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Craneware to hire staff in bid to boost R&D

SOFTWARE company Craneware is looking to add up to 10 developers at its Scottish headquarters to bolster new product development but has maintained it remains in the market for acquisitions.

KEITH NEILSON: Said the business had benefited from larger and longer term contracts. Picture: Julie Howden
KEITH NEILSON: Said the business had benefited from larger and longer term contracts. Picture: Julie Howden

Chief executive Keith Neilson said the business, which specialists in revenue monitoring and billing products for the US healthcare sector, was hoping to recruit more people in Edinburgh as well as at its bases in Boston and Nashville in the US.

The new hires in Scotland would predominantly be to increase Craneware's research and development capacity with any US additions also likley to include sales and marketing posts.

Pre-tax profits for the six months to the end of December 2013 increased 7% from $4.5million to $4.8m while revenue was up 5% from $20.1m to $21.1m.

Mr Neilson, who holds a 12.9% stake in Craneware, outlined how the business had benefited from larger and longer-term contracts being signed in the period

He said: "We started off with small community hospitals buying then started to see larger hospitals and hospitals groups buying longer term, bigger deals. We feel we are in a good place."

There was also a return to some contracts running for between seven and nine years which is higher than Craneware's historic average rate of five years.

Mr Neilson said: "I think some of the uncertainty in the healthcare market has meant people were not willing to commit but now they are.

"So that is a really good indication for us that people have developed their strategy and have [a way to] cope with all the different reforms that have gone through."

The company saw its net cash position grow from $30.3m at the end of June last year to $30.6m by the close of the trading period.

Craneware's only takeover deal was the $19.5m purchase of Nashville based ClaimTrust in 2011 but the company said it remains interested in making transactions.

Mr Neilson indicated there was nothing concrete at the moment but he and the rest of the executive team continue to look.

He said: "Like all these kind of things it is about trying to identify things that are going to provide really good long-term extra value for shareholders as opposed to developing in-house.

"That is why we brought on our chief marketing officer in September of last year to make sure we had the bandwidth to investigate these things. It is an ongoing process."

The company also continues to invest in research and development and is hoping to add to its headcount.

There are currently 85 employed in Edinburgh out of a total staff of around 200.

Mr Neilson said: "The teams in Edinburgh, Boston and Nashville are all really busy just now. We could do with more developers as well as there are some great opportunities to continue to grow the company."

Craneware reported that it has visible revenue for the period running from July 1 last year to June 30, 2016, of $114.4m which was up from the $109.5m it had booked in at its previous financial report.

Mr Neilson said: "Looking at all the different areas of [US] healthcare reform which have come through in the years.

"What we have been saying consistently is it is about the complexity, rules, regulations and data that is driven through.

"That is what we help hospitals steer themselves through so they can get reimbursement at the end of that so they are still able to provide patient care. All those things are coming together really well for us now."

Mr Neilson said the business had around 94% of its projected full-year revenue booked in.

He added: "We feel we can close that gap and feel we can accelerate sales growth and revenue in future periods."

Peel Hunt's Alexandra Jarvis said: "Background trends remain highly favourable given the pressures on the US healthcare system to bring costs into a sustainable range.

"We maintain our forecasts for 10% growth for the full year, as new contract wins flow through."

Shares closed unchanged at 585p.

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