Analysts at Panmure Liberum made no “material forecast changes today” for Craneware but expect to do so by the time the company publishes its interim results for the current year.
Shares in Craneware closed up nearly 4% at 2,360p.
The company’s progress appears to vindicate the decision by its board to dismiss a takeover approach in June that valued the business at around £940m. The approach from US-based Bain Capital, which would have been worth £26.50 per share, was thrown out by bosses at the Scottish firm, declaring that it “fundamentally undervalues Craneware and its prospects”.
Craneware reported today that revenue increased by 9% to $205.7m, with annual recurring revenue up 7% to $184m. Growth was helped by customer retention in excess of 90%.
And the company signalled that trading in the current year has started well, giving it confidence of “continued growth acceleration” this year.
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The results came shortly after Craneware announced it had renewed its $100m revolving credit facility with a consortium of major banks on improved terms and raised the prospect of returning to the acquisition trail.
Craneware currently employs around 200 people, largely product developers and engineers, in the UK, as well as a further 600 in the US following its acquisition of Florida-based Sentry in 2021.
Analysts Harvey Robison and Andrew Ripper at Panmure Liberum said: “At the recent trading update in July Craneware beat estimates and increased expectations going forward, leading to upgrades across the forecast period. Today’s interims confirm those numbers. ARR growth has accelerated to 7%, NRR is healthy at 107%.
“Craneware remains a top pick within our growth plus margin framework. We make no material forecast changes today, but we do expect further upgrades to forecasts, probably around the half year update. Of note the company recently rejected an approach by Bain Capital at 2,650p. We retain a buy rating and a target of 2,850p.”
Craneware chief executive Keith Neilson said: “FY25 was a proud milestone, not just due to the strength of the financial performance, but for what that growth represents: the tireless efforts by our team in the service of our hospital customers and the communities they serve.
“The year has seen us deliver on our commitment to increase our growth rate, while maintaining strong profit margins, reducing bank debt, increasing our dividend and providing an admirable return on our customers’ investment in the group’s software.
“We continue to invest in R&D (research and development) to strengthen our product set, leveraging our proprietary data assets to expand our offerings, launch new AI (artificial intelligence) enabled applications and integrate third-party solutions onto the Trisus platform. Meanwhile, our partnership with Microsoft is proving a success, accelerating sales cycles and driving further innovation.
“Trading in the current year has started well, and with high customer retention rates, market leading offerings, specialist healthcare expertise and a significant proprietary data set, we have strong foundation on which to build. The growth in both ARR and NRR in the year demonstrates the strength of our annuity SaaS (software as a service) business model, backed by multi-year contracts, providing a basis for growth acceleration in the year to come, and we look to the future with confidence.”
The Craneware board recommended a final dividend of 18.5p per share, giving a total dividend for the year of 32p per share, up 10% on last year.