TIDMCRW
RNS Number : 4337H
Craneware plc
22 February 2010
Craneware plc
("Craneware" or the "Company")
Half Yearly Report
22 February 2010 - Craneware plc (AIM: CRW.L), the leader in automated revenue
integrity solutions for the US healthcare market, is pleased to announce its
half year results for the six months ended 31 December 2009.
Financial Highlights H1 2010 (all figures in US dollars)
· Total of $25.0m of contracts signed in the half (H109: $21.8)
o 25% increase in revenues to $13.3m (H109: $10.6m)
o Future revenues under contract increasing to $71.8m (FY09: $60.1m).
· EBITDA1 increased 36% to $3.4m (H109: $2.5m).
· EBITDA1 margin increased to 26% (H109: 24%).
· Profit before taxation increased by 28% to $3.3m (H109: $2.6m).
· Basic EPS increased by 18% to $0.092 (H109: $0.078).
· Interim dividend of 4.7 pence per share (FY09 Interim dividend 1.8p; FY09
Total dividend 4.7p), total dividend for FY10 expected to be in line with stated
progressive dividend policy.
1. EBITDA refers to earnings before interest, tax, depreciation, amortisation
and share based payments
Operational Highlights H1 2010
· Launch and first sales of fifth product, Supplies ChargeLink(TM).
· Product attachment rate increased to 1.5 (FY09: 1.4).
· Signed reseller agreement with McKesson and secured first sales.
· New multi-year contract signed with North Shore-LIJ Health System, the
largest integrated healthcare system in New York State.
Keith Neilson, CEO of Craneware commented:
"We have been pleased with our strong performance in the first half of this
year, which has seen the broadening of our product set, the increase of our
customer base and the strengthening of our market position.
"Legislative and fiscal pressures are continuing to focus our customers on
revenue integrity, a niche of the US IT healthcare market, of which we are at
the forefront. These market dynamics combined with the quality of our software
and our focus on customer support means we have secured another record half of
sales, the main benefit of which will be seen in future years.
"With our sixth product due to launch this calendar year and our ongoing focus
on sales execution, we are confident in our ability to achieve significant
revenue and earnings growth and we continue to look to the future with
confidence."
For further information, please contact:
+----------------+----------------+----------------+
| Craneware plc | KBC Peel Hunt | ICIS |
| | | |
+----------------+----------------+----------------+
| +44 (0)1506 | +44 (0)20 7418 | +44 (0)20 7651 |
| 407 666 | 8900 | 8688 |
+----------------+----------------+----------------+
| Keith Neilson, | Jonathan | Caroline |
| CEO | Marren | Evans-Jones |
+----------------+----------------+----------------+
| Craig Preston, | Richard | Fiona Conroy |
| CFO | Kauffer | |
+----------------+----------------+----------------+
| | Dan Webster | |
+----------------+----------------+----------------+
About Craneware
Craneware (AIM: CRW.L) is the leader in automated revenue integrity solutions
that improve financial performance for healthcare organisations. Craneware's
market-driven, SaaS solutions help hospitals and other healthcare providers more
effectively price, charge and code for services and supplies associated with
patient care. This optimises reimbursement, increases operational efficiency and
minimises compliance risk. By partnering with Craneware, clients achieve the
visibility required to identify, address and prevent revenue leakage. To learn
more, visit craneware.com.
Chairman's Statement
Craneware has delivered another strong six months of growth and profitability,
increasing revenues by 25% to $13.3m and EBITDA1 by 36% to $3.4m. Importantly,
our new products continue to gain traction in the market and we have seen the
average product attachment rate increase from 1.4 at 30 June 2009 to 1.5 in the
current half.
With the US healthcare market facing increasing levels of legislation and
growing fiscal pressures there are compelling external factors adding further to
Craneware's long-term growth potential. As one of the most highly respected
software providers to the US healthcare industry, Craneware occupies a central
position in the emerging industry segment of Revenue Integrity. Craneware's move
to focus its product ranges into this new market segment is giving clarity to
its product positioning and strengthening its marketing, as evidenced by record
sales this half.
