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Interim Results

1 March 2021 – Craneware (AIM: CRW.L), the market leader in Value Cycle software solutions for the US healthcare market, announces its unaudited results for the six months ended 31 December 2020.

 Financial Highlights (US dollars)

  • Revenue increased 6% to $38m (H1 2020: $35.9m)
  • Adjusted EBITDA1increased 5% to $13.3m (H1 2020: $12.7m)
  • Profit before tax increased 3% to $9.9m (H1 2020: $9.6m)
  • Adjusted basic EPS2 increased 5% to 32.5 cents per share (H1 2020: 31.1 cents per share)
  • Cash position of $50.7m (H1 2020: $45.0m)
  • Interim dividend increased 4% to 12p per share (H1 2020: 11.5p per share)
  • Further investment in R&D and innovation of $11.6m (H1 2020: $10.3m), of which $4.5m capitalised (H1 2020: $4.0m), to take advantage of the growing market opportunity
  1. Adjusted EBITDA refers to earnings before interest, tax, depreciation, amortisation, share based payments and acquisition and share transaction related costs.
  2. Adjusted Earnings per share (EPS) calculations allow for the tax adjusted acquisition costs and share related transactions together with amortisation on acquired intangible assets

 Operational Highlights

  • Continued operational and financial progress despite ongoing COVID-19 backdrop
  • New Sales* more than 30% ahead of strong comparable period in the prior year
  • Strong growth in Trisus® metrics:
    • More than 500 hospitals now using the Trisus platform
    • Trisus solutions accounted for c. 16% of New Sales (H1 2020: 10%)
    • Over 90m anonymised aggregated patient encounters included within data on the platform, an increase of 30% in the last three months
  • Remaining core solutions, Chargemaster Toolkit and Pharmacy ChargeLink, on track to be migrated to the Trisus platform within the next twelve months
  • Strong customer retention rates above 90% with dollar value of renewals returned to c.100%

 

Outlook 

  • Strong sales pipeline for the current financial year and beyond
  • As at end of December 2020, total visible revenues of $206.4m for the three-year period to June 2023 (H1 2020 same three-year period: $189.6m)
  • The Board is cognisant of the challenges presented by the macro environment but remains confident in the continued positive performance of the business
  • The Board’s expectations for the full year ending 30 June 2021 remain unchanged 

* New Sales refers to the total value of contracts signed in the period with new customers or the sale of new products to existing customers 

Keith Neilson, CEO of Craneware plc commented, 

“The positive performance in the first half of the year provides a strong foundation for future growth. We are making considerable progress on our Trisus expansion strategy and seeing accelerated adoption of this cloud-platform by our existing and new customers. 

“Managing the impact of the COVID-19 pandemic has clearly been the top priority for all healthcare-related organisations over the past year and will continue to be the case for many months to come, providing front-line care while adjusting to new methods of healthcare delivery and ensuring their financial operations can respond. Our customers continue to take steps to create further resilience across their financial operations and we are committed to providing them with the tools and insight to do so. 

“The first half’s positive sales performance has continued with ongoing pipeline growth, a growing Trisus customer base, expanding offering and clear market need. While cognisant of the challenges presented by the macro environment, we are confident in the continued positive performance of the business and accelerated growth rates moving forward.” 

For further information, please contact: 

Craneware plc

+44 (0)131 550 3100

Keith Neilson, CEO

 

Craig Preston, CFO

 

 

 

Alma (Financial PR)

+44 (0)20 3405 0212

Caroline Forde, Robyn Fisher, Helena Bogle, Joe Pederzolli

craneware@almapr.co.uk

 

 

Peel Hunt (NOMAD and Joint Broker) 

+44 (0)20 7418 8900

Dan Webster, George Sellar, Andrew Clark

 

 

 

Investec Bank PLC(Joint Broker)

+44 (0)20 7597 5970

Patrick Robb, Henry Reast, Sebastian Lawrence

 

  

 

Berenberg(Joint Broker)

+44 (0)20 3207 7800

Mark Whitmore, James White, Alix Mecklenburg-Solodkoff

 

 About Craneware    

Craneware (AIM: CRW.L), develops and provides financial and operational optimisation software & analytics. Craneware is the leader in automated value cycle solutions, collaborates with U.S. healthcare providers to plan, execute and monitor value-based economic performance. Our passion and purpose is to impact healthcare profoundly by improving healthcare providers’ operational efficiency and margin, so they can continue investing in providing quality care for their communities.

Founded in 1999, Craneware is headquartered in Edinburgh, Scotland with offices in Atlanta and Pittsburgh employing over 350 staff. Craneware’s value cycle management suite includes charge capture, strategic pricing, patient engagement, claims analytics, revenue recovery and retention, and cost and margin intelligence solutions.

