Sep 20, 2022

09/20/2022 | 10:00am EDT Message : Final Results growth 20 September 2022 - Craneware (AIM: CRW.L), the market leader in Value Cycle software solutions for the US healthcare market, announces its audited results for the year ended 30 June 2022. Financial Highlights (US dollars) Adjusted EBITDA1 increased 91% to $51.8m (FY21: $27.1m) Statutory Profit before tax $13.1m (FY21: $13.2m) reflecting increased operating profit offset by amortisation of acquired intangibles and bank interest payments resulting from the Sentry Data Systems, Inc. ("Sentry") acquisition Basic adjusted EPS1 increased 29% to 89.0 cents (FY21: 69.0 cents) and adjusted diluted EPS increased to 88.1 cents (FY21: 68.1 cents) Basic EPS 26.8 cents (FY21: 48.1 cents) and diluted EPS 26.5 cents (FY21: 47.5 cents) Annual Recurring Revenue2 increased by 164% to $170.3m (FY21 $64.5m) Robust operating cash conversion1 at 80% of Adjusted EBITDA (FY21: 99%) reflecting different cash generation profiles of acquired business Operating cash reserves (excluding restricted cash) at year-end of $47.2m (FY21: $48.3m) and Net Debt of $64.4m (FY21: $Nil) Proposed final dividend of 15.5p per share (18.80 cents) (FY21: 15.5p, 21.47 cents) giving a total dividend for the year of 28p per share (33.96 cents) (FY21: 27.5p, 38.10 cents) up 2% Operational Highlights Sentry and Agilum businesses successfully acquired and integrated during the year, providing considerably increased scale, offering, team and market opportunity The enlarged business has successfully rebranded to The Craneware Group3 Synergies realised have delivered combined target +30% Adjusted EBITDA1 margin ahead of schedule Initial cross-sales achieved and pipeline of opportunities is building 80% of ARR now from the Cloud, demonstrating successful execution of cloud strategy Trisus Chargemaster launched and vast majority of customers expected to have moved to the Trisus platform by end of current calendar year Continued investment in R&D and innovation to capitalise on growing market opportunity Outlook Ongoing, long-term transition to value-based care provides basis for sustainable future growth Whilst cognisant of ongoing macro-economic challenges that are faced by our end customers, the Board remains confident in the continued strong performance of the enlarged Group Certain financial measures are not determined under IFRS and are alternative performance measures as described in Note 14. Annual Recurring Revenue ("ARR") includes the annual value of licence and transaction revenues as at 30 June 2022 that are subject to underlying contracts. When we refer to 'Craneware', or 'The Craneware Group' or 'Group' we mean the group of companies having Craneware plc as its parent and therefore these words are used interchangeably. Keith Neilson, CEO of Craneware plc commented: "We are pleased to be reporting such positive results, which clearly demonstrate the increased scale of the enlarged Craneware Group and the breadth of our future opportunity. The addition of Sentry, which was completed and integrated during the fiscal year, represents a significant milestone for Craneware. Whilst we remain cognisant of the ongoing challenges faced by our customers and partners, we are proud of the manner in which the Group has dealt with the challenging backdrop during the year. A focus for the year was to integrate our widened team and this was achieved with great success. Now, with our expanded and reorganised team we are confident we will be able to serve the considerable market need within the US healthcare space through the next stage of our evolution. We anticipate accelerated levels of sales moving forward, delivering our next phase of growth. We have a robust balance sheet, high recurring revenues and with our high levels of customer retention, we look to further increase shareholder value." For further information, please contact: Craneware plc 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 Chair's Statement I am pleased to report on a year of significant strategic progress, in which the acquisitions of US-based Sentry Data Systems, Inc. ("Sentry") and Agilum Healthcare Intelligence, Inc. ("Agilum") (collectively referred to as the acquisition of Sentry), were successfully completed, considerably increasing the scale of The Craneware Group, enhancing our pharmacy offering and cementing Craneware's position as a leading provider of Value Cycle solutions to the US healthcare market. The combination of the three organisations paves the way for long-term sustained growth, as COVID-19 related impediments dissipate, and the Group unlocks the significant opportunities of our extended product suite. With the transition of the Craneware offerings to the Cloud, which remains on track to complete in the current calendar year, and 80% of ARR now derived from Cloud based solutions, we are confident the building blocks are in place for our ongoing success. Financials demonstrate increased scale of the Group The increased scale of The Craneware Group can be seen in the financial performance achieved this year. Revenues increased 119% in the year to $165.5m with an adjusted EBITDA increase of 91% to $51.8m, achieving the combined Group adjusted EBITDA margin target of 30% ahead of schedule. Software revenue and customer retention continues to be robust across the Group's offerings, as demonstrated by the growth in underlying ARR to $170.3m (30 June 2021: $64.5m). As previously reported, professional services revenues continue to be affected by the impact of the COVID pandemic on hospital workforce and operations. We are confident we will see professional services revenues return to pre-COVID levels once hospital staffing pressures ease. As at 30 June 2022, the Group had strong operating cash reserves of $47.2m (30 June 2021: $48.3m) and net debt of $64.4m (30 June 2021: $nil) representing circa 1.2 times reported adjusted EBITDA. This balance sheet strength, combined with our high levels of ARR, standing at $170.3m at year end, and the potential for a return to pre-pandemic levels of professional services revenue, leaves the Group well positioned for FY23 and beyond. Investment in innovation provides increased addressable opportunity With a customer base representing approximately 40% of registered US hospitals, including more than 12,000 US hospitals, health systems, clinics and affiliated retail pharmacies, supported by access to over 20 years of contextualised healthcare data, we have an enviable position within the US healthcare industry. Our investment in innovation and M&A strategy provide us with a growing solution set to provide further value to our customers. Following two years of intense pressure on our customers and healthcare professionals, they are more motivated than ever to implement strategic and long-term planning. Our Trisus platform is specifically designed to help them achieve this. While we may see fluctuations in our professional services revenue in any individual reporting period, our largely recurring revenue business model provides us with the revenue visibility to continue to invest in our people and offering, to capitalise on the significant opportunity. Making a positive contribution to society Our purpose is to transform the business of healthcare through the profound impact our solutions deliver, enabling our customers to deliver quality care to their communities. The tangible positive impact our solutions can make on the lives of others continues to be a great motivator for our talented team. The Craneware Group has always had a strong commitment to social responsibility and community engagement, which has been enhanced by the integration of our 340B offerings and colleagues. We have been delighted to welcome the Sentry and Agilum teams into The Craneware Group as well as additional new colleagues across the Group, on behalf of the Board, I would like to thank all the enlarged team for their continued passion and commitment. We detail more of the impact the Group makes, within the communities we serve, in our ESG Statement within the Annual Report. We were pleased to welcome Issy Urquhart, the Group Chief People Officer to the Craneware plc Board in April this year. Issy has been central in the successful integration of the Sentry team into The Craneware Group and the appointment of a leader with her skillset reflects both the importance the Board places on creating the right environment for our people to thrive and the increased scale of The Craneware Group. Positive Outlook The strength of the newly enlarged Craneware Group, our high levels of Annual Recurring Revenue, the breadth of solutions we can provide and the scale of data flowing through our platform are the solid foundations for our future sustained growth. Building on these foundations, whilst remaining cognisant of the challenges our customers and partners continue to face, the Board remains confident in Craneware's ability to address the expanded market opportunity presented. Will Whitehorn