The Board believes Craneware has an extending market opportunity ahead of it. Of
the 5,815 hospitals in the U.S, over half still have no automated chargemaster
management solution, the area in which Craneware is an established market
leader, while the new product families are in markets with low penetration.
Building on recent years' product launches, this half saw the launch of Supplies
ChargeLink, a new product in our Supply Management family. We believe the
potential market for this product to be significant, with more than half of US
hospitals believing they are not fully reimbursed for their supplies and over
three-quarters having no automated process to attempt to do so. The first
contracts have been secured for the new product following the launch in December
2009 and extensive marketing is currently on-going. New product momentum will
continue through 2010, which will see the launch of our sixth product; a
solution within our Strategic Pricing family.
In tandem with our focus on direct sales and product development, is our channel
partnership strategy. The partnerships Craneware has in place, such as the
reseller agreement with McKesson are augmenting the Company's own sales team and
extending Craneware's market reach. This half saw the first sales of the
Company's products with McKesson's systems.
In conjunction with the growth plans described above, the Board continues to
assess potential acquisition opportunities in line with our stated M&A policy.
As always, the commitment of the entire Craneware team to customer service is
the foundation on which the Company's success is built and I would like to thank
our employees for their tireless efforts and our customers for their tremendous
loyalty and support.
The Board believes Craneware is extremely well-positioned in a high growth
market and therefore continues to view the future with confidence.
George Elliott, Chairman
19 February 2010
Operational Review
Introduction
Craneware's strong performance in the half has resulted from a continued focus
on sales execution supported by increased marketing initiatives. We continue to
invest considerably in our product set, the benefits of which will flow through
in future years and the half saw the successful launch in December 2009 of our
fifth product, Supplies ChargeLink. Market dynamics continue to work in our
favour and we believe our market opportunity to be expanding.
Market Developments: Increased regulation and industry reform continue to drive
growth
The US healthcare system continues to undergo unprecedented levels of change and
public scrutiny, which combined with the global economic downturn, means
healthcare organisations are experiencing extraordinary fiscal and legislative
pressures. These factors have resulted in healthcare management teams increasing
their focus on making the process and information technology changes that will
deliver more value to their organisations for the services they provide.
This focus is expected to contribute to high industry growth rates. The US
Healthcare IT market, boosted by the American Recovery and Reinvestment Act
(ARRA) of 2009 is the largest of the global healthcare IT markets, with double
digit growth rates expected for the next seven years.
Key industry trends continue to drive demand for Craneware's solutions. Central
to these trends are proposed healthcare reforms which are expected to introduce
increased regulation in areas such as insurance coverage, reimbursement, and the
industry competitive environment. These areas combined with previously
introduced legislation including healthcare compliance audits, have resulted in
an industry acutely focused on information technology to help manage reform.
Sales and Marketing: Focused on Revenue Integrity
During the first half of this year Craneware focused its products within the
newly defined industry segment of Revenue Integrity, an area which is growing in
industry recognition. Several PR and marketing initiatives are currently ongoing
to reinforce Craneware's position as the industry leader within this market.
We continue to strengthen our sales team and processes, formalising our client
sales management teams. A new Executive Vice President of Sales has been
appointed and additional members have been added to the sales team.
Hires have also been made within the business development and channel partner
team, reflecting our focus in this area following the early success of the
Premier, Amerinet and McKesson channel partner agreements.
Product Development: Expansion of the product set
Building on feedback from our customers we have continued to make enhancements
to our current products, increasing areas such as functionality and
accessibility. One key area of development has been the integration of our
products with McKesson's following the signing of a reseller agreement with the
company in September 2009. This work is continuing on schedule and
implementation has already begun in the first hospitals to purchase the combined
system.
The half concluded with the successful launch and the first customer win of a
new product, Supplies ChargeLink(TM), part of our Supply Management family of
products. This software solution helps hospitals better manage and optimise
reimbursement for chargeable supplies, automating the manual processes that most
hospitals use to align their supply chain, charge capture and billing
procedures. The Directors believe the potential market for this new product to
be significant, with a recent Healthcare Financial Management Association
InstaPoll of members finding that more than 50 percent of U.S. hospitals believe
they are reimbursed for less than half of their chargeable supplies. While
another report completed by Porter Research found 75 percent of U.S. hospitals
currently do not use any automation tools to compare their supply purchase
histories with actual billing for supplies.