 Learn more at www.craneware.com

 

Chairman’s Statement 

The on-going professional, personal and emotional pressures being exerted on our customers by the COVID-19 pandemic is changing the way they deliver healthcare. Our teams have remained focused on providing our customers with the data they need today, and the tools they will need tomorrow, to ensure they have the financial confidence to continue to provide the outstanding front-line care being asked of them in this challenging environment. The Board and I are grateful for the continued high levels of commitment and endeavour shown by our teams and those of our customers.

With the majority of our teams continuing to work from home, and all the personal challenges that the pandemic brings, it is particularly pleasing to be in a position to report on a period of continued strategic and financial progress.

Following several quarters of building sales momentum, Craneware has delivered healthy levels of revenue and profit growth along with continued expansion, both of the customer base for Trisus, our next-generation cloud-based platform and its number of applications. Clear progress has been made against each of the Company’s ‘Three Growth Pillars’ with the acceleration of customer adoption of Trisus contributing significantly to this effort as expected.

Revenue has increased 6% to $38.0m (H1 2020: $35.9m), driving growth of 5% in adjusted EBITDA to $13.3m (H1 2020: $12.7m). Encouragingly, New Sales are more than 30% ahead of the strong comparable period in the prior year, with solid demand across our applications, from both new and existing customers. Sales of Trisus applications grew to approximately 16% of New Sales (H1 2020: 10%), demonstrating the potential of these solutions to be catalysts for increased growth rates in the future. Customer retention rates remain high, at above 90% and the dollar value of renewal rate of customers at the end of their multi-year contracts returning to c.100%. Our three-year revenue visibility metric has increased 9% to $206.4m at period end, providing us with the confidence to continue to invest in the expansion of our offering, as we seek to capitalise on our significant market opportunity.

The Group maintains healthy cash reserves of $50.7m (H1 2020: $45m), after returning $5.3m to shareholders through dividends and investing $11.6m in R&D (H1 2020: $10.3m). Capitalised R&D at $4.5m represents the same percentage of total R&D spend (H1 2020: $4.0m). The Group delivered positive operating cash conversion in the period of 100%.

As I assess the progress being made, it is clear to me that Craneware has a clear, long-term growth opportunity ahead. With almost a third of its customers taking advantage of the increasingly powerful Trisus cloud-platform and expanding range of applications, that opportunity is now coming more clearly into focus. The positive progress we are seeing across our key metrics provides the Board with confidence in the Group’s ability to a return to double-digit growth in the future.

The Board is cognisant of the challenges presented by the macro environment but remains confident in the continued positive performance of the business and our expectations for the full year ending 30 June 2021 remain unchanged.

Will Whitehorn

Chairman

1 March 2021

 

Strategic Report 

We are pleased to have delivered a good set of financial results in the first six months of the year, with the growth in New Sales and Trisus sales being particularly encouraging indicators of the successes being achieved.

We have seen a considerable increase in the number of hospitals using our next-generation cloud-based Trisus platform, resulting in more than 500 hospitals now using the platform, contributing over 90m individual anonymised patient encounters available within it. With each new hospital that joins the platform, and each new data point recorded, the platform becomes more powerful, providing even greater insight into the ways in which hospital management teams can better manage and protect their financial margin. The mitigated risks, efficiencies and returns on investment being delivered by our applications will provide the confidence and continuity for our customers to invest in the delivery of quality care to their communities.

Our product innovation has continued at pace, and we are on track for the migration to Trisus of our two remaining core products, Chargemaster Toolkit and Pharmacy ChargeLink.  We launched a free-to-use application, Trisus Pricing Transparency, in the period to help hospitals meet the CMS Pricing Transparency Final Rule requirements which came into effect in January 2021. This has been well-received across both existing and new customers, encouraging accelerated migration to the Trisus platform and we have continued the investment in further enhancements across our range of applications.

This positive progress has been achieved against the backdrop of COVID-19. Whilst as a business we continue to be relatively insulated from the direct impacts of the pandemic, our customers are on the front-line. Supporting them and the phenomenal work their teams have done has been, and will continue to be, our top priority through these times. Never has the need for accurate financial data, insight and analytics been more important, and we will continue to do all we can to ensure our customers have the tools they need to maintain the financial health of their organisations.  

 

Market – the move to value-based care continues at pace

Managing the impact of the COVID-19 pandemic has clearly been the top priority for all healthcare-related organisations over the past year and will continue to be so for many months to come. Operationally, healthcare providers have had to adjust to new methods of healthcare delivery, while ensuring their financial operations have the flexibility and agility to charge for those services appropriately, highlighting the importance of usable financial and operational data. Healthcare providers’ requirements for greater insight into cost of care, associated margins and the value being derived is as high, if not higher, than ever. Against that backdrop, the US healthcare market continues to transition from a fee-for-service reimbursement model, towards value-based care, aiming to redress the current imbalance in US healthcare between spend and outcomes. Under value-based care, healthcare providers, including hospitals and physicians, are paid based on patient health outcomes. A hospital’s ability to remain financially secure in a value-based care system is dependent on the collection of granular data and the use of insightful analytics to understand the opportunity to deliver better value. This presents a large, growing opportunity for the Group given Craneware’s specialism in helping hospitals better understand and manage revenue and cost through data-driven solutions.

