Edinburgh’s Craneware completes Florida acquisition

Shares of Edinburgh-based Craneware, a provider of software for the US healthcare market, rose about 2% on Tuesday as it published an update on trading for the year ended June 30, 2021.

Craneware also announced the completion of the $400 million acquisition of Florida-based Sentry Data Systems.

The positive sales momentum experienced in the first half of the year continued into the second half, with the board expecting to report an increase in new sales of approximately 40% to over $42m (FY20: $30.4m),” said Craneware.

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

Total revenue and adjusted EBITDA for the year is expected to have increased by greater than 5% and 6% respectively (FY20: Revenue $71.5m: adj. EBITDA $25.2m).

“The group’s customer retention rate has remained above 90%, building the foundation for a return to double-digit organic growth in the future.

Craneware continues to invest in the expansion of its cloud-based financial and operational performance platform, Trisus, and capitalisation of R&D costs have been maintained at broadly the same levels as in prior years.

“The success of this investment has seen 900 current customers migrate to products on the Trisus platform.

The group’s cash reserves remain healthy, delivering a cash conversion rate of 90%, in line with the prior year.

“The group maintains a strong balance sheet, with cash of $235.6m at 30 June 2021, including the net funds of $187.4m received from the equity raise in anticipation of the acquisition of Sentry Data Systems of Florida …

“Following the acquisition, Craneware now serves nearly 40 percent of U.S. hospitals and more than 10,000 clinics and retail pharmacies across all the major pharmacy brands as well as local community pharmacies and clinics.”

In its outlook, Craneware said: “The financial challenges hospitals are currently facing, combined with the ongoing transition to value-based reimbursement, means the impact and insights that Craneware’s Trisus platform delivers are increasingly relevant. 

“The global pandemic has highlighted the importance of usable financial and operational data and it is expected this realisation will drive further investment by hospitals in the future.

The group continues to see significant new opportunities entering the sales pipeline and the board is confident in the group’s ability to deliver double-digit organic growth in the future.”

Craneware CEO Keith Neilson said: “We are pleased by the continued positive sale performance in the year and strong adoption of our Trisus platform, paving the way for accelerated future growth.

“The successful conclusion of the acquisition of Sentry Data Systems marks a transformational point in our journey, considerably expanding our customer base, data sets, product offering and market presence.

“Together, we will offer healthcare organisations innovative new ways to measurably impact operational and financial performance and generate sustainable margins that can be re-invested in providing better care for those who are in need.

“Our expanded opportunity and positive sales momentum provide us with considerable excitement and confidence as we work with the Sentry team to transform the business of U.S. healthcare.”