First to purchase the new software, made generally available in December 2009,
was Washington County Regional Medical Center, a 116-bed, non-profit
organisation serving east Central Georgia since 1960.
Launch of Value-based Pricing Analysis Product
Development work on our forthcoming, Value-based Pricing Analysis product has
progressed well with launch planned for the last quarter of the calendar year.
This will be the fourth new product to be launched since our IPO and will bring
our total number of products to six. Sitting within our Strategic Pricing family
of products, this product will enable hospitals to set appropriate and
defensible pricing policies that optimise reimbursement, increase operational
efficiency, and minimise compliance risk. The product is anticipated to
contribute to revenue by the end of calendar 2010.
Number 1 in KLAS
During the year, the Company's flagship product, Chargemaster Toolkit , was once
again awarded the number one position in its category by the prestigious
industry research house KLAS in the U.S., reaffirming Craneware's market leading
position for the fourth year in a row.
New Contract Win
We are pleased to announce today a new multi-year contract with North Shore-LIJ
Health System, the largest integrated healthcare system in New York State and
winner of the 2010 NQF National Quality Healthcare Award. Further information
regarding the contract is contained in a separate announcement released this
morning. We are delighted to have secured this prestigious organisation in a
competitive situation, maintaining our momentum as we move into the second half
of the year.
Financial Review
Following on from our trading update on 18 January 2010, we are pleased to
report that revenues in the period have increased 25% to $13.3m (H109:$10.6m),
which has resulted in a 36% increase to $3.4m in our reported EBITDA1 (H109:
$2.5m).
The increased investment made in sales and marketing during FY09 and continued
into this period has resulted in a further increase in the total value of
contracts signed during the period. The total value, including renewal activity
was $25.0m, a 15% increase over the corresponding period last year (H109:
$21.8m) which was our previous record.
With our annuity revenue recognition model the majority of the benefit derived
from these contracts has been to increase our visibility over future revenues,
which has now increased to $71.8m. Of this future revenue under contract we have
already invoiced $13.2m which is recorded as deferred income in the Balance
Sheet. The remaining $58.6m will be invoiced in future periods.
Continued control over costs throughout the Company has resulted in net
operating expenses increasing by only $1.2m to $8.9m (H109: $7.7m) allowing us
to increase our EBITDA1 margins to 26% (H109: 24%).
During the period, we have made payments in respect of taxation of $0.9m (H109:
$0.1m) due to the increased tax charge on our increasing profits and the timing
of our advance payments on account. We have also paid out the FY09 final
dividend to shareholders of $1.2m (H109: $1.2m).
Even after taking account of these payments we have increased the cash position
of the Company to $26.9m (H109: $20.8m) from $26.2m at 30 June 2009.
With the reporting currency (and cash reserves) of the Company being in US
Dollars, we have seen a small benefit from the strengthening Dollar during the
period on our UK purchases including the salary costs of our UK based employees.
The average conversion rate for the Company during the reporting period was
$1.64/GBP1 as compared to an average conversion rate in the corresponding period
last year of $1.73/GBP1.
Dividend
The Board has resolved to pay an interim dividend of 4.7p per ordinary share of
the Company (FY09 Interim 1.8p: Total Dividend FY09 4.7p) on 1 April 2010 to
those shareholders on the register as at 5 March 2010. The Company intends to
propose a final dividend, subject to approval at the Annual General Meeting,
such that the total dividend for the FY10 is in line with its stated
"progressive" dividend policy. The ex-dividend date is 3 March 2010.
Outlook
We have been pleased with our strong performance in the first half of this year,
which has seen the broadening of our product set, the increase of our customer
base and the strengthening of our market position. Legislative and fiscal
pressures are continuing to focus our customers on revenue integrity, a niche of
the US IT healthcare market, of which we are at the forefront. These market
dynamics combined with the quality of our software and our focus on customer
support means we have secured another record half of sales, the main benefit of
which will be seen in future years. With our sixth new product due to launch
this calendar year and our ongoing focus on sales execution, we are confident in
our ability to achieve significant revenue and earnings growth and we continue
to look to the future with confidence.