Our customers continue to take steps to create further resilience across their financial operations. We are committed to partnering with them by providing the platform, regulatory information and data to enable them to do so. We believe that both the Group and our customer base are strongly placed to deal with the future impacts of the pandemic and for our products to be part of the solution in terms of helping hospital preparedness.

With the new administration in the White House we are yet to see any major changes to the political landscape with regards to US healthcare. Both Republicans and Democrats have previously expressed their desire for healthcare reform and the industry widely anticipates that reform will remain a key agenda point moving forward, with the drive to derive greater value from healthcare sitting at its heart.

Growth Strategy – Innovation to profoundly impact US healthcare operations which will drive demand and expand our addressable market.

To date, our growth has been driven through increases in market share and product set penetration (land and expand). In recent years, we have invested in the development of the Trisus platform; a sophisticated cloud data aggregation and intelligence platform which will allow us to migrate our existing products to the cloud, leverage our data assets to expand our offering, integrate third party solutions to the platform and benefit from the scalability of cloud-technology.

Our software solutions sit at the heart of our customers’ operations, tapping into the aggregated anonymised data held within Trisus to provide greater insight and control to their financial operations and thereby optimise their financial performance.

 

Three Growth Pillars

 

Our growth strategy has three fundamental growth pillars:

  1. The transition of our customers to cloud-based versions of our existing on-premise solutions, to act as a gateway to the benefits and additional applications on the Trisus platform.

Currently, more than 500 customers, almost a third of our customer base are utilising one or more of the Trisus applications, with almost the entirety of the remainder connecting to the platform via the Trisus Bridge – the first step for significant migration to the platform from within our user base. This is evidence that both our existing customer base and the wider healthcare provider market have responded positively to the technological evolution of the Craneware solution set.

We have started the migration of early adopter customers to the cloud based Trisus versions of our two core product offerings: Trisus Chargemaster, the replatformed version of our Chargemaster Toolkit, and Trisus Pharmacy, a new product, which in phase one, will sit alongside our on-premise Pharmacy ChargeLink, and subsequently be expanded to include all Pharmacy ChargeLink functionality. Customer feedback has been extremely positive, identifying clear additional benefits the platform is delivering, including ease of migration, use and deployment throughout large scale implementations.

The full Trisus Chargemaster solution will be available by the end of calendar 2021. All existing Chargemaster Toolkit customers are now on a hybrid version, with their data synchronised to the Trisus platform, and using a single Trisus sign on, meaning migration to the full cloud version and all its additional functionality with take only minutes once launched. All customers who have signed new contracts for Chargemaster Toolkit in recent periods have an understood migration plan to Trisus Chargemaster, and recognise this as an easy entry to the Trisus platform.

Pharmacy ChargeLink customers are being offered the opportunity to extend their products with the addition of the cloud based Trisus Rx Financial Management,  which is a precursor to further applications in the Trisus Pharmacy suite, the complete replacement for the on-premise solution. This will continue to be developed in a modular fashion, allowing customers to select which mix of applications best suits their needs as they become available.

We are continuing to develop the additional functionality of these cloud offerings as we move towards general release.

 

  1. To continue to enhance the capabilities of the platform through the addition of new technology layers and applications, developed through both internal R&D and selective M&A.

During the period we announced the availability of Trisus Pricing Transparency (“TPT”) to all US healthcare providers. This no cost Trisus solution was developed to enable organisations not only to meet CMS Pricing Transparency Final Rule requirements (which came into effect in January 2021) but ensure that organisational pricing data is most accurately represented for patients on an ongoing basis on the new Craneware Patient portal allowing individuals to “shop” for their healthcare needs.

TPT  identifies which are a hospital provider’s top 300 ‘shoppable services’, being the bundles of care most frequently delivered to patients, and recommends which services to publish across a variety of payors, meeting and going  beyond the needs of the Act. These insights allow hospitals to make valuable business decisions, inform the overall pricing strategy of the hospital, monitor patient search behaviour, and rebalance pricing strategies to ensure compliance and market competitiveness while addressing the pressing problem of transparency of cost for potential patients.

TPT adoption has accelerated migration of existing customers to the Trisus platform and encouraged new users to benefit from the power of the Trisus platform, which provides a clear pathway for wider Trisus application uptake in the future by these new customers.  

Through the growth of our Trisus customer base, and the interaction of their data with the Trisus platform, we have in excess of 90m individual anonymised patient encounters recorded on the platform, an increase of 30% in just three months. The greater number of data points, the more powerful the analytics and insights that can be provided to help hospitals in their financial decision-making. These encounters include roughly one fifth of all emergency room visits in the US during the last year and almost one quarter of all hospital admissions.

