TIDMCRW
RNS Number : 5833Q
Craneware plc
01 March 2021
Craneware plc
("Craneware", "the Group" or the "Company")
Interim Results
1 March 2021 - Craneware (AIM: CRW.L), the market leader in
Value Cycle software solutions for the US healthcare market,
announces its unaudited results for the six months ended 31
December 2020 .
Financial Highlights (US dollars)
-- Revenue increased 6% to $38m (H1 2020: $35.9m)
-- Adjusted EBITDA(1) increased 5% to $13.3m (H1 2020: $12.7m)
-- Profit before tax increased 3% to $9.9m (H1 2020: $9.6m)
-- Adjusted basic EPS(2) increased 5% to 32.5 cents per share (H1 2020: 31.1 cents per share)
-- Cash position of $50.7m (H1 2020: $45.0m)
-- Interim dividend increased 4% to 12p per share (H1 2020: 11.5p per share)
-- Further investment in R&D and innovation of $11.6m (H1
2020: $10.3m), of which $4.5m capitalised (H1 2020: $4.0m), to take
advantage of the growing market opportunity
1. Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, share based payments and acquisition
and share transaction related costs.
2. Adjusted Earnings per share (EPS) calculations allow for the
tax adjusted acquisition costs and share related transactions
together with amortisation on acquired intangible assets
Operational Highlights
-- Continued operational and financial progress despite ongoing COVID-19 backdrop
-- New Sales* more than 30% ahead of strong comparable period in the prior year
-- Strong growth in Trisus (R) metrics:
o More than 500 hospitals now using the Trisus platform
o Trisus solutions accounted for c. 16% of New Sales (H1 2020:
10%)
o Over 90m anonymised aggregated patient encounters included
within data on the platform, an increase of 30% in the last three
months
-- Remaining core solutions, Chargemaster Toolkit and Pharmacy
ChargeLink, on track to be migrated to the Trisus platform within
the next twelve months
-- Strong customer retention rates above 90% with dollar value of renewals returned to c.100%
Outlook
-- Strong sales pipeline for the current financial year and beyond
-- As at end of December 2020, total visible revenues of $206.4m
for the three-year period to June 2023 (H1 2020 same three-year
period: $189.6m)
-- The Board is cognisant of the challenges presented by the
macro environment but remains confident in the continued positive
performance of the business
-- The Board's expectations for the full year ending 30 June 2021 remain unchanged
* New Sales refers to the total value of contracts signed in the
period with new customers or the sale of new products to existing
customers
Keith Neilson, CEO of Craneware plc commented ,
"The positive performance in the first half of the year provides
a strong foundation for future growth. We are making considerable
progress on our Trisus expansion strategy and seeing accelerated
adoption of this cloud-platform by our existing and new
customers.
"Managing the impact of the COVID-19 pandemic has clearly been
the top priority for all healthcare-related organisations over the
past year and will continue to be the case for many months to come,
providing front-line care while adjusting to new methods of
healthcare delivery and ensuring their financial operations can
respond . Our customers continue to take steps to create further
resilience across their financial operations and we are committed
to providing them with the tools and insight to do so.
"The first half's positive sales performance has continued with
ongoing pipeline growth, a growing Trisus customer base, expanding
offering and clear market need. While cognisant of the challenges
presented by the macro environment, we are confident in the
continued positive performance of the business and accelerated
growth rates moving forward."
For further information, please contact:
Craneware plc +44 (0)131 550 3100
Keith Neilson, CEO
Craig Preston, CFO
Alma (Financial PR) +44 (0)20 3405 0212
Caroline Forde, Robyn Fisher, Helena Bogle, craneware@almapr.co.uk
Joe Pederzolli
Peel Hunt (NOMAD and Joint Broker) +44 (0)20 7418 8900
Dan Webster, George Sellar, Andrew Clark
Investec Bank PLC(Joint Broker) +44 (0)20 7597 5970
Patrick Robb, Henry Reast, Sebastian Lawrence
Berenberg(Joint Broker ) +44 (0)20 3207 7800
Mark Whitmore, James White, Alix Mecklenburg-Solodkoff
About Craneware
Craneware (AIM: CRW.L), develops and provides financial and
operational optimisation software & analytics. Craneware is the
leader in automated value cycle solutions, collaborates with U.S.
healthcare providers to plan, execute and monitor value-based
economic performance. Our passion and purpose is to impact
healthcare profoundly by improving healthcare providers'
operational efficiency and margin, so they can continue investing
in providing quality care for their communities.
Founded in 1999, Craneware is headquartered in Edinburgh,
Scotland with offices in Atlanta and Pittsburgh employing over 350
staff. Craneware's value cycle management suite includes charge
capture, strategic pricing, patient engagement, claims analytics,
revenue recovery and retention, and cost and margin intelligence
solutions.