Keith Neilson, Chief Executive Officer
Craig Preston, Chief Financial Officer
19 February 2010
+---------------------------------------+-------+---------+-------+--+----------+
| Craneware PLC | | | | |
| Interim Results FY10 | | | | |
| Consolidated Income Statement | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | H1 | H1 | FY 2009 |
| | | 2010 | 2009 | |
+---------------------------------------+-------+---------+-------+-------------+
| | Notes | $'000 | $'000 | $'000 |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| Revenue | | 13,256 | 10,627 | 22,993 |
+---------------------------------------+-------+---------+----------+----------+
| Cost of sales | | (1,160) | (637) | (1,381) |
+---------------------------------------+-------+---------+----------+----------+
| Gross profit | | 12,096 | 9,990 | 21,612 |
+---------------------------------------+-------+---------+----------+----------+
| Net operating expenses | | (8,906) | (7,703) | (16,262) |
+---------------------------------------+-------+---------+----------+----------+
| Operating profit | | 3,190 | 2,287 | 5,350 |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| Analysed as: | | | | |
+---------------------------------------+-------+---------+----------+----------+
| Operating Profit before share based | | | | |
| payments, depreciation | | | | |
+---------------------------------------+-------+---------+----------+----------+
| and amortisation | | 3,417 | 2,511 | 5,812 |
+---------------------------------------+-------+---------+----------+----------+
| Share based payments | | (46) | (36) | (82) |
+---------------------------------------+-------+---------+----------+----------+
| Depreciation of plant and equipment | | (97) | (100) | (204) |
+---------------------------------------+-------+---------+----------+----------+
| Amortisation of intangible assets | | (84) | (88) | (176) |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| Finance income | | 110 | 285 | 520 |
+---------------------------------------+-------+---------+----------+----------+
| Profit before taxation | | 3,300 | 2,572 | 5,870 |
+---------------------------------------+-------+---------+----------+----------+
| Tax charge | | (965) | (616) | (1,422) |
+---------------------------------------+-------+---------+----------+----------+
| Profit for the period | | 2,335 | 1,956 | 4,448 |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| - Basic ($ per share) | 1a | 0.092 | 0.078 | 0.177 |
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| - Diluted ($ per share) | 1b | 0.089 | 0.074 | 0.170 |
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | |
+---------------------------------------+-------+---------+----------+----------+
| | | | | | |
+---------------------------------------+-------+---------+-------+--+----------+
+-----------------+---------+---------+----------+----------+---------+
| Craneware PLC |
+---------------------------------------------------------------------+
| Interim Results FY10 |
+---------------------------------------------------------------------+
| Consolidated Statement of Changes in Equity |
+---------------------------------------------------------------------+
| | Share | Share | Other | Retained | Total |
| | Capital | Premium | Reserves | Earnings | |
+-----------------+---------+---------+----------+----------+---------+
| | $'000 | $'000 | $'000 | $'000 | $'000 |
+-----------------+---------+---------+----------+----------+---------+
| At 1 July 2008 | 509 | 9,253 | 3,041 | 3,296 | 16,099 |
+-----------------+---------+---------+----------+----------+---------+
| Share-based | - | - | 36 | 45 | 81 |
| payments | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Retained Profit | - | - | - | 1,957 | 1,957 |
| for the period | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Dividend | - | - | - | (1,172) | (1,172) |
+-----------------+---------+---------+----------+----------+---------+
| | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| At 31 December | 509 | 9,253 | 3,077 | 4,126 | 16,965 |
| 2008 | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Share-based | - | - | 46 | (82) | (36) |
| payments | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Options | 3 | (3) | - | - | - |
| Exercised | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Retained Profit | - | - | - | 2,491 | 2,491 |
| for the period | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Dividend | - | - | - | (745) | (745) |
+-----------------+---------+---------+----------+----------+---------+
| | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| At June 2009 | 512 | 9,250 | 3,123 | 5,790 | 18,675 |
+-----------------+---------+---------+----------+----------+---------+
| | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Share-based | - | - | 46 | 436 | 482 |
| payments | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Retained Profit | - | - | - | 2,335 | 2,335 |