We will continue to invest in expanding the capabilities of the platform, developing additional applications and tools, to provide further benefits to our customers. We are pleased to confirm that the level of sales of Trisus applications has now exceeded sixty percent (60%) of the amount of capitalised R&D spent on the platform and Trisus applications development to date, already underwriting the majority of the investment made. 

M&A 

While organic growth remains a priority, we continue to evaluate the market and will continue to pursue strategically aligned companies that will accelerate our growth strategy. This is underpinned by four key acquisition criteria of which target companies must fit into at least one, being: 

  1. the addition of data sets;
  2. the extension of the customer base;
  3. the expansion of expertise; and
  4. the addition of applications suitable for the US hospital market.

In evaluating acquisition opportunities, the Board implements a strong valuation discipline seeking to maintain its prudent approach to preserving balance sheet strength and efficiency for the long-term.

Targets that are profitable with recurring revenue models that provide earnings accretion within the first 12 months of ownership are prioritised.

 

  1. To grow our customer footprint, through increasing the attractiveness of our offering and acquiring non-overlapping customers, which in turn provides further cross-sale opportunities.

We are pleased with the sales activity during the half, which saw New Sales >30% ahead of the same period in the prior year. 30% of these New Sales were to new customers, expanding our customer footprint. Expansion Sales to existing customers represented 70%, demonstrating Craneware’s ability to continue to cross sell further solutions. All sales have been driven by mitigation of risk, efficiency of operations and compelling ROIs for our customers.

Sales of Trisus products represented 16% of New Sales in the period, with Trisus sales in the six months significantly ahead of both of the previous two six month periods. We also saw our first Trisus renewals in the period.

Customer retention has always been strong, and we continued to see our customer retention rate remain high in the period above 90%, with renewals by dollar value at c.100%.

 

 

Financial Review

In our trading update released on 20 January 2021, we confirmed that the group had secured New Sales at a significantly higher level than in the first half of the prior year.  Through our Annuity SaaS business model (described below), the vast majority of the revenue from these New Sales will be recognised in future periods. We are pleased to confirm the positive sales performance in prior periods has resulted in an increase in both revenue and adjusted EBITDA in the period.  For the six months to 31 December 2020, revenues have increased 6% to $38.0m (H1 2020: $35.9m) and adjusted EBITDA has increased 5% to $13.3m (H1 2020: $12.7m). Adjusted earnings per share has increased 5% to 32.5 cents per share (H1 2020:  31.1 cents per share).

These positive results have been achieved despite the macro-economic uncertainties created by the COVID 19 pandemic.  Whilst we are pleased to be able to report this financial success in the period, we have never forgotten that our customers continue to be on the front line. Supporting them and their teams, in the work they have done and continue to do, remains our top priority through these times.

As healthcare organisations look beyond the impact of the pandemic, it is increasingly clear to all that there is a need for accurate financial data, supporting analytics and the insights those analytics can bring. We are committed to partnering with our customers via the ongoing development of the Trisus platform and the applications that sit upon it. To fully deliver on the opportunity we have ahead of us and the impact we can make to our customers’ financial health, it is essential we continue to make the right investments now.

As a result, we have further increased our investment in R&D by 13% to $11.6m (H1 2020: $10.3m). Of this investment $4.5m, being 39%, relates to new product development and enhancements and as such has been capitalised (H1 2020: $4.0m, 39%), the balancing $7.1m (H1 2020: $6.3m) has been expensed as incurred. The amounts we capitalise represent the cash reserves we have utilised in the period, to invest in our future. This is an efficient and cost-effective way to further build out our Value Cycle strategy. We take great care to only capitalise projects that will bring future economic benefit to the Group.  One of the ways we ensure this is to monitor the value of contracts sold for these new products once launched against the costs that have been capitalised to date.  I am pleased to confirm, in regards to the total costs we have capitalised in this and previous periods relating to our Trisus developments (including applications that have yet to be brought to market) we have sold contracts that already cover over 60% of this total.

We continue to maintain healthy cash reserves, which at the period end were $50.7m (H1 2020: $45.0m). We continue to target operating cash conversion of 100% of adjusted EBITDA to operating cash over a 12-month period. This was exceeded in the 12 months prior to 31 December 2020, delivering 100% cash conversion within the six-month period under review.  From our cash reserves, we have returned $5.3m to our shareholders through dividends and made the $11.6m investments in R&D detailed above.

The Group’s Annuity SaaS business model and associated revenue recognition policy is designed to focus on the long-term growth and stability of the Group. The revenue element of new sales related to software licenses, where performance obligations are met over time, results in revenue being recognised over the period the license is provided to the customer (which for a new hospital sale is an average of over four years). In addition, other revenue generated through new sales relates to consulting services and training which are also satisfied over time as the service is provided or the project is delivered.