Learn more at www.craneware.com
Chairman's Statement
The on-going professional, personal and emotional pressures
being exerted on our customers by the COVID-19 pandemic is changing
the way they deliver healthcare. Our teams have remained focused on
providing our customers with the data they need today, and the
tools they will need tomorrow, to ensure they have the financial
confidence to continue to provide the outstanding front-line care
being asked of them in this challenging environment. The Board and
I are grateful for the continued high levels of commitment and
endeavour shown by our teams and those of our customers.
With the majority of our teams continuing to work from home, and
all the personal challenges that the pandemic brings, it is
particularly pleasing to be in a position to report on a period of
continued strategic and financial progress.
Following several quarters of building sales momentum, Craneware
has delivered healthy levels of revenue and profit growth along
with continued expansion, both of the customer base for Trisus, our
next-generation cloud-based platform and its number of
applications. Clear progress has been made against each of the
Company's 'Three Growth Pillars' with the acceleration of customer
adoption of Trisus contributing significantly to this effort as
expected.
Revenue has increased 6% to $38.0m (H1 2020: $35.9m), driving
growth of 5% in adjusted EBITDA to $13.3m (H1 2020: $12.7m).
Encouragingly, New Sales are more than 30% ahead of the strong
comparable period in the prior year, with solid demand across our
applications, from both new and existing customers. Sales of Trisus
applications grew to approximately 16% of New Sales (H1 2020: 10%),
demonstrating the potential of these solutions to be catalysts for
increased growth rates in the future. Customer retention rates
remain high, at above 90% and the dollar value of renewal rate of
customers at the end of their multi-year contracts returning to
c.100%. Our three-year revenue visibility metric has increased 9%
to $206.4m at period end, providing us with the confidence to
continue to invest in the expansion of our offering, as we seek to
capitalise on our significant market opportunity.
The Group maintains healthy cash reserves of $50.7m (H1 2020:
$45m), after returning $5.3m to shareholders through dividends and
investing $11.6m in R&D (H1 2020: $10.3m). Capitalised R&D
at $4.5m represents the same percentage of total R&D spend (H1
2020: $4.0m). The Group delivered positive operating cash
conversion in the period of 100%.
As I assess the progress being made, it is clear to me that
Craneware has a clear, long-term growth opportunity ahead. With
almost a third of its customers taking advantage of the
increasingly powerful Trisus cloud-platform and expanding range of
applications, that opportunity is now coming more clearly into
focus. The positive progress we are seeing across our key metrics
provides the Board with confidence in the Group's ability to a
return to double-digit growth in the future.
The Board is cognisant of the challenges presented by the macro
environment but remains confident in the continued positive
performance of the business and our expectations for the full year
ending 30 June 2021 remain unchanged.
Will Whitehorn
Chairman
1 March 2021
Strategic Report
We are pleased to have delivered a good set of financial results
in the first six months of the year, with the growth in New Sales
and Trisus sales being particularly encouraging indicators of the
successes being achieved.
We have seen a considerable increase in the number of hospitals
using our next-generation cloud-based Trisus platform, resulting in
more than 500 hospitals now using the platform, contributing over
90m individual anonymised patient encounters available within it.
With each new hospital that joins the platform, and each new data
point recorded, the platform becomes more powerful, providing even
greater insight into the ways in which hospital management teams
can better manage and protect their financial margin. The mitigated
risks, efficiencies and returns on investment being delivered by
our applications will provide the confidence and continuity for our
customers to invest in the delivery of quality care to their
communities.
Our product innovation has continued at pace, and we are on
track for the migration to Trisus of our two remaining core
products, Chargemaster Toolkit and Pharmacy ChargeLink. We launched
a free-to-use application, Trisus Pricing Transparency, in the
period to help hospitals meet the CMS Pricing Transparency Final
Rule requirements which came into effect in January 2021. This has
been well-received across both existing and new customers,
encouraging accelerated migration to the Trisus platform and we
have continued the investment in further enhancements across our
range of applications.
This positive progress has been achieved against the backdrop of
COVID-19. Whilst as a business we continue to be relatively
insulated from the direct impacts of the pandemic, our customers
are on the front-line. Supporting them and the phenomenal work
their teams have done has been, and will continue to be, our top
priority through these times. Never has the need for accurate
financial data, insight and analytics been more important, and we
will continue to do all we can to ensure our customers have the
tools they need to maintain the financial health of their
organisations.
Market - the move to value-based care continues at pace
Managing the impact of the COVID-19 pandemic has clearly been
the top priority for all healthcare-related organisations over the
past year and will continue to be so for many months to come.
Operationally, healthcare providers have had to adjust to new
methods of healthcare delivery, while ensuring their financial
operations have the flexibility and agility to charge for those
services appropriately, highlighting the importance of usable
financial and operational data. Healthcare providers' requirements
for greater insight into cost of care, associated margins and the
value being derived is as high, if not higher, than ever. Against
that backdrop, the US healthcare market continues to transition
from a fee-for-service reimbursement model, towards value-based
care, aiming to redress the current imbalance in US healthcare
between spend and outcomes. Under value-based care, healthcare
providers, including hospitals and physicians, are paid based on
patient health outcomes. A hospital's ability to remain financially
secure in a value-based care system is dependent on the collection
of granular data and the use of insightful analytics to understand
the opportunity to deliver better value. This presents a large,
growing opportunity for the Group given Craneware's specialism in
helping hospitals better understand and manage revenue and cost
through data-driven solutions.
