Last checked at 19 Jan 2023 07:00
Craneware plc
("Craneware", "The Craneware Group", the "Company" or the "Group")
Trading Update and Notice of Results
19 January 2023 - Craneware (AIM: CRW.L), the market leader in Value Cycle solutions for the US healthcare market, today issues a trading update for the six months ended 31 December 2022 (H1 FY23).
Trading Update
Group Revenues in H1 FY23 are expected to increase by 6% to approximately $84.7m (H1 FY22: $80.2m) and adjusted EBITDA by 8% to $25.5m (H1 FY22: $23.7m).
Software revenues remain robust and we have seen bookings across our product offerings, despite our end market suffering the effects of inflationary pressures as it continues to recover from the pandemic. Professional services revenues, however, continue to be impacted and have remained at 8% of total revenues, rather than seeing growth back to the more typical level of 15%.
Our ongoing cost control across the Group has delivered growth in adjusted EBITDA in line with our expectations and we expect to deliver full year adjusted EBITDA in line with Board expectations.
The same market factors, combined with our normal seasonality, have resulted in cash reserves of $38.6m (H1 FY22: $41.7m), and total Bank Debt of $107.9m (H1 FY22: $114.6m).
In order to better align future growth of Annual Recurring Revenue ("ARR") to near term revenue growth and facilitate the future calculation of a Net Revenue Retention metric, the calculation methodology of the Group's ARR KPI has been aligned to only include bookings that have generated revenue by the reporting date. This primarily relates to the exclusion of contract pharmacy bookings where go live has not yet happened and therefore they have not contributed to revenue in the period.
As a result, ARR1 at H1 FY23 is $166.4m, demonstrating the Group's continued high levels of contracted revenue visibility.
Outlook
Whilst we expect to deliver on the Board's adjusted EBITDA expectation, in light of the ongoing impact on professional services revenue, the Board believes it to be prudent to presume that professional services contribution will not recover in the current year to historic levels, impacting the overall level of Group revenue growth.
Adjusted EPS continues to be impacted by the recent significant increases in interest rates and we expect this to continue in the second half.
The Group remains financially strong with healthy cash reserves and a solid foundation of Annual Recurring Revenue. This, combined with the breadth of solutions we can provide, the scale of data flowing through our platform and the industry drive to achieve better value in healthcare, means the Company remains confident in its ability to deliver double digit growth rates as these headwinds dissipate.
Notice of Results
Craneware will announce results for the 6 months ended 31 December 2022 on 6 March 2023.
1 Annual Recurring Revenue ("ARR") includes the annual value of licence and transaction revenues as at 31 December 2022 that are subject to underlying contracts and where revenue is being recognised.
Keith Neilson, CEO of Craneware plc, commented,
"Healthcare providers, both globally and in the US, continue to face many challenges, building back post pandemic and coping with inflationary pressures. Against this backdrop, we have delivered another robust performance, growing revenues and adjusted EBITDA, while maintaining a strong balance sheet and high levels of recurring revenue. Through the increased financial and operational insight our offerings provide our customers, we are well placed to support them through these difficult times and ultimately deliver on our growth ambitions."
For further information, please contact:
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Craneware plc | +44 (0)131 550 3100 |
Keith Neilson, CEO | |
Craig Preston, CFO | |
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Alma (Financial PR) | +44 (0)20 3405 0205 |
Caroline Forde, Hilary Buchanan, Joe Pederzolli | craneware@almapr.co.uk |
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Peel Hunt (NOMAD and Joint Broker) | +44 (0)20 7418 8900 |
Dan Webster, Andrew Clark | |
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Investec Bank PLC (Joint Broker) | +44 (0)20 7597 5970 |
Patrick Robb, Henry Reast, Sebastian Lawrence | |
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Berenberg (Joint Broker) | +44 (0)20 3207 7800 |
Mark Whitmore, Richard Andrews, Dan Gee-Summons |
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 organisations need to also transform the business of healthcare. Our shared vision is to be the operational and financial partner for US healthcare providers.
Our combined suite of applications and industry-leading team of experts help our customers contextualise 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 US hospitals are now our customers, including more than 12,000 US hospitals, health systems and affiliated retail pharmacies and clinics. 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 www.thecranewaregroup.com