We have previously identified that there are a number of benefits to this revenue recognition model including high levels of cash conversion and high levels of future years’ revenue visibility. To demonstrate the high levels of visible revenue generated the Group reports its ‘Three Year Visible Revenue KPI’. This KPI demonstrates the underlying annuity revenue stream that builds as a result of sales and these revenue recognition policies.

Total visible revenue for the three-year period 1 July 2020 to 30 June 2023 has increased 9% to $206.4m from $189.6m for the same three-year period as at 31 December 2019. Of this, $166.3m relates to ‘Revenue under Contract’, $39.6m ‘Renewal Revenue’ and $0.5m of ‘Other Recurring Revenue’.  ‘Revenue under Contract’, relates to revenues that are supported by ongoing underlying contracts. ‘Renewal Revenue’ relates to the amount of revenue which is potentially available for renewal and will be recognised in that fiscal year provided the underlying contracts are renewed. As we sign the renewal contracts, the aggregated related revenue for the new multi-year term moves from ‘renewal revenues’ to ‘revenue under contract’. The final element is ‘Other Recurring Revenue’, this relates to revenue that is not subject to long term contracts, which can be billable ‘per transaction’ or a set monthly amount and is usually invoiced on a monthly basis, however it is reasonable to expect it to be recurring in nature.

In producing this KPI, we show our ‘Renewal Revenues’ at 100% of dollar value, in line with our long-term average renewal rate by dollar value, which was c.100% in this period. We are introducing a new customer retention rate KPI this period, consistent with other SaaS based businesses, and report on Customer retention rates which remained over 90% in the period.

The high levels of visible revenue provide additional certainty in making our investment decisions and we continue to invest for the future growth of the Group, whilst at all times ensuring the efficiency of expenditures. This has contributed to our healthy adjusted EBITDA margin, which for the period is 35% H1 2020: 35%. The adjustments we make to both EBITDA and EPS are those normally expected and include costs related to acquisition associated equity funding that did not complete.

We continue to report the results (and hold the cash reserves) of the Group in US Dollars, whilst having approximately twenty five percent of our costs, mainly our UK employees and UK purchases, denominated in Sterling. The average exchange rate for the Company during the reporting period was $1.31/£1 which compares to $1.23/£1 in the corresponding period last year.

 

Dividend 

The Board has resolved to pay an increased interim dividend of 12p (16.32 cents) per ordinary share on 15 April 2021 to those shareholders on the register as at 19 March 2021 (FY20 Interim dividend 11.5p). The ex-dividend date is 18 March 2021.

The interim dividend of 12p per share is capable of being paid in US dollars subject to a shareholder having registered to receive their dividend in US dollars under the Company’s Dividend Currency Election, or who has registered to do so by the close of business on 19 March 2021. The exact amount to be paid will be calculated by reference to the exchange rate to be announced on 19 March 2021. The interim dividend referred to above in US dollars of 16.32 cents is given as an example only using the Balance Sheet date exchange rate of $1.36/£1 and may differ from that finally announced.

 

Update to the AGM 

Following our Annual General Meeting on 17 November 2020, we announced that all resolutions were passed with an over 70% majority, however there was one resolution, resolution 11, that had received a number of votes against. As such, we committed to consult with our shareholders to more fully understand the reasons for these votes against and to carefully reflect on the feedback we received.

We understand the voting in relation to resolution 11 (re-appointment of PricewaterhouseCoopers LLP as auditors) was specifically in relation to the expectation that a competitive audit tender for the external audit services takes place where the existing auditors have been in role for a period of 10 years or longer, in line with best corporate governance practice. Whilst the Board and the Audit Committee has been satisfied with PricewaterhouseCoopers’ performance as external auditor, we have concluded it is an appropriate time to review the market and conduct a tender.  It is our intent to conclude the tender process in the current financial year.  Depending on the success of the tender and the proposed transition plan (if required), this may result in the successful firm being in place for this year’s audit, the financial year ended 30 June 2021.

 

Outlook 

The positive performance in the first half of the year provides a strong foundation for future growth. We are making considerable progress on our Trisus expansion strategy and seeing accelerated adoption of the cloud-platform by our existing and new customers.

Managing the impact of the COVID-19 pandemic has clearly been the top priority for all healthcare-related organisations over the past year and will continue to be for many months to come, providing front-line care while adjusting to new methods of healthcare delivery and ensuring their financial operations can respond. Our customers continue to take steps to create further resilience across their financial operations and we are committed to providing them with the tools and insight to do so.

The first half’s positive sales performance has continued with ongoing pipeline growth, a growing Trisus customer base, expanding offering and clear market need. While cognisant of the challenges presented by the macro environment, we are confident in the continued positive performance of the business and accelerated growth rates moving forward.