Our customers continue to take steps to create further
resilience across their financial operations. We are committed to
partnering with them by providing the platform, regulatory
information and data to enable them to do so. We believe that both
the Group and our customer base are strongly placed to deal with
the future impacts of the pandemic and for our products to be part
of the solution in terms of helping hospital preparedness.
With the new administration in the White House we are yet to see
any major changes to the political landscape with regards to US
healthcare. Both Republicans and Democrats have previously
expressed their desire for healthcare reform and the industry
widely anticipates that reform will remain a key agenda point
moving forward, with the drive to derive greater value from
healthcare sitting at its heart.
Growth Strategy - Innovation to profoundly impact US healthcare
operations which will drive demand and expand our addressable
market.
To date, our growth has been driven through increases in market
share and product set penetration (land and expand). In recent
years, we have invested in the development of the Trisus platform;
a sophisticated cloud data aggregation and intelligence platform
which will allow us to migrate our existing products to the cloud,
leverage our data assets to expand our offering, integrate third
party solutions to the platform and benefit from the scalability of
cloud-technology.
Our software solutions sit at the heart of our customers'
operations, tapping into the aggregated anonymised data held within
Trisus to provide greater insight and control to their financial
operations and thereby optimise their financial performance.
Three Growth Pillars
Our growth strategy has three fundamental growth pillars:
1. The transition of our customers to cloud-based versions of
our existing on-premise solutions, to act as a gateway to the
benefits and additional applications on the Trisus platform.
Currently, more than 500 customers, almost a third of our
customer base are utilising one or more of the Trisus applications,
with almost the entirety of the remainder connecting to the
platform via the Trisus Bridge - the first step for significant
migration to the platform from within our user base. This is
evidence that both our existing customer base and the wider
healthcare provider market have responded positively to the
technological evolution of the Craneware solution set.
We have started the migration of early adopter customers to the
cloud based Trisus versions of our two core product offerings:
Trisus Chargemaster, the replatformed version of our Chargemaster
Toolkit, and Trisus Pharmacy, a new product, which in phase one,
will sit alongside our on-premise Pharmacy ChargeLink, and
subsequently be expanded to include all Pharmacy ChargeLink
functionality. Customer feedback has been extremely positive,
identifying clear additional benefits the platform is delivering,
including ease of migration, use and deployment throughout large
scale implementations.
The full Trisus Chargemaster solution will be available by the
end of calendar 2021. All existing Chargemaster Toolkit customers
are now on a hybrid version, with their data synchronised to the
Trisus platform, and using a single Trisus sign on, meaning
migration to the full cloud version and all its additional
functionality with take only minutes once launched. All customers
who have signed new contracts for Chargemaster Toolkit in recent
periods have an understood migration plan to Trisus Chargemaster,
and recognise this as an easy entry to the Trisus platform.
Pharmacy ChargeLink customers are being offered the opportunity
to extend their products with the addition of the cloud based
Trisus Rx Financial Management, which is a precursor to further
applications in the Trisus Pharmacy suite, the complete replacement
for the on-premise solution. This will continue to be developed in
a modular fashion, allowing customers to select which mix of
applications best suits their needs as they become available.
We are continuing to develop the additional functionality of
these cloud offerings as we move towards general release.
2. To continue to enhance the capabilities of the platform
through the addition of new technology layers and applications,
developed through both internal R&D and selective M&A.
During the period we announced the availability of Trisus
Pricing Transparency ("TPT") to all US healthcare providers. This
no cost Trisus solution was developed to enable organisations not
only to meet CMS Pricing Transparency Final Rule requirements
(which came into effect in January 2021) but ensure that
organisational pricing data is most accurately represented for
patients on an ongoing basis on the new Craneware Patient portal
allowing individuals to "shop" for their healthcare needs.
TPT identifies which are a hospital provider's top 300
'shoppable services', being the bundles of care most frequently
delivered to patients, and recommends which services to publish
across a variety of payors, meeting and going beyond the needs of
the Act. These insights allow hospitals to make valuable business
decisions, inform the overall pricing strategy of the hospital,
monitor patient search behaviour, and rebalance pricing strategies
to ensure compliance and market competitiveness while addressing
the pressing problem of transparency of cost for potential
patients.
TPT adoption has accelerated migration of existing customers to
the Trisus platform and encouraged new users to benefit from the
power of the Trisus platform, which provides a clear pathway for
wider Trisus application uptake in the future by these new
customers.
