CRANEWARE has declared moves by the Trump administration to repeal Obamacare in the US will have no effect on the fundamental strengths of its revenue management solutions for the healthcare market.
Speaking the morning after President Trump unveiled a new healthcare Act – replacing reforms brought in by his predecessor Barack Obama to make healthcare more accessible – Craneware chief executive Keith Neilson insisted the changes would not affect demand for its products.
The American Health Care Act would, among other things, preserve the right for people with pre-existing conditions to have insurance, however it would allow insurers to charge higher premiums for those who let their coverage lapse.
Mr Neilson, who said the measures draw a distinction between the right to have insurance and the ability to pay, observed that the pressures on healthcare providers from an ageing population will remain regardless of which policies are in effect. And that means the changes should not affect the demand for products which help hospitals manage costs, such as those supplied by Craneware.
Noting that the “fundamentals have not changed” for Craneware in spite of the legislative moves, Mr Neilson reported that the company has seen “accelerated sales to existing customers and new customers” since Trump was elected in November. “People see it as a way of solving some of these fundamental underlying [challenges in the market],” Mr Neilson said.
He added: “Customers understand the relevance of what we are doing… We believe we are in as good a place as we can be.”
Craneware, which supplies products to around one-quarter of the estimated 6,000 US hospitals, said pre-tax profits rose by 23 per cent to $7.5 million (£6.1m) in the six months ended December 31. That came as revenue jumped by 16 per cent to $26.8m.
Mr Neilson said the company was achieving growth across a “whole mix” of its products, including its “core software” and a solution for the pharmaceutical sector designed to improve transparency around drug pricing. That mix means the company is “not beholden to one thing”, he added.
Mulling the outlook for the second half, Mr Neilson said the company has total visible revenue of $55.4m for its current financial year. This means it has visibility on 96 per cent of the level it expected to have in place by then end this year.
With sales running approximately 16 per cent ahead of the same stage last year, the company added that it has visible revenue of $155.5m for the three-year period to June 2019, compared with three-year visible revenue of $128.1m at the same stage last year.
Asked whether the Edinburgh-based company would consider acquiring other businesses, Mr Neilson said it was an area Craneware “continues to look at”. Whether any deals are done will be driven by the capability it needs to facilitate its expansion into different areas, he explained.
The company said it maintained its “strong” cash position at $45m at the half year, in line with last year, after making a dividend payment of $3.2m and investments of $4.5m in the first half. It proposed a 16 per cent in interim dividend to 8.7 per cent.
Mr Neilson added: “Against a backdrop of the recent US Presidential election, the overriding consensus for the need to drive value in US healthcare has been re-affirmed.”
Shares in Craneware closed up 15p at 1,197.5p.
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