 

Keith Neilson
Chief Executive Officer
1 March 2021

Craig Preston
Chief Financial Officer
1 March 2021

 

 

 

Craneware plc

Interim Results FY21

Consolidated Statement of Comprehensive Income 

 

 

H1 2021

H1 2020

FY 2020

 

Notes

$’000

$’000

$’000

 

 

 

 

 

Revenue

 

38,009

35,866

71,492

Cost of sales

 

(3,084)

(2,043)

(4,518)

Gross profit

 

34,925

33,823

66,974

Other income

 

9

9

Net operating expenses

 

(24,960)

(24,337)

(47,777)

Operating profit

 

9,974

9,486

19,206

 

 

 

 

 

Analysed as:

 

 

 

 

Adjusted EBITDA1

 

13,344

12,687

25,189

Share-based payments

 

(1,048)

(1,070)

(1,318)

Depreciation of property, plant and equipment

 

(732)

(743)

(1,489)

Exceptional aborted placing costs2

 

(283)

Amortisation of intangible assets

 

(1,307)

(1,388)

(3,176)

 

 

 

 

 

Finance income

 

117

192

Finance expense

 

(45)

(94)

Profit before taxation

 

9,929

9,603

19,304

Tax charge on profit on ordinary activities

 

(1,482)

(1,629)

(2,468)

Profit for the period attributable to owners of the parent

 

8,447

7,974

16,836

Other comprehensive income

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

Currency Translation Reserve movement

 

(25)

(34)

26

Total items that may be reclassified subsequently to profit or loss

 

(25)

(34)

26

Total comprehensive income attributable to owners of the parent

 

8,422

7,940

16,862

 

 

 

 

 

1Adjusted EBITDA refers to earnings before interest, tax, depreciation, amortisation, exceptional items and share based payments.

2 Exceptional items relate to legal and professional fees associated with an aborted placing.

 

 

 

 

 

 

Earnings per share for the period attributable to equity holders

 

 

 – Basic ($ per share)

 – *Adjusted Basic ($ per share)3

 

1a

1a

 

 

0.315

0.325

 

0.297

0.311

 

0.628

0.654

 

 – Diluted ($ per share)                    

 – *Adjusted Diluted ($ per share)3       

1b

1b

0.311

0.321

0.293

0.307

0.619

0.644

 

 

 

 

 

             

3 Adjusted Earnings per share calculations allow for the tax adjusted acquisition/ placing costs and share related transactions (if applicable in the year) together with amortisation on acquired intangible assets.

 

Craneware plc

Interim Results FY21

Consolidated Statement of Changes in Equity

 

Share Capital

Share Premium

Capital Redemption Reserve

Other Reserves

Retained Earnings

Total

 

$’000

$’000

$’000

$’000

$’000

$’000

At 1 July 2019

535

20,022

9

3,549

35,720

59,835

Adjustment on initial application of IFRS 16

931

931

Total comprehensive income – profit for the period

7,974

7,974

Total other comprehensive income

(34)

(34)

Transactions with owners

 

 

 

 

 

 

Share-based payments

981

1,079

2,060

Impact of share options exercised / lapsed

1

1,030

1,031

Dividend

(5,311)

(5,311)

At 31 December 2019

536

21,052

9

4,530

40,359

66,486

 

 

 

 

 

 

 

Tax adjustment on initial application of IFRS 16

139

139

Total comprehensive income – profit for the period

8,862

8,862

Total other comprehensive income

60

60

Transactions with owners

 

 

 

 

 

 

Company share movement in employee benefit trust

(1,255)

(1,255)

Share-based payments

195

(1,969)

(1,774)

Impact of share options and awards exercised / lapsed

45

(577)

175

(357)

Dividend

(3,766)

(3,766)

At 30 June 2020

536

21,097

9

4,148

42,605

68,395

 

 

 

 

 

 

 

Total comprehensive income – profit for the period

8,447

8,447

Total other comprehensive income

(25)

(25)

Transactions with owners

 

 

 

 

 

 

Share-based payments

1,003

1,003

Dividend

(5,329)

(5,329)

At 31 December 2020

536

21,097

9

5,151

45,698

72,491

 

Craneware plc

Interim Results FY21

Consolidated Balance Sheet as at 31 December 2020

 

 

 

H1 2021

H1 2020

FY2020

 

 Notes

$’000

$’000

$’000

ASSETS

 

 

 

 

 

 

 

 

 

Non-Current Assets

 

 

 

 

Property, plant and equipment

 

3,170

4,392

3,798

Intangible assets

 

40,069

33,237

36,783

Trade and other receivables

2

4,074

4,495

3,915

Deferred Tax

 

2,408

4,439

2,408

 

 

49,721

46,563

46,904

 

 

 

 

 

Current Assets

 

 

 

 

Trade and other receivables

2

21,896

20,999

21,003

Cash and cash equivalents

 