Through the growth of our Trisus customer base, and the
interaction of their data with the Trisus platform, we have in
excess of 90m individual anonymised patient encounters recorded on
the platform, an increase of 30% in just three months. The greater
number of data points, the more powerful the analytics and insights
that can be provided to help hospitals in their financial
decision-making. These encounters include roughly one fifth of all
emergency room visits in the US during the last year and almost one
quarter of all hospital admissions.
We will continue to invest in expanding the capabilities of the
platform, developing additional applications and tools, to provide
further benefits to our customers. We are pleased to confirm that
the level of sales of Trisus applications has now exceeded sixty
percent (60%) of the amount of capitalised R&D spent on the
platform and Trisus applications development to date, already
underwriting the majority of the investment made.
M&A
While organic growth remains a priority, we continue to evaluate
the market and will continue to pursue strategically aligned
companies that will accelerate our growth strategy. This is
underpinned by four key acquisition criteria of which target
companies must fit into at least one, being:
1. the addition of data sets;
2. the extension of the customer base;
3. the expansion of expertise; and
4. the addition of applications suitable for the US hospital market.
In evaluating acquisition opportunities, the Board implements a
strong valuation discipline seeking to maintain its prudent
approach to preserving balance sheet strength and efficiency for
the long-term.
Targets that are profitable with recurring revenue models that
provide earnings accretion within the first 12 months of ownership
are prioritised.
3. To grow our customer footprint, through increasing the
attractiveness of our offering and acquiring non-overlapping
customers, which in turn provides further cross-sale
opportunities.
We are pleased with the sales activity during the half, which
saw New Sales >30% ahead of the same period in the prior year.
30% of these New Sales were to new customers, expanding our
customer footprint. Expansion Sales to existing customers
represented 70%, demonstrating Craneware's ability to continue to
cross sell further solutions. All sales have been driven by
mitigation of risk, efficiency of operations and compelling ROIs
for our customers.
Sales of Trisus products represented 16% of New Sales in the
period, with Trisus sales in the six months significantly ahead of
both of the previous two six month periods . We also saw our first
Trisus renewals in the period.
Customer retention has always been strong, and we continued to
see our customer retention rate remain high in the period above
90%, with renewals by dollar value at c.100%.
Financial Review
In our trading update released on 20 January 2021, we confirmed
that the group had secured New Sales at a significantly higher
level than in the first half of the prior year. Through our Annuity
SaaS business model (described below), the vast majority of the
revenue from these New Sales will be recognised in future periods.
We are pleased to confirm the positive sales performance in prior
periods has resulted in an increase in both revenue and adjusted
EBITDA in the period. For the six months to 31 December 2020,
revenues have increased 6% to $38.0m (H1 2020: $35.9m) and adjusted
EBITDA has increased 5% to $13.3m (H1 2020: $12.7m). Adjusted
earnings per share has increased 5% to 32.5 cents per share (H1
2020: 31.1 cents per share).
These positive results have been achieved despite the
macro-economic uncertainties created by the COVID 19 pandemic.
Whilst we are pleased to be able to report this financial success
in the period, we have never forgotten that our customers continue
to be on the front line. Supporting them and their teams, in the
work they have done and continue to do, remains our top priority
through these times.
As healthcare organisations look beyond the impact of the
pandemic, it is increasingly clear to all that there is a need for
accurate financial data, supporting analytics and the insights
those analytics can bring. We are committed to partnering with our
customers via the ongoing development of the Trisus platform and
the applications that sit upon it. To fully deliver on the
opportunity we have ahead of us and the impact we can make to our
customers' financial health, it is essential we continue to make
the right investments now.
As a result, we have further increased our investment in R&D
by 13% to $11.6m (H1 2020: $10.3m). Of this investment $4.5m, being
39%, relates to new product development and enhancements and as
such has been capitalised (H1 2020: $4.0m, 39%), the balancing
$7.1m (H1 2020: $6.3m) has been expensed as incurred. The amounts
we capitalise represent the cash reserves we have utilised in the
period, to invest in our future. This is an efficient and
cost-effective way to further build out our Value Cycle strategy.
We take great care to only capitalise projects that will bring
future economic benefit to the Group. One of the ways we ensure
this is to monitor the value of contracts sold for these new
products once launched against the costs that have been capitalised
to date. I am pleased to confirm, in regards to the total costs we
have capitalised in this and previous periods relating to our
Trisus developments (including applications that have yet to be
brought to market) we have sold contracts that already cover over
60% of this total.
We continue to maintain healthy cash reserves, which at the
period end were $50.7m (H1 2020: $45.0m). We continue to target
operating cash conversion of 100% of adjusted EBITDA to operating
cash over a 12-month period. This was exceeded in the 12 months
prior to 31 December 2020, delivering 100% cash conversion within
the six-month period under review. From our cash reserves, we have
returned $5.3m to our shareholders through dividends and made the
$11.6m investments in R&D detailed above.
