CRANEWARE, the healthcare-focused software company, has declared it is on track for a year of record sales and revenue growth after increasing interim profits by16 per cent to $8.7 million (£6.3m).
The Edinburgh-based firm, which operates mostly in the US market, said it is reaping the benefit of the investment it has made in new products and services in recent years. And it underlined the potential for further growth for its solutions across the Atlantic, where healthcare providers increasingly see the value in managing their revenue and data more accurately.
Craneware develops systems that allow hospitals to gain greater insight into their financial and operational data.
The company said its revenue increased by 16% to $31.1m in the six months to December 31, boosted by strong sales across its product suite and among the range of healthcare providers it supplies.
It secured two significant contract wins, one of which will see it provide solutions to the client’s 75 hospitals. The second builds on an existing contract which will see that client adopt Craneware solutions as it expands its own hospital network.
Those have been followed by two further deals since year end, with the company also highlighting strong interest in its new cloud-based platform, Trisus. It reported “good initial sales” over the first half for the first product to be sold under the platform, Trisus Claim Informatics, adding that it continues to build a “healthy pipeline of opportunities”.
The company said it has “visible revenue” of $63.1m for the current year, and $179.4m for the three years to June 2020, up from the $149.1m for that period reported last March. It is proposing a 15% increase in its interim dividend to 10p per share.
Chief executive Keith Neilson declared that the momentum built up by the company in the first half was continuing, putting Craneware on course for a record year. “I think it is the culmination of the work the team has been putting in over the last few years, about both educating and evangelising around the value cycle and value-based economics,”he said. “That is coming to fruition now. I think people in the healthcare industry in the US are looking to do things differently to how they have done it before to be able to extract more value for their patients and themselves.
“That’s resonating and reflecting both our revenue numbers and the accelerated growth we are seeing there, but on top of that our sales numbers which will drive growth in future periods.”
Craneware added between 50 and 60 staff to its headcount over the period, with Mr Neilson pledging to expand numbers
by a similar amount during the rest of the year. Its 300-strong team is broadly split between Edinburgh and the US, where it has offices in Atlanta and Pittsburgh.
Asked whether he had any concerns about Brexit impacting its ability to recruit staff from within the European Union (EU), Mr Neilson replied by saying Craneware recruits globally and would like to continue in that vein. He is “optimistic” the flow of staff available to Craneware will not be turned off because of Brexit. “I don’t believe it will get to that stage,” he said.
The firm works closely with universities and CodeClan, the digital skills academy, as part of its recruitment efforts in Scotland, Mr Neilson said.
“We think we are genuinely making a difference on healthcare, and hopefully that makes a difference to some people in their choice of employer,” he added. “We do have a couple of teams outside Scotland, in Atlanta and Pittsburgh, and that just allows us to pull the right people in at the right time.”
Meanwhile, Mr Neilson said the company would benefit from President Trump’s recent changes to the tax system in the US as its overall bill will come down. He described the debates in the US over healthcare reform and the President’s international trade policies as a “a bit of a distraction”.
Mr Neilson said: “The biggest thing for us is [that] US healthcare has now topped $3.5 trillion and is growing at about 5.6%.
“They spend twice as much as the OECD (Organisation for Economic Co-operation and Development) average, yet they are the only one of the OECD countries that has a life expectancy of less than 80 years. They are just not getting value from healthcare and that creates a multi-billion-dollar opportunity for us.”
Shares closed up 25p at 1,950p.
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