LONDON (Alliance News) - Craneware PLC Tuesday reported higher profits for the first half of its financial year as the increasing complexity of the US healthcare billing system drove demand for its software.
The company, which makes billing and workflow management software for the US healthcare industry reported a pretax profit of USD4.8 million for the six months to end-December, up from USD4.5 million in the year-earlier period, as revenue rose to USD21.1 million, from USD20.1 million. It posted an interim dividend of 5.7 pence per share, up 9.6% from 5.2 pence.
Chief Executive Officer Keith Nelson told Alliance News that the US affordable care act, which has been dubbed Obamacare by its critics in the US because it was a key policy brought in by US President Barack Obama, has proved a boon for the company.
"There's new build models which have increased the complexity for how hospitals will be reimbursed for payment," Nelson said. "Its created more consumerisation, the patient is paying a bigger percentage of the hospital bill than they have before, which is driving that complexity."
The act, which aimed to give some US patients, particularly the young and elderly, more rights and protection to try and ensure they get health care without being hit with exorbitant bills, means that hospitals are coming under increasing scrutiny over how and whom they are billing, meaning record keeping has to be better, the CEO said.
"This is changing the dynamic of hospitals which is something we can help out with our patient access products, and the government is taking a closer look at how hospitals are actually billing and they're creating what's called recovery audit contractors," Nelson said.
Craneware said it it was winning more deals, bigger deals, more long-term deals, and from larger hospital groups. It expects the trend to continue.
"All of (the healthcare changes) have resulted in market consolidation," said Nelson. "It's very positive for us, we have an enterprise wide solution which allows hospitals to leverage the M&A activity that they're doing when they're bringing hospitals together."
Craneware is also continuing to develop a set of combined software services, integrating some of its core products, which allow the services to be implemented at smaller hospitals that do not have their own internal revenue-integrity teams.
"We have gone to the initial trials of that, they're actually just about complete. We'll look for a full launch some time during the course of the second half of this year early into our next fiscal year," Nelson said.
Craneware said that it retained healthy cash reserves, which would provide for further investments, including potentially bolt on acquisitions. Its cash at the end of 2013 stood at USD30.6 million, up from USD28.6 million a year earlier and about the same amount as at the end of June.
"We are looking at things across all of our four product families, typically US based," Nelson said. "Through both our diligence and our strategic overview, we have to pick the ones we believe have the best value back for our shareholders. There's opportunities for us in the future with different product families."
The company expressed its confidence for future growth, citing trends in US healthcare and its growing prominence in the market.
Craneware shares were flat at 585.00p Tuesday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.