The Group's Annuity SaaS business model and associated revenue
recognition policy is designed to focus on the long-term growth and
stability of the Group. The revenue element of new sales related to
software licenses, where performance obligations are met over time,
results in revenue being recognised over the period the license is
provided to the customer (which for a new hospital sale is an
average of over four years). In addition, other revenue generated
through new sales relates to consulting services and training which
are also satisfied over time as the service is provided or the
project is delivered.
We have previously identified that there are a number of
benefits to this revenue recognition model including high levels of
cash conversion and high levels of future years' revenue
visibility. To demonstrate the high levels of visible revenue
generated the Group reports its 'Three Year Visible Revenue KPI'.
This KPI demonstrates the underlying annuity revenue stream that
builds as a result of sales and these revenue recognition
policies.
Total visible revenue for the three-year period 1 July 2020 to
30 June 2023 has increased 9% to $206.4m from $189.6m for the same
three-year period as at 31 December 2019. Of this, $166.3m relates
to 'Revenue under Contract', $39.6m 'Renewal Revenue' and $0.5m of
'Other Recurring Revenue'. 'Revenue under Contract', relates to
revenues that are supported by ongoing underlying contracts.
'Renewal Revenue' relates to the amount of revenue which is
potentially available for renewal and will be recognised in that
fiscal year provided the underlying contracts are renewed. As we
sign the renewal contracts, the aggregated related revenue for the
new multi-year term moves from 'renewal revenues' to 'revenue under
contract'. The final element is 'Other Recurring Revenue', this
relates to revenue that is not subject to long term contracts,
which can be billable 'per transaction' or a set monthly amount and
is usually invoiced on a monthly basis, however it is reasonable to
expect it to be recurring in nature.
In producing this KPI, we show our 'Renewal Revenues' at 100% of
dollar value, in line with our long-term average renewal rate by
dollar value, which was c.100% in this period. We are introducing a
new customer retention rate KPI this period, consistent with other
SaaS based businesses, and report on Customer retention rates which
remained over 90% in the period.
The high levels of visible revenue provide additional certainty
in making our investment decisions and we continue to invest for
the future growth of the Group, whilst at all times ensuring the
efficiency of expenditures. This has contributed to our healthy
adjusted EBITDA margin, which for the period is 35% H1 2020: 35%.
The adjustments we make to both EBITDA and EPS are those normally
expected and include costs related to acquisition associated equity
funding that did not complete.
We continue to report the results (and hold the cash reserves)
of the Group in US Dollars, whilst having approximately twenty five
percent of our costs, mainly our UK employees and UK purchases,
denominated in Sterling. The average exchange rate for the Company
during the reporting period was $1.31/GBP1 which compares to
$1.23/GBP1 in the corresponding period last year.
Dividend
The Board has resolved to pay an increased interim dividend of
12p (16.32 cents) per ordinary share on 15 April 2021 to those
shareholders on the register as at 19 March 2021 (FY20 Interim
dividend 11.5p). The ex-dividend date is 18 March 2021.
The interim dividend of 12p per share is capable of being paid
in US dollars subject to a shareholder having registered to receive
their dividend in US dollars under the Company's Dividend Currency
Election, or who has registered to do so by the close of business
on 19 March 2021. The exact amount to be paid will be calculated by
reference to the exchange rate to be announced on 19 March 2021.
The interim dividend referred to above in US dollars of 16.32 cents
is given as an example only using the Balance Sheet date exchange
rate of $1.36/GBP1 and may differ from that finally announced.
Update to the AGM
Following our Annual General Meeting on 17 November 2020, we
announced that all resolutions were passed with an over 70%
majority, however there was one resolution, resolution 11, that had
received a number of votes against. As such, we committed to
consult with our shareholders to more fully understand the reasons
for these votes against and to carefully reflect on the feedback we
received.
We understand the voting in relation to resolution 11
(re-appointment of PricewaterhouseCoopers LLP as auditors) was
specifically in relation to the expectation that a competitive
audit tender for the external audit services takes place where the
existing auditors have been in role for a period of 10 years or
longer, in line with best corporate governance practice . Whilst
the Board and the Audit Committee has been satisfied with
PricewaterhouseCoopers' performance as external auditor, we have
concluded it is an appropriate time to review the market and
conduct a tender. It is our intent to conclude the tender process
in the current financial year. Depending on the success of the
tender and the proposed transition plan (if required), this may
result in the successful firm being in place for this year's audit,
the financial year ended 30 June 2021.
Outlook
The positive performance in the first half of the year provides
a strong foundation for future growth. We are making considerable
progress on our Trisus expansion strategy and seeing accelerated
adoption of the cloud-platform by our existing and new
customers.
Managing the impact of the COVID-19 pandemic has clearly been
the top priority for all healthcare-related organisations over the
past year and will continue to be for many months to come,
providing front-line care while adjusting to new methods of
healthcare delivery and ensuring their financial operations can
respond . Our customers continue to take steps to create further
resilience across their financial operations and we are committed
to providing them with the tools and insight to do so.
