It’s hard for modestly-sized UK software companies to fare well in the US market so watching Craneware’s success in the US healthcare sector has been a pleasure. The company stumbled in the first half of the year (see Profits warning from Craneware) as a result of healthcare providers prioritising the implementation of electronic health records over revenue integrity and this took its toll on full year results too. However, it was still able to post increases in revenue and profits, although not at the same double digit levels we’re used to seeing.
Profit before tax was up from $8.7m to $11.2m, on revenue that expanded 8% to $41.1m for the year ending June 30 2012. Cash levels are up on this time last year too - $28.8m vs $24.2m, despite acquisition costs and $4m in dividend payments. The 8% growth all came from H2, which saw month on month and quarter or quarter increases, CEO Keith Neilson told us. He believes the problems that caused the profits warning are over and the pipeline is looking strong. Given the state of the US economy and the upcoming election and its aftermath, it may turn out that the problems are over for the moment, not necessarily for the long term. That said, Craneware is in a strong position – it has software in place in 25% of US hospitals which gives is a good base to grow on. The Insight acquisition that was a drain on resources has now been fully integrated and has just about started to generate cross-sales. Following an agreement with a vendor in the clinical software area (whose application uses content from Craneware’s solutions, for which the vendor pays fees), Craneware has also moved into an adjacent market which opens up a further source of revenue. We feel there is more to come in the terms of fee-paying content partnerships.