Craneware update reverses stock plunge

Shares of Edinburgh-based Craneware, a software firm that specializes in US healthcare, recovered some of their recent losses on Friday morning after the firm issued an unscheduled trading update for the six months to December 31, 2018.

After falling almost 30% so far in December, Craneware shares rose about 8% on Friday morning after the announcement.

In the trading update, Craneware said: “Craneware … notes the recent movement in its share price and provides an update on trading to date in the six months ending 31 December 2018.

“The group is pleased to announce that it has continued to perform strongly in the first half of the financial year, with good levels of sales activity and customer renewals by dollar value continuing at their historic average of 100%.

“In accordance with the company’s revenue recognition policy, the majority of the revenue resulting from both new and existing contract renewal sales successes will be recognised over future periods, adding to the group’s long term visibility of revenue under contract.

“The group expects to report increases in both revenue and adjusted EBITDA in the range of 15% to 20% for the six month period ending 31 December 2018, continuing the double digit growth delivered in prior years.

“The group maintains healthy cash reserves and having seen the normal seasonal pattern in collections and outflows, expects operating cash conversion for the 12 months to be over 100%.

“The company has access to a further funding facility from the Bank of Scotland of up to $50m and the group continues to investigate potential opportunities in line with our stated strategy.

“With the record sales performance in the previous period, continued sales momentum and high levels of revenue visibility, the board remains confident in meeting market expectations for the full year ending 30 June 2019.”

Craneware CEO Keith Neilson said: “As we close the first half of our financial year, we look to the future with high levels of confidence.

“The strength of our trading performance to date and double-digit rate of growth demonstrate the ongoing momentum we are experiencing in the business.

“The depth of our solutions and the value they deliver to all strata of customers, including large and complex health systems, allows us to support our customers as they address the challenges resulting from the continued evolution of the US Healthcare market and the Affordable Care Act.

“We are playing an increasingly strategic role in assisting healthcare providers as they look to improve and sustain their financial performance, whilst mitigating operational and compliance risks.

“Our financial strength and high levels of revenue visibility for future years combine to give management confidence in its ongoing ability to deliver increasing stakeholder value this year and in the future.”