Edinburgh-based Craneware plc, a provider of software for the US healthcare market, announced that it intends to commence a share buyback programme of £5 million immediately.

All shares acquired under the programme will be held in treasury.

Craneware shares rose about 3% to £11.40 to give the firm a stock market value of about £407 million — but the company’s stock is down about 38% year to date.

“The board firmly believes that the current market price does not reflect the substantial potential of the large addressable market opportunity of the group, nor the significant operational progress it has made as it has successfully migrated to a cloud-based SaaS model,” said Craneware.

“This migration further positions the group to deliver on future growth and enhanced shareholder value. As a result, the board believes that the buyback will provide an optimal use of cash to deliver value for shareholders by offsetting future dilution from existing share incentive schemes.”