Medical software provider Craneware is looking to alleviate rising salary costs by “backfilling” jobs currently in the US with new hires in Scotland.
Chief executive Keith Neilson outlined this strategy as Edinburgh-based Craneware reported a doubling of revenues for the six months to December 31 following its £283 million acquisition of Florida-based Sentry. He added that this ability to juggle staffing requirements across the two continents is a “positive” for the business as surging global inflation drives salary demands higher.
Craneware provides billing platforms and related software to hospitals and other healthcare providers in the US. It currently employs about 760 people, with a headcount of 180 in the UK and the rest in North America.
READ MORE: Craneware boss in pay package boost
“Salaries in the US have historically always been between 40 and 60 per cent higher than what we would see here in the UK anyway,” Mr Neilson said, “so we can arbitrage between higher salary rates [in the US] and still pay a top salary here in the UK by taking some of the attrition that’s in the US and moving those jobs across here to Scotland.”
In a note to investors, house broker Pee Hunt said pricing power, hiring and related wage inflation are “key issues” for many business-to-business technology companies.
“Craneware is better positioned than most other B2B software companies,” analysts said. “Management believes these moving parts might in fact result in higher-than-planned savings, which they will likely utilise for expansion or greater wage increases.”
Revenues for the first six months of the financial year were up 111% on the same period a year earlier to $80.2m (£61.4m), with adjusted pre-tax profits 68% higher at $17.1m (£13.1m). After taking account of amortisation costs linked to the Sentry acquisition, which closed on July 12, pre-tax profits fell to $6.2m (£4.7m).
READ MORE: Software specialist Craneware predicts 'transformation' following Sentry deal
Mr Neilson, who set up the business in 1999 with co-founder Gordon Craig, said the integration of the biggest acquisition in the company’s history was going well. This work has been completed across the human resources, finance and legal functions, and is in the process of completion in product engineering, sales and customer-facing operations.
He added that the momentum seen in the first half “trails well” for Craneware’s return to double-digit growth within the next 18 months as markets get “closer” to normal in the wake of the Covid pandemic. Disruptions remain, however, with burnout levels high among healthcare staff and a backlogs of patients requiring treatment.
Shares in Craneware, which are listed in London, finished yesterday’s trading 15p higher at 1,725p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here