Trading Update and Notice of Results
Strong new sales performance indicates return to growth
23 January 2020 – Craneware (AIM: CRW.L), the market leader in Value Cycle solutions for the US healthcare market, is pleased to provide an update on trading for the six months ended 31 December 2019.
The Group has delivered a strong new sales performance in the first half of the financial year, with new sales over 30% ahead of H1 FY19, driven by an increased number of contracts being secured, as the Company worked through the backlog of contracts delayed from H2 FY19. There were good levels of Trisus sales activity, and a strong performance from the Company’s core product, Chargemaster Toolkit.
The actual number of hospitals renewing their contracts in the period is significantly above the prior year. However, our KPI “customer renewals by dollar value” when analysed for the six month period is 73%, which, while lower than our historic annual range of 85% – 115%, reflects the disproportionate impact the loss of a large customer has when measuring this statistic over a six month period.
In accordance with the Company’s revenue recognition policy, the majority of the revenue resulting from both new and existing contract renewal sales will be recognised over future periods, providing the Group with long term visibility of revenue under contract.
The Group expects to report revenue for H1 FY20 at similar levels to the comparator period (H1 FY19: $35.8m), in line with management expectations together with approximately 10% growth in adjusted EBITDA (H1 FY19: $11.6m).
The Group continues to invest in its product suite, including its new cloud-based Trisus solutions. Capitalisation for R&D costs has been maintained at the same dollar level as the previous two six month periods.
The Group maintains healthy cash reserves. Positive operating cash conversion combined with the normal seasonal pattern in collections and outflows, has seen operating cash conversion over the 12 months to 31 December 2019 of over 100% and the Board expects this trend to continue.
The Company has access to a further funding facility from the Bank of Scotland of up to $50m and the Board continues to investigate potential acquisition opportunities, in line with our stated strategy.
The strong sales performance in the period, positive market environment, continued sales momentum and high levels of revenue visibility mean the Board expects to meet market expectations for the full year ending 30 June 2020.
Notice of Results
The Company will announce results for the six months ended 31 December 2019 on 3 March 2020.
Keith Neilson, CEO of Craneware plc, commented,
“We have been pleased by the strong new sales performance and have seen an indication that sales cycles are shortening, which bodes well for continued sales momentum in the second half of the year. This trading performance and progress with the Trisus platform demonstrate the renewed momentum we are experiencing in the business.
“The ongoing transition to value-based care is a powerful underlying driver for our existing solutions and Trisus platform. We are committed to providing our customers with the tools they require to continue to deliver outstanding care to their communities and are passionate about the central role we will play in the ongoing evolution of the US healthcare market.
“The positive sales performance in the first half, combined with our extensive customer base, innovative product offering, high recurring revenues and financial strength, mean the Board expects to meet market expectations for the year and is confident in our ability to deliver long-term, sustainable growth.”
For further information, please contact:
Keith Neilson, CEO / Craig Preston, CFO
|+44 (0)131 550 3100|
|Peel Hunt (NOMAD and Joint Broker)|
Dan Webster / George Sellar / Andrew Clark
|+44 (0)20 7418 8900|
|Investec Bank (Joint Broker)|
Patrick Robb / Sebastian Lawrence / Henry Reast
|+44 (0)20 7597 5970|
|Alma (Financial PR)|
Caroline Forde / Hilary Buchanan / Helena Bogle
|+44 (0)203 405 0205|
Craneware enables healthcare providers to improve margins and enhance patient outcomes so they can continue to provide quality outcomes for all.
Craneware is the leader in automated Value Cycle solutions that help US Healthcare provider organisations discover, convert and optimise assets to achieve best clinical outcomes and financial performance. Founded in 1999, Craneware is headquartered in Edinburgh, Scotland with offices in Atlanta and Pittsburgh employing over 350 staff. Craneware’s market-driven, SaaS solutions normalise disparate data sets, bringing in up-to-date regulatory and financial compliance data to deliver value at the points where clinical and operational data transform into financial transactions, creating actionable insights that enable informed tactical and strategic decisions. To learn more, visit craneware.com and thevaluecycle.com.