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Craneware (LSE:CRW) was one of the top gainers on the London Stock Exchange this morning on active trading of nearly 1.2 million shares, with the share price up nearly 20% at 364.00p as of 12:45 GMT. This comes of the release of two announcements by the company.
Two Corporate Announcements
The announcement of a 13.2% mid-year increase in revenues from $16.56 million to $18.75 million was the main headline in the report. Other financial highlights included in the report were:-
- An 11.8% decline in pre-tax profit from $4.33 million in FY2010 to $3.82 million.
- Adjusted EPS declined to $0.111 from $0.124 at the previous mid-year report.
The Board agreed to an interim dividend of 4.8p per ordinary share to shareholders of record as of March 9, 2012. The payout is scheduled for April 12, 2012.
The positives were that the renewal levels are strong, exceeding 100% of original dollar value, integration of the proprietary InSight is ahead of schedule and initial cross-sales have been delivered.
Though the company suffered a major setback during the first six months as a result of the loss of the business of an end-user network gained through a third-party contract, whilst their relationship with the contractor has been terminated. The focus of many U.S. healthcare providers on meeting deadline requirements to obtain Electronic Health Records Incentive Payments seemed to have impacted the company’s performance due to pre-occupation of those providers with obtaining those substantial incentives
New Channel Partner Agreement Signed
The second announcement was that the company has entered into a new Channel Partner contract. The new contract ensures performance by the unnamed Channel Partner with $7.5 million of guaranteed minimum payments from the Channel Partner to the company to be paid between now and the end of June 2014. The partnership extends Craneware’s reach into the State and Federal sectors of the U.S. market as the Channel Partner contracts with government healthcare projects & facilities for multi-year licenses for the Craneware products. This is the second Channel Partner agreement completed in as many months. The company reportedly has several similar deals in progress.
CEO Comments
CEO Keith Wilson represented the Channel Partner agreement as a game-saver for the year, saying, “We are pleased to announce this morning a significant new partnership which, combined with our growing pipeline gives us confidence in securing a positive outcome for the year, and mitigates the mixed results for the first half of the year which, in management’s opinion, were impacted by a combination of temporary factors.” In addition, he emphasised the partnership’s long-term impact as “… a strong endorsement of product families. We continue to make progress with several other large channel partner opportunities, which combined with the two announced in recent weeks further underline the Board’s confidence in current and future years.” Mr. Wilson indicated a very positive outlook for the company: “The dramatic upheaval taking place in the US healthcare market continues to present a significant long term opportunity for Craneware. Our vision is to be the partner that healthcare providers rely on to improve and sustain strong financial performance through revenue integrity. With approximately a quarter of US hospitals using one or more of our solutions and many of the largest suppliers to this market seeking to add our software to their offerings, we believe we are well placed to capitalise on this significant opportunity, delivering continued growth and shareholder value.”
Company Spotlight
Craneware develops and provides automated revenue integrity solutions designed to improve the financial performance of healthcare projects and institutions. The company’s products help hospitals and other healthcare providers retain more earned revenue for patient care services by increasing efficiency of operations and by identifying, addressing and preventing revenue leakage.
References
↑ Official company history
