Enlarged Craneware reports surge in full-year revenue

Healthcare technology company Craneware said in a trading update on Tuesday that group headline revenues were ahead 119% year-on-year for the financial year just ended, to $165.5m.

The AIM-traded firm said its adjusted EBITDA for the 12 months ended 30 June, meanwhile, was 85% higher at more than $50m.

It noted that the results included an approximate 11-month contribution from Sentry, and were in line with management’s expectations.

Software revenue performance and customer retention was “robust”, with underlying annual recurring revenue growing to $170m from $165m on 31 December.

As it reported at its interim results, professional services revenues were affected by the impact of the Covid-19 pandemic on hospital workforce and operations, but the board said it expected this situation to normalise in the near term.

As at 30 June, the group had cash reserves of $47.2m, up from $41.7m six months earlier, while net debt narrowed to $63.1m from $72.9m, representing 1.25x reported adjusted EBITDA.

The directors said the balance sheet strength, combined with “high levels” of annual recurring revenue and the potential for an acceleration in professional services revenue, left the group “well-positioned” for the 2023 financial year and beyond.

Craneware also confirmed that the integration of Sentry Data Systems was complete, with the relevant teams now combined and the enlarged sales team executing on a “significant” cross-sale opportunity.

As a result, the combined group adjusted EBITDA margin target of 30% was achieved ahead of schedule, with the synergies achieved to date and the multi-year software-as-a-service nature of Craneware’s contracts reportedly mitigating the industry salary inflationary pressures.

Looking ahead, the company said that while it was cognisant of the challenges its customers and partners were facing, the strength of the newly-enlarged group, the breadth of its solutions and the scale of data flowing through its platform left it “confident” in its ability to address the expanded market opportunity presented.

“As the US healthcare market and our customers continue to work tirelessly to overcome the challenges caused by the pandemic, the importance of usable financial and operational data becomes ever clearer,” said chief executive officer Keith Neilson.

“Now, more than ever, hospitals and pharmacies need the insight and capabilities our offerings can give them, to ensure their financial strength and ability to continue to deliver outstanding care to their communities.”

Neilson noted that it was now just over a year since Sentry was acquired.

“With $170m in annual recurring revenue this year, approximately 40% of all US hospitals as customers and a considerably increased scale and offering, we look to the future with confidence.”

Craneware said it would announce its results for the year ended 30 June on 19 September.

At 1528 BST, shares in Craneware were down 3.79% at 1,726.9p.

Reporting by Josh White at Sharecast.com.