Craneware

REDUCE

03/02/2011 Ben Jaglom

US healthcare software specialist Craneware (CRW) announced a trading update for the six months to the year-end in which it notes that it expects results to be 'in line with expectations'.

The AIM-quoted venture reported that it was expecting sales to have grown 24% (2009: $13.3m) with EBITDA to be 35% higher than the same period last year (2009: $3.3m).

The West-Lothian-based company, which has offices in Atlanta and Arizona employs over 150 staff and develops a range of software for the US healthcare market such as the Patient Charge Estimator, technology for hospitals to estimate costs for patients, and the Chargemaster Toolkit, a means for hospitals to accurately assess claims.

Following the announcement chief executive officer Keith Neilson reflected that while the company operates at a time in which there is 'much uncertainty around the direction of healthcare reform in the US it provides a 'tangible value to its customers' and enthuses that it expects a 'successful outcome to the year'

Analysts at Evolution Securities held their forecasts following the announcement. Evolution is forecasting pre-tax profits of $9.2m (£5.7m) on turnover of $35.2m, with EPS of 25.4 cents (15.7p) and 32.4 cents pencilled in for 2011 and 2012, respectively.

Last recommended by Growth Company Investor at 400p, the shares have gained 44.7% and are currently trading at 579p. With Craneware trading on 37 times forward earnings they are certainly not a bargain. As a result we suggest now might be an appropriate time to take some profit, while retaining a significant chunk for further growth. Reduce.