The first half's positive sales performance has continued with
ongoing pipeline growth, a growing Trisus customer base, expanding
offering and clear market need. While cognisant of the challenges
presented by the macro environment, we are confident in the
continued positive performance of the business and accelerated
growth rates moving forward.
Keith Neilson Craig Preston
Chief Executive Officer Chief Financial Officer
1 March 2021 1 March 2021
Craneware plc
Interim Results FY21
Consolidated Statement of Comprehensive Income
H1 2021 H1 2020 FY 2020
Notes $'000 $'000 $'000
----------------------------------------- ------- --------- --------- ---------
Revenue 38,009 35,866 71,492
Cost of sales (3,084) (2,043) (4,518)
--------- --------- ---------
Gross profit 34,925 33,823 66,974
Other income 9 - 9
Net operating expenses (24,960) (24,337) (47,777)
--------- --------- ---------
Operating profit 9,974 9,486 19,206
Analysed as:
Adjusted EBITDA(1) 13,344 12,687 25,189
Share-based payments (1,048) (1,070) (1,318)
Depreciation of property, plant
and equipment (732) (743) (1,489)
Exceptional aborted placing costs(2) (283) - -
Amortisation of intangible assets (1,307) (1,388) (3,176)
-------------------------------------------------- --------- --------- ---------
Finance income - 117 192
Finance expense (45) - (94)
--------- --------- ---------
Profit before taxation 9,929 9,603 19,304
Tax charge on profit on ordinary
activities (1,482) (1,629) (2,468)
--------- --------- ---------
Profit for the period attributable
to owners of the parent 8,447 7,974 16,836
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Currency Translation Reserve movement (25) (34) 26
--------- --------- ---------
Total items that may be reclassified
subsequently to profit or loss (25) (34) 26
-------------------------------------------------- --------- --------- ---------
Total comprehensive income attributable
to owners of the parent 8,422 7,940 16,862
-------------------------------------------------- --------- --------- ---------
(1) Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, exceptional items and share based
payments.
(2) Exceptional items relate to legal and professional fees
associated with an aborted placing.
Earnings per share for the period attributable to equity holders
- Basic ($ per share) 1a 0.315 0.297 0.628
- *Adjusted Basic ($ per share)(3) 1a 0.325 0.311 0.654
- Diluted ($ per share) 1b 0.311 0.293 0.619
- *Adjusted Diluted ($ per share)(3) 1b 0.321 0.307 0.644
----------------------------------------- ------- --------- --------- ---------
(3) Adjusted Earnings per share calculations allow for the tax
adjusted acquisition/ placing costs and share related transactions
(if applicable in the year) together with amortisation on acquired
intangible assets.
Craneware plc
Interim Results FY21
Consolidated Statement of Changes in Equity
Capital
Share Share Redemption Other Retained
Capital Premium Reserve Reserves Earnings Total
$'000 $'000 $'000 $'000 $'000 $'000
---------------------------- --------- --------- ------------ ---------- ---------- --------
At 1 July 2019 535 20,022 9 3,549 35,720 59,835
Adjustment on initial
application of IFRS 16 - - - - 931 931
Total comprehensive income
- profit for the period - - - - 7,974 7,974
Total other comprehensive
income - - - - (34) (34)
Transactions with owners
Share-based payments - - - 981 1,079 2,060
Impact of share options
exercised / lapsed 1 1,030 - - - 1,031
Dividend - - - - (5,311) (5,311)
---------------------------- --------- --------- ------------ ---------- ---------- --------
At 31 December 2019 536 21,052 9 4,530 40,359 66,486
---------------------------- --------- --------- ------------ ---------- ---------- --------
Tax adjustment on initial
application of IFRS 16 - - - - 139 139
Total comprehensive income
- profit for the period - - - - 8,862 8,862
Total other comprehensive
income - - - - 60 60
Transactions with owners
Company share movement
in employee benefit trust - - - - (1,255) (1,255)
Share-based payments - - - 195 (1,969) (1,774)
Impact of share options
and awards exercised
/ lapsed - 45 - (577) 175 (357)
Dividend - - - - (3,766) (3,766)
At 30 June 2020 536 21,097 9 4,148 42,605 68,395
---------------------------- --------- --------- ------------ ---------- ---------- --------
Total comprehensive income
- profit for the period - - - - 8,447 8,447
Total other comprehensive
income - - - - (25) (25)
Transactions with owners
Share-based payments - - - 1,003 - 1,003
Dividend - - - - (5,329) (5,329)
---------------------------- --------- --------- ------------ ---------- ---------- --------
At 31 December 2020 536 21,097 9 5,151 45,698 72,491
---------------------------- --------- --------- ------------ ---------- ---------- --------
Craneware plc
Interim Results FY21
Consolidated Balance Sheet as at 31 December 2020
H1 2021 H1 2020 FY2020
Notes $'000 $'000 $'000
------------------------------- ------- -------- -------- --------
ASSETS
Non-Current Assets
Property, plant and equipment 3,170 4,392 3,798
Intangible assets 40,069 33,237 36,783
Trade and other receivables 2 4,074 4,495 3,915
Deferred Tax 2,408 4,439 2,408
