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Craneware shares up as unveils 'solid' results

Published: 13:35 04 Sep 2012 BST

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Shares in hospital software billing specialist Craneware (LON:CRW) were up over six per cent today in London as it unveiled a 'solid' set of final results.

For the year to June 30, the company reported a 29 per cent increase in pre-tax profit to $11.2 million compared to 2011.

That was on an eight per cent increase in revenues to $41.1 million (2011: $38.1 million).

The Edinburgh based firm had cash of $28.8 million as at year end and has recommended a 19 per cent increase in the total dividend for the year to 10.5 pence.

The company's software systems allow hospitals to write bills and claims to ensure they receive cash they are entitled to.

Its client base consists of around a quarter of all hospitals in the USA.  

The firm revealed today that added pressures on US hospitals, not least due to some recently introduced healthcare proposals, have in fact led to increased opportunities for the company.

"Craneware is a trusted and established part of the fabric of the US healthcare industry, with a client base consisting of around a quarter of all US hospitals," it said this morning.

"We are confident that the business is ideally placed with its in-house expertise, industry-leading product suite and balance sheet strength to help US healthcare organisations deal with their increasing fiscal and regulatory pressures."

Craneware also told investors it had entered the current financial year with revenue visibility of $108.7 million for the next three years -  back at historic high levels.

Speaking to Proactive Investors, chief executive Keith Neilson said the firm had seen increased company sales since January, which should boost sales through fiscal 2013 and 2014.

He is confident that Craneware is very well placed to address and benefit from an overiding trend within US hospitals of what he calls "big data" - where information comes from multiple sources.

He highlighted that on a global scale: "All data in existence today, 80 per cent of it was created in the last two years. 

"Now in hospitals that percentage is even higher just because they have been so slow to adopt technology in the past."

Following today's results statement, City broker Numis noted the numbers had been in line or slightly ahead of the company's trading statement in early July.

Rating the shares a 'hold', analyst David Toms said: “Despite our near-term concerns we remain of the view that Craneware is fundamentally a high-quality business.

“It has high renewal rates, a relatively demanding customer base and a strong and compelling return-on-investment case for its products."

Peel Hunt was positive, rating the stock a 'buy' and upping the price target to 400 pence, from 350 pence previously.

"Results to June were in line to ahead on most operating metrics and crucially, visibility on the new year is back at a more normal 80 per cent, from 68 per cent at this time last year."

Investec also rated the shares a 'buy' with a target price of 390 pence.

Craneware shares this afternoon were up 6.79 per cent, to stand at 349.75 pence.

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