CRANEWARE, the healthcare-focused software firm, has hailed the gathering momentum behind its products and services across the Atlantic after reporting a healthy rise in first-half profits.
Chief executive Keith Neilson said the underlying prospects are strong in its core US market, where he said insurance companies and the government are putting pressure on hospitals to move towards a “more value-based reimbursement model”.
The company, which employs around 320 staff across Glasgow, Edinburgh and the US, develops software such as revenue management tools and data analytics for healthcare providers.
READ MORE: Craneware on course for record year as investment pays off
Craneware reported a seven per cent rise in pre-tax profits to $9.3 million (£7.1m) for the six months ended December 31, on revenue up by 15% to $35.8m.
And it highlighted the strength of its forward-order book, noting that it has total visible revenue of more than $70m for its current financial year, and $196.2m for the three years to June 2021.
The company signalled its confidence in its outlook for this year and beyond by proposing a 10% rise in its interim dividend to 11p.
Mr Neilson said the firm’s first-half results underline the “ongoing momentum” behind Craneware.
He told The Herald: “We are starting to see some of the hard work the teams have been putting in over the last couple of years coming to fruition.
“[We have seen] multiple product launches and a few more that will come later in the year. All of that will drive continuing, accelerating growth as we go forward.”
Mr Neilson said the firm’s product development is focused on providing solutions which are “scale-able” for customers. Its most recent launch was a product under its Tritus brand which helps hospitals purchase and utilise medical items such as hip implants and stents.
READ MORE: Craneware to buy back £15m of shares from investors
The company also reported an encouraging response from clients to its Trisus cloud-based platform, which gives healthcare providers access to software solutions which allow them to take action on risks related to revenue, cost and compliance.
Mr Neilson signalled the US healthcare market is evolving in a favourable direction for the Scottish firm. He said: “We are definitely seeing ongoing pressure from the payers, the insurance companies and the government, to move hospitals to a more value-based reimbursement model. We kind of predicted that was coming, we are seeing more and more of that coming now with all of the major players signed up for that.”
The company continues to assess acquisition opportunities, though Mr Neilson said potential targets would have to meet at least one of three criteria set by the company. The criteria centre on whether the target business offered data Craneware currently does not have access to, gives access to customers offering selling opportunities, and offers specific knowledge it does not have.
Mr Neilson said: “We’re really looking to tick any one of those three boxes, and ideally all three of them.”
He added that the US healthcare market was consolidating more from the perspective of larger hospital companies acquiring others than among software firms which supply the sector. But Mr Nielson said: “Like any market just now, technology is pretty hot. There are a lot of movements going on.”
Asked about the effects of Brexit, the Craneware chief said the percentage of EU nationals on its books in Glasgow and Edinburgh has fallen since the Brexit vote in 2016. He said: “I think many people who had started to establish families over here were put off by the referendum result, and have relocated back to the mainland. We have heard that directly from people who have left.”
Shares in Craneware close down 2.3%, or 60p, at 2,600p.
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