.

Underlying profits rose by 4 per cent to $11.2m, allowing the company to increase its total dividend by 9.5 per cent to 11.5p.

Julian Yates, an analyst at Investec Securities, said: “The stock has recovered strongly post the recent pre-close profit warning.”