49,721 46,563 46,904
-------- -------- --------
Current Assets
Trade and other receivables 2 21,896 20,999 21,003
Cash and cash equivalents 50,721 44,973 47,851
72,617 65,972 68,854
-------- -------- --------
Total Assets 122,338 112,535 115,758
------------------------------- ------- -------- -------- --------
EQUITY AND LIABILITIES
Non-Current Liabilities
Lease liability > 1 year 1,602 2,573 2,017
1,602 2,573 2,017
-------- -------- --------
Current Liabilities
Deferred income 37,015 36,568 37,155
Current tax liabilities 2,203 137 797
Trade and other payables 3 9,027 6,771 7,394
48,245 43,476 45,346
-------- -------- --------
Total Liabilities 49,847 46,049 47,363
-------- -------- --------
Equity
Share capital 4 536 536 536
Share premium account 21,097 21,052 21,097
Capital redemption reserve 9 9 9
Other reserves 5,151 4,530 4,148
Retained earnings 45,698 40,359 42,605
Total Equity 72,491 66,486 68,395
-------- -------- --------
Total Equity and Liabilities 122,338 112,535 115,758
------------------------------- ------- -------- -------- --------
Craneware plc
Interim Results FY21
Consolidated Statement of Cash Flow for the six months ended 31
December 2020
H1 2021 H1 2020 FY 2020
Notes $'000 $'000 $'000
----------------------------------------- ------ -------- -------- ---------
Cash flows from operating activities
Cash generated from operations 5 13,371 8,978 23,134
Interest received 1 122 204
Tax paid (77) (2,689) (2,668)
----------------------------------------- ------ -------- -------- ---------
Net cash from operating activities 13,295 6,411 20,670
Cash flows from investing activities
Purchase of plant and equipment (104) (34) (187)
Capitalised intangible assets (4,612) (4,202) (9,522)
----------------------------------------- ------ -------- -------- ---------
Net cash used in investing activities (4,716) (4,236) (9,709)
Cash flows from financing activities
Dividends paid to company shareholders (5,329) (5,311) (9,077)
Proceeds from issuance of shares - 942 614
Company shares acquired by employee
benefit trust - - (1,255)
Leased property payments (380) (444) (1,003)
----------------------------------------- ------ -------- -------- ---------
Net cash used in financing activities (5,709) (4,813) (10,721)
Net (decrease)/increase in cash
and cash equivalents 2,870 (2,639) 240
Cash and cash equivalents at the
start of the period 47,851 47,611 47,611
Cash and cash equivalents at the
end of the period 50,721 44,973 47,851
----------------------------------------- ------ -------- -------- ---------
Craneware plc
Interim Results FY21
Notes to the Financial Statements
1. Earnings per Share
(a) Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
----------------------------------------------------------------------------
H1 2021 H1 2020 FY 2020
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 8,447 7,974 16,836
Weighted average number of ordinary
shares in issue (thousands) 26,827 26,827 26,796
Basic earnings per share ($ per share) 0.315 0.297 0.628
-------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 8,447 7,974 16,836
Adjustments(1) ($'000) 283 378 688
-------- -------- --------
Adjusted Profit attributable to equity
holders ($'000) 8,730 8,352 17,524
-------- -------- --------
Weighted average number of ordinary
shares in issue (thousands) 26,827 26,827 26,796
Adjusted Basic earnings per share ($
per share) 0.325 0.311 0.654
-------- -------- --------
(b) Diluted
For diluted earnings per share, the weighted average number
of ordinary shares calculated above is adjusted to assume
conversion of all dilutive potential ordinary shares. The
Group has one category of dilutive potential ordinary shares,
being those granted to Directors and employees under the share
option scheme.
----------------------------------------------------------------------------
H1 2021 H1 2020 FY 2020
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 8,447 7,974 16,836
Weighted average number of ordinary
shares in issue (thousands) 26,827 26,827 26,796
Adjustments for: - share options (thousands) 346 408 404
Weighted average number of ordinary
shares for diluted earnings per share
(thousands) 27,173 27,235 27,200
Diluted earnings per share ($ per share) 0.311 0.293 0.619
-------- -------- --------
H1 2021 H1 2020 FY 2020
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 8,447 7,974 16,836
Adjustments(1) ($'000) 283 378 688
Adjusted Profit attributable to equity
holders ($'000) 8,730 8,352 17,524
-------- -------- --------
Weighted average number of ordinary
shares in issue (thousands) 26,827 26,827 26,796
Adjustments for: - share options (thousands) 346 408 404
Weighted average number of ordinary
shares for diluted earnings per share
(thousands) 27,173 27,235 27,200
Adjusted Diluted earnings per share
($ per share) 0.321 0.307 0.644
-------- -------- --------
(1) Relate to aborted placing costs, share related activities
and amortisation of acquired intangibles if applicable in the
period. These adjustments are to focus on what the Group regards as
a more reliable indicator of underlying operating performance and
are consistent with other similar companies.