50,721

44,973

47,851

 

 

72,617

65,972

68,854

 

 

 

 

 

Total Assets

 

122,338

112,535

115,758

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

 

Non-Current Liabilities

 

 

 

 

Lease liability > 1 year

 

1,602

2,573

2,017

 

 

1,602

2,573

2,017

 

 

 

 

 

Current Liabilities

 

 

 

 

Deferred income

 

37,015

36,568

37,155

Current tax liabilities

 

2,203

137

797

Trade and other payables

3

9,027

6,771

7,394

 

 

48,245

43,476

45,346

 

 

 

 

 

Total Liabilities

 

49,847

46,049

47,363

 

 

 

 

 

Equity

 

 

 

 

Share capital                      

4

536

536

536

Share premium account

 

21,097

21,052

21,097

Capital redemption reserve

 

9

9

9

Other reserves

 

5,151

4,530

4,148

Retained earnings

 

45,698

40,359

42,605

Total Equity

 

72,491

66,486

68,395

 

 

 

 

 

Total Equity and Liabilities

 

122,338

112,535

115,758

 

Craneware plc

Interim Results FY21

Consolidated Statement of Cash Flow for the six months ended 31 December 2020

 

 

H1 2021

H1 2020

FY 2020

 

Notes

$’000

$’000

$’000

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

  Cash generated from operations                                                   

5

13,371

8,978

23,134

  Interest received

 

1

122

204

  Tax paid

 

(77)

(2,689)

(2,668)

  Net cash from operating activities

 

13,295

6,411

20,670

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

  Purchase of plant and equipment

 

(104)

(34)

(187)

  Capitalised intangible assets

 

(4,612)

(4,202)

(9,522)

  Net cash used in investing activities

 

(4,716)

(4,236)

(9,709)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

  Dividends paid to company shareholders

 

(5,329)

(5,311)

(9,077)

  Proceeds from issuance of shares

 

942

614

  Company shares acquired by employee benefit trust

 

(1,255)

  Leased property payments

 

(380)

(444)

(1,003)

  Net cash used in financing activities

 

(5,709)

(4,813)

(10,721)

 

 

 

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

2,870

(2,639)

240

 

 

 

 

 

Cash and cash equivalents at the start of the period

 

47,851

47,611

47,611

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

50,721

44,973

47,851

 

Craneware plc

Interim Results FY21

Notes to the Financial Statements

  1. Earnings per Share 

 

 

 

 

(a)        Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

 

H1 2021

H1 2020

FY 2020

 

 

 

 

Profit attributable to equity holders of the Company ($’000)

8,447

7,974

16,836

 

 

 

 

Weighted average number of ordinary shares in issue (thousands)

26,827

26,827

26,796

 

 

 

 

Basic earnings per share ($ per share)

0.315

0.297

0.628

 

Profit attributable to equity holders of the Company ($’000)

8,447

7,974

16,836

Adjustments1 ($’000)

283

378

688

Adjusted Profit attributable to equity holders ($’000)

8,730

8,352

17,524

 

 

 

 

Weighted average number of ordinary shares in issue (thousands)

26,827

26,827

26,796

 

 

 

 

Adjusted Basic earnings per share ($ per share)

0.325

0.311

0.654

 

 

 

 

 

(b)        Diluted

For diluted earnings per share, the weighted average number of ordinary shares calculated above is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has one category of dilutive potential ordinary shares, being those granted to Directors and employees under the share option scheme.

 

 

H1 2021

H1 2020

FY 2020

 

 

 

 

Profit attributable to equity holders of the Company ($’000)

8,447

7,974

16,836

 

 

 

 

Weighted average number of ordinary shares in issue (thousands)

26,827

26,827

26,796

 

 

 

 

Adjustments for: – share options (thousands)

346

408

404

 

 

 

 

Weighted average number of ordinary shares for diluted earnings per share (thousands)

27,173

27,235

27,200

 

 

 

 

Diluted earnings per share ($ per share)

0.311

0.293

0.619

 

 

 

 

H1 2021

H1 2020

FY 2020

 

 

 

 

Profit attributable to equity holders of the Company ($’000)

8,447

7,974

16,836

Adjustments1 ($’000)

283

378

688

Adjusted Profit attributable to equity holders ($’000)

8,730

8,352

17,524

 

 

 

 

Weighted average number of ordinary shares in issue (thousands)

26,827

26,827

26,796

 

 

 

 

Adjustments for: – share options (thousands)

346

408

404

 

 

 

 

Weighted average number of ordinary shares for diluted earnings per share (thousands)

27,173

27,235

27,200

 

 

 

 

Adjusted Diluted earnings per share ($ per share)

0.321

0.307

0.644

1 Relate to aborted placing costs, share related activities and amortisation of acquired intangibles if applicable in the period.  These adjustments are to focus on what the Group regards as a more reliable indicator of underlying operating performance and are consistent with other similar companies.

