Enlarged, healthcare-focused Craneware looking to turbocharge growth after FY revenue jump

Software firm Craneware, which operates in the US healthcare market, has outlined an optimistic prognosis after seeing a major leap in turnover accelerated by a major acquisition inked last year.

The Edinburgh-headquartered business, which says it has 40 per cent of all US hospitals on its books, has revealed a trading update for the year ended June 30.

That comes after it bought Sentry Data Systems in a bumper $400 million (£333m) deal in July last year, saying the results include an approximate 11-month contribution from the Florida-based firm and are “in line with management’s expectations”.

Aim-quoted Craneware said group headline revenues in the year have increased 119 per cent to approximately $165.5m, with an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increase of 85 per cent to more than $50m.

Underlying annual recurring revenue (ARR) stepped up to $170m from $165m at December 31, 2021, and the firm reiterated how professional services income has been affected by Covid stymieing hospital activity, but “we anticipate this situation normalising in the near term”.

As at 30 June, Craneware had “strong” cash reserves of $47.2m, up from $41.7m at December 31, 2021, adding that following the integration of Sentry, the combined group adjusted EBITDA margin target of 30 per cent has been achieved ahead of schedule.

The Scottish firm added that its balance sheet strength, combined with “high levels of ARR and the potential for an acceleration in professional services revenue, leaves the group well positioned for FY23 and beyond… the board remains confident in its ability to address the expanded market opportunity presented”. It will announce full-year results on September 19, having reported interim results in March, including a 111 per cent year-on-year hike in revenues.

'We look to the future with confidence,' says Craneware chief executive Keith Neilson. Picture: contributed.

Chief executive Keith Neilson said: "As the US healthcare market and our customers continue to work tirelessly to overcome the challenges caused by the pandemic, the importance of useable financial and operational data becomes ever-clearer.

"Now, more than ever, hospitals and pharmacies need the insight and capabilities our offerings can give them, to ensure their financial strength and ability to continue to deliver outstanding care to their communities.

“With $170m in ARR this year, approximately 40 per cent of all US hospitals as customers, and a considerably increased scale and offering, we look to the future with confidence.”