Trading Update and Notice of Results

RNS Number : 0577A

Craneware plc

31 January 2022

 

Craneware plc

("Craneware" or the "Company" or the "Group")

Trading Update and Notice of Results

Expanded Market Opportunity demonstrated by First Cross Sales

31 January 2022 - Craneware (AIM: CRW.L), the market leader in Value Cycle solutions for the US healthcare market, is pleased to provide an update on trading for the six months ended 31 December 2021 (H1 FY22).

Trading Update & Annual Recurring Revenue Growth

The Company is pleased to announce the first interim update for the enlarged Craneware Group, following the acquisition of Sentry Data Systems Inc ("Sentry") on 12 July 2021.

Group Revenues in the period have increased 110% to approximately $80m with an adjusted EBITDA increase of 75% to over $23m. The results include approximately a 5 month contribution from Sentry and are in line with management's expectations. 

Annual Recurring Revenue¹ has grown ahead of management's expectations in the period to a new milestone of approximately $165m (30 June 2021: $64.5m), demonstrating the resilience of our business and our vital role in transforming the business of healthcare. A contributor to this ARR has been modest organic license revenue growth. However, the recent wave of Omicron and reduced staffing levels have added to the pressure on hospitals and has recently been more pronounced, leading to the Group witnessing a slight elongation of the sales cycle and delays in professional services, impacted by shortages of available staff on site at hospitals. This means there is a reduced amount of professional services revenues being recognised in the period. This trend has tempered the overall organic growth during the period, but we expect this to correct as the current pandemic-driven challenges ease. 

Post-Acquisition Margin Accretion

The combined Group adjusted EBITDA margin of 28.75% is tracking to our target of returning to a 30% margin ahead of schedule, with initial synergies mitigating near term industry salary inflationary pressures. The nature of Craneware's multi-year SaaS contracts are expected to provide further protection in the second half of the year from these inflationary pressures as annual billings are made.

Integration Update & First Cross Sales

The integration of Sentry Data Systems continues to progress ahead of plan, and we are pleased to report the first cross sales of each company's products into the others' customer base. The integration of the management teams and associated operational departments is nearing completion and the sales and technology teams continue to track on target to be fully integrated by the end of the current financial year.

Outlook

Whilst remaining cognisant of the challenges our customers continue to face, our   ARR, strong balance sheet, and expanded market opportunity mean the Company remains on-course to deliver results for the current year in line with management's expectations.

Notice of Results

Craneware will announce results for the six months ended 31 December 2021 on 14 March 2022.

1 Annual Recurring Revenue includes the annual value of licence and transaction revenues as at 31 December 2021 that are subject to underlying contracts

Keith Neilson, CEO of Craneware plc, commented ,

"Our customers continue to be at the front-line in the evolving pandemic. With a peak of Omicron cases thought to be appearing in the US, the pressure on them through this human tragedy has only increased, with resource and staffing constraints creating new daily challenges. Craneware continues to be in awe of the bravery and dedication we see from all our customers as their absolute focus on selflessly serving their communities.  

" As the new Craneware Group our aim is to transform the business of U.S. healthcare . The global pandemic has highlighted the importance of usable financial and operational data and it is expected this realisation will drive future investment by hospitals. Through our increased scale and data sets, we are even better placed to provide innovative new ways to measurably impact operational and financial performance and are increasingly confident and energised by the opportunity ahead."

For further information, please contact:

Craneware plc	[phone]
Keith Neilson, CEO
Craig Preston, CFO
Alma (Financial PR)	[phone]
Caroline Forde, Hilary Buchanan, Joe Pederzolli	[e-mail]
Peel Hunt (NOMAD and Joint Broker)	[phone]
Dan Webster, Andrew Clark
Investec Bank PLC (Joint Broker)	[phone]
Patrick Robb, Henry Reast, Sebastian Lawrence
Berenberg (Joint  Broker )	[phone]
Mark Whitmore, Richard Andrews, Alix Mecklenburg-Solodkoff

About Craneware

We at the Craneware Group of companies, including our latest additions Sentry Data Systems and Agilum Healthcare Intelligence, passionately believe we can impact healthcare profoundly by delivering the insights healthcare organizations need to also transform the business of healthcare. Our shared vision is to be the operational and financial partner for U.S. healthcare providers.

Our combined suite of applications and industry-leading team of experts help our customers contextualize operational, financial, and clinical data, providing insights that clearly demonstrate what great looks like. These value cycle insights deliver revenue integrity and 340B compliance, as well as margin and operational intelligence - something no other single partner can provide.

Together, approximately 40% of registered U.S. hospitals are now our customers, including more than 2000 U.S hospitals and health systems and almost 10,000 clinics and retail pharmacies. Our customers are operating with a financial impact of nearly half a trillion dollars. We have data sets from customers covering more than 150 million unique patients encounters.

Learn more at craneware.com

 

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