 

  1. Trade and other receivables 

 

H1 2021

H1 2020

FY 2020

 

$’000

$’000

$’000

 

 

 

 

Trade Receivables

17,411

16,138

18,171

Less: provision for impairment of trade receivables

(2,190)

(1,321)

(1,775)

Net trade receivables

15,211

14,817

16,396

Other Receivables

698

2,986

172

Prepayments and accrued income

3,641

845

2,055

Deferred Contract Costs

6,410

6,846

6,295

 

25,970

25,494

24,918

Less non-current receivables: Deferred Contract Costs

(4,074)

(4,495)

(3,915)

Trade and other receivables

21,896

20,999

21,003

 

 

 

 

 ­­­­­­There is no material difference between the fair value of trade and other receivables and the book value stated above. All amounts included within trade and receivables are classified as financial assets at amortised cost.

  1. Trade and other payables

 

H1 2021

H1 2020

FY 2020

 

$’000

$’000

$’000

 

Trade Payables

1,620

1,025

719

Lease creditor due < 1 year

1,066

900

946

Social Security and PAYE

1,903

509

973

Other Payables

71

155

49

Accruals

4,367

4,182

4,707

Trade and other payables

9,027

6,771

7,394

No derivatives have been entered into in the current reporting period.  No other assets or liabilities have been measured at fair value. Trade and other payables are classified as financial liabilities at amortised cost.

4. Called up share capital

 

 

H1 2021

H1 2020

FY 2020

 

Number

$’000

Number

$’000

Number

$’000

Authorised

 

 

 

 

 

 

Equity share capital

 

 

 

 

 

 

Ordinary shares of 1p each

50,000,000

1,014

50,000,000

1,014

50,000,000

1,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allotted called-up and fully paid

 

 

 

 

 

 

Equity share capital

 

 

 

 

 

 

Ordinary shares of 1p each

26,826,539

536

26,826,539

536

26,826,539

536

 

 

 

 

 

 

 

 

5. Consolidated Cash Flow generated from operating activities

 

 

Reconciliation of profit before taxation to net cash inflow from operating activities:

 

 

 

 

 

 

H1 2021

H1 2020

FY 2020

 

$’000

$’000

$’000

 

 

 

 

Profit before taxation

9,929

9,603

19,304

Finance income

(117)

(192)

Finance expense

45

50

94

Depreciation on plant and equipment

732

743

1,489

Amortisation of intangible assets

1,307

1,388

3,176

Share-based payments

1,048

1,070

1,318

 

 

 

 

Movements in working capital:

 

 

 

 

 

 

 

(Increase) in trade and other receivables

(1,051)

(1,760)

(1,183)

Increase/ (Decrease) in trade and other payables

1,361

(1,999)

(872)

 

 

 

 

Cash generated from operations

13,371

8,978

23,134

 

  1. Basis of Preparation

The interim financial statements are unaudited and do not constitute statutory accounts as defined in S435 of the Companies Act 2006. These statements have been prepared applying accounting policies that were applied in the preparation of the Group’s consolidated accounts for the year ended 30th June 2020 and the changes noted below in section 8. Those accounts, with an unqualified audit report, have been delivered to the Registrar of Companies.

The interim financial statements have been prepared on a going concern basis.  The Group’s activities and an overview of the development of its products, services and the environment in which it operates together with an update on the Group’s financial performance and position are set out in the Financial Review.  Despite the ongoing uncertainties and challenges caused by COVID-19 pandemic, the Group is profitable, cash generative and the half year trading results are in line with expectations.  An overview of the impact of the COVID-19 pandemic on the Group in the period are contained in the Strategic Report, and details were also contained in the Group’s Annual Report and Financial Statements for the year ended 30 June 2020. The Board continues to carefully monitor the impact of the COVID-19 pandemic on the operations of the Group.  The Viability Statement and the Board’s Going Concern assessment were also contained in the Annual Report for the year ended 30 June 2020.  

The Directors, having made suitable enquiries and analysis of the interim financial statements, including the consideration of: net cash reserves; continued cash generation; and Annuity SaaS business model; have determined that the Group has adequate resources to continue in business for the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing the interim financial statements.

  1. Segmental Information

The Directors consider that the Group operates in predominantly one business segment, being the creation of software sold entirely to the US Healthcare Industry, and that there are therefore no additional segmental disclosures to be made in these financial statements.

  1. Changes to Significant Accounting Policies

The accounting policies applied in these interim financial statements are the same as those applied in the Group’s consolidated financial statements as at and for the year ended 30 June 2020. 

  1. Availability of announcement and Half Yearly Financial Report 

Copies of this announcement are available on the Company’s website, www.craneware.com. Copies of the Interim Report will be posted to shareholders, downloadable from the Company’s website and available from the registered office of the Company shortly.