Strong sales pipeline for Craneware

28th Feb 2011 08:17

Scotland-based Craneware, which provides revenue assessing software to US hospitals, continues its impressive growth in the six months to December 2010. AIM-quoted Craneware increased its rate of growth in the first half and continued to generate cash. Revenues grew by one-quarter to $16.6m with pre-tax profit 31% higher at $4.3m. Newer products are generating the majority of revenues. Net cash was $31.2m at the end of 2010. Craneware paid an initial $15m for ClaimTrust, which supplies audit and revenue recovery software. The maximum consideration could be $19.5m. More than two-thirds of ClaimTrust's $8.5m of annual revenues are recurring.There is still uncertainty about the US healthcare sector but this does not seem to be hampering Craneware. Hospitals still want to make sure that they are claiming all the revenue that they are entitled to and Craneware says that its sales pipeline has never been stronger.There is still plenty of scope for cross-selling to a customer base of 1,500 hospitals. Fewer than two-fifths of customers take two or more software products. The revenue under contract is $87.9m, which stretches out over 10 years. That figure is 22% higher than 12 months ago and does not include any contribution from ClaimTrust. Craneware is rebasing its dividend payments. It paid a total of 8p a share in 2009-10. The latest interim has been cut from 4.7p a share to 4p a share but the total dividend for 2010-11 will be higher. House broker Peel Hunt forecasts a dividend of 8.8p a share for 2010-11. Peel Hunt forecasts a rise in full year profit from $7.4m to $9.6m.