2. Trade and other receivables
H1 2021 H1 2020 FY 2020
$'000 $'000 $'000
----------------------------------------- -------- -------- --------
Trade Receivables 17,411 16,138 18,171
Less: provision for impairment of trade
receivables (2,190) (1,321) (1,775)
-------- -------- --------
Net trade receivables 15,211 14,817 16,396
Other Receivables 698 2,986 172
Prepayments and accrued income 3,641 845 2,055
Deferred Contract Costs 6,410 6,846 6,295
-------- -------- --------
25,970 25,494 24,918
Less non-current receivables: Deferred
Contract Costs (4,074) (4,495) (3,915)
-------- -------- --------
Trade and other receivables 21,896 20,999 21,003
-------- -------- --------
There is no material difference between the fair value of trade
and other receivables and the book value stated above. All amounts
included within trade and receivables are classified as financial
assets at amortised cost.
3. Trade and other payables
H1 2021 H1 2020 FY 2020
$'000 $'000 $'000
-------- -------- --------
Trade Payables 1,620 1,025 719
Lease creditor due < 1 year 1,066 900 946
Social Security and PAYE 1,903 509 973
Other Payables 71 155 49
Accruals 4,367 4,182 4,707
------ ------ ------
Trade and other payables 9,027 6,771 7,394
------ ------ ------
No derivatives have been entered into in the current reporting
period. No other assets or liabilities have been measured at fair
value. Trade and other payables are classified as financial
liabilities at amortised cost.
4. Called up share capital
H1 2021 H1 2020 FY 2020
Number $'000 Number $'000 Number $'000
---------------------------- ----------- ------ ----------- ------ ----------- ------
Authorised
Equity share capital
Ordinary shares of 1p
each 50,000,000 1,014 50,000,000 1,014 50,000,000 1,014
Allotted called-up and
fully paid
Equity share capital
Ordinary shares of 1p
each 26,826,539 536 26,826,539 536 26,826,539 536
5. Consolidated Cash Flow generated from operating
activities
Reconciliation of profit before taxation to
net cash inflow from operating activities:
H1 2021 H1 2020 FY 2020
$'000 $'000 $'000
------------------------------------- -------- -------- --------
Profit before taxation 9,929 9,603 19,304
Finance income - (117) (192)
Finance expense 45 50 94
Depreciation on plant and equipment 732 743 1,489
Amortisation of intangible assets 1,307 1,388 3,176
Share-based payments 1,048 1,070 1,318
Movements in working capital:
(Increase) in trade and other
receivables (1,051) (1,760) (1,183)
Increase/ (Decrease) in trade
and other payables 1,361 (1,999) (872)
Cash generated from operations 13,371 8,978 23,134
------------------------------------- -------- -------- --------
6. Basis of Preparation
The interim financial statements are unaudited and do not
constitute statutory accounts as defined in S435 of the Companies
Act 2006. These statements have been prepared applying accounting
policies that were applied in the preparation of the Group's
consolidated accounts for the year ended 30th June 2020 and the
changes noted below in section 8. Those accounts, with an
unqualified audit report, have been delivered to the Registrar of
Companies.
The interim financial statements have been prepared on a going
concern basis. The Group's activities and an overview of the
development of its products, services and the environment in which
it operates together with an update on the Group's financial
performance and position are set out in the Financial Review.
Despite the ongoing uncertainties and challenges caused by COVID-19
pandemic, the Group is profitable, cash generative and the half
year trading results are in line with expectations. An overview of
the impact of the COVID-19 pandemic on the Group in the period are
contained in the Strategic Report, and details were also contained
in the Group's Annual Report and Financial Statements for the year
ended 30 June 2020. The Board continues to carefully monitor the
impact of the COVID-19 pandemic on the operations of the Group. The
Viability Statement and the Board's Going Concern assessment were
also contained in the Annual Report for the year ended 30 June
2020.
The Directors, having made suitable enquiries and analysis of
the interim financial statements, including the consideration of:
net cash reserves; continued cash generation; and Annuity SaaS
business model; have determined that the Group has adequate
resources to continue in business for the foreseeable future and
that it is therefore appropriate to adopt the going concern basis
in preparing the interim financial statements.
7. Segmental Information
The Directors consider that the Group operates in predominantly
one business segment, being the creation of software sold entirely
to the US Healthcare Industry, and that there are therefore no
additional segmental disclosures to be made in these financial
statements.
8. Changes to Significant Accounting Policies
The accounting policies applied in these interim financial
statements are the same as those applied in the Group's
consolidated financial statements as at and for the year ended 30
June 2020.
9. Availability of announcement and Half Yearly Financial
Report
Copies of this announcement are available on the Company's
website, www.craneware.com . Copies of the Interim Report will be
posted to shareholders, downloadable from the Company's website and
available from the registered office of the Company shortly.
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