Craneware hikes dividend after 23% jump in profits

Edinburgh-based software developer Craneware has unveiled a 16 per cent increase in its dividend as it posted a surge in half-year profits.

Craneware chief executive Keith Neilson. Picture: Neil Hanna

The Aim-quoted firm, which specialises in billing software for the US healthcare market, said shareholders would receive an interim dividend of 8.7p a share on 20 April as it expressed confidence in the outlook for the rest of the year.

The boost came as Craneware, which has about 250 staff, said pre-tax profits for the six months to the end of December jumped 23 per cent to $7.5 million (£6.1m), on revenues up 16 per cent at $26.8m.

Chief executive Keith Neilson told The Scotsman that the company, which this year marks its tenth anniversary on Aim, had turned in a “really positive” performance during the first half, a period that saw the election of Donald Trump as US president.

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He added: “We’ve been around for 18 years, and in that time the same fundamentals have been in existence – healthcare in the US is too high a proportion of spend compared to GDP. Therefore, the US needs to get value from the spend of their healthcare dollars, which currently sits at two to two-and-a-half times that of other G20 countries, yet they’re getting outcomes far below what those other countries are getting.

“The important thing for Craneware is helping providers, and that’s why we’re having the success we’re having.”

Neilson said the group now has revenues of more than $55.4m in its sights for the full year, even before any further sales are secured in the second half. Of its first-half sales, 49 per cent came from new customers in the hospital sector.

He also said the firm was on the look-out for acquisition opportunities, having struck its most recent deal in 2014 with the takeover of Ullapool software outfit Kestros, but noted it was “quite picky”.

He added: “Against a backdrop of the recent US presidential election, the overriding consensus for the need to drive value in US healthcare has been re-affirmed. There is ongoing support for the move to value-based care and increasing consumerism.

“These supportive market drivers, our investment for the future and our continued profitable growth give us confidence in continuing to deliver value for our stakeholders.”

Analysts at house broker Peel Hunt said: “There is demonstrable progress in Craneware’s expanding product portfolio, increasing the market opportunity that remains undiminished under the new US administration.”

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