More growth at Craneware

06/09/2010 Robert Tyerman

Healthcare financial software specialist Craneware has increased annual pre-tax profits 24 per cent to $7.3 million (£4.7 million).

The Livingstone, West Lothian-based company, whose software seeks to enhance the financial performance of US healthcare concerns, upped turnover 23 per cent to $28.4 million in the year to June and scored a 49 per cent rise to $89.8 million in contracted future revenues over the next 10 years, with more than $28 million coming during the next financial year.

Chief executive Keith Neilson says AIM-quoted Craneware, which increased year-end cash 13 per cent to $29.4 million, has a 'healthy pipeline of acquisitions' in prospect. He argues the company should benefit from US President Obama's healthcare reforms, which are expected to bring 40 million more US citizens into the healthcare system by 2014.

Neilson argues Craneware's strong US market position and product range create strong barriers to entry for potential competitors. The company, which lifted 2009-10 earnings 23.5 per cent to 21 cents a share, proposes a 4.94 cents (3.3p) final dividend for a 60 per cent full-year payout increase to 11.99 cents (8p) a share.

Recommended by Growth Company Investor at 152p in 2008 and again in February at 379p, Craneware shares now change hands at £4, up 12p today, valuing the company at £101.5 million. Partial profit-taking might be prudent, but it is worth retaining a fair chunk for potential future growth.