Today’s trading update from Craneware shows that the timing issues that were a cause for concern when it reported it H1 results (see Craneware: not sparkling but building up to a shine) continued to dog performance in the second half of the year, resulting in a profit warning. Anticipated revenue for the full year (to June 30 2012) of c$41m (vs $38.1m) and adjusted EDITDA 15% up on the $10.1m of the previous year, are below market expectations.
The group, who provides revenue integrity solutions to the US healthcare market, saw buying cycles lengthen during H1 as healthcare providers shifted their spending priorities to concentrate on electronic health records. That trend continued into H2 apparently, as it was unable to close several large deals it had highlighted at the time of its interim results. The deals are progressing and management says H2 month-on-month activity and sales levels suggest sales cycles are returning to normal lengths as providers focus back on overpayment recovery but it looks like the benefits will only accrue in fiscal 2013. There is still some uncertainty in its market but Craneware has a good track record and is in good shape overall. Full year results will be announced on September 4 2012.