| for the period | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| Dividend | - | - | - | (1,220) | (1,220) |
+-----------------+---------+---------+----------+----------+---------+
| | | | | | |
+-----------------+---------+---------+----------+----------+---------+
| At 31 December | 512 | 9,250 | 3,169 | 7,341 | 20,272 |
| 2009 | | | | | |
+-----------------+---------+---------+----------+----------+---------+
+------------------------------------+--------+--------+--------+--------+
| Craneware PLC | | |
| Interim Results FY10 | | |
| Consolidated Balance Sheet as at 31 December | | |
| 2009 | | |
+------------------------------------------------------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| | | H1 | H1 | FY2009 |
| | | 2010 | 2009 | |
+------------------------------------+--------+--------+--------+--------+
| | Notes | $'000 | $'000 | $'000 |
+------------------------------------+--------+--------+--------+--------+
| ASSETS | | | | |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Non-Current Assets | | | | |
+------------------------------------+--------+--------+--------+--------+
| Plant and equipment | | 309 | 408 | 345 |
+------------------------------------+--------+--------+--------+--------+
| Intangible assets | | 1,475 | 989 | 1,206 |
+------------------------------------+--------+--------+--------+--------+
| Deferred Tax | | 1,223 | 1,086 | 718 |
+------------------------------------+--------+--------+--------+--------+
| Trade and other receivables | | 25 | 50 | 25 |
+------------------------------------+--------+--------+--------+--------+
| | | 3,032 | 2,533 | 2,294 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Current Assets | | | | |
+------------------------------------+--------+--------+--------+--------+
| Trade and other receivables | | 7,576 | 7,990 | 5,187 |
+------------------------------------+--------+--------+--------+--------+
| Cash and cash equivalents | | 26,917 | 20,818 | 26,169 |
+------------------------------------+--------+--------+--------+--------+
| | | 34,493 | 28,808 | 31,356 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Total Assets | | 37,525 | 31,341 | 33,650 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| EQUITY AND LIABILITIES | | | | |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Non-Current Liabilities | | | | |
+------------------------------------+--------+--------+--------+--------+
| Deferred income | | 11 | 126 | 124 |
+------------------------------------+--------+--------+--------+--------+
| | | 11 | 126 | 124 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Current Liabilities | | | | |
+------------------------------------+--------+--------+--------+--------+
| Deferred income | | 13,172 | 11,885 | 10,964 |
+------------------------------------+--------+--------+--------+--------+
| Trade and other payables | | 4,070 | 2,365 | 3,887 |
+------------------------------------+--------+--------+--------+--------+
| | | 17,242 | 14,250 | 14,851 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Total Liabilities | | 17,253 | 14,376 | 14,975 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Equity | | | | |
+------------------------------------+--------+--------+--------+--------+
| Called up share capital | 2 | 512 | 509 | 512 |
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Share premium account | | 9,250 | 9,253 | 9,250 |
+------------------------------------+--------+--------+--------+--------+
| Other reserves | | 3,169 | 3,077 | 3,123 |
+------------------------------------+--------+--------+--------+--------+
| Retained earnings | | 7,341 | 4,126 | 5,790 |
+------------------------------------+--------+--------+--------+--------+
| Total Equity | | 20,272 | 16,965 | 18,675 |
+------------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------------+--------+--------+--------+--------+
| Total Equity and Liabilities | | 37,525 | 31,341 | 33,650 |
+------------------------------------+--------+--------+--------+--------+
+-----------------------------------+-------+---------+---------+---------+
| Craneware PLC |
| Interim Results FY10 |
| Consolidated Cashflow Statement for the six months ended 31 |
| December 2009 |
+-------------------------------------------------------------------------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | H1 | H1 | FY |
| | | 2010 | 2009 | 2009 |
+-----------------------------------+-------+---------+---------+---------+
| | Notes | $'000 | $'000 | $'000 |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash flows from operating | | | | |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash generated from operations | 3 | 3,123 | 1,068 | 7,378 |
+-----------------------------------+-------+---------+---------+---------+
| Interest received | | 110 | 285 | 520 |
+-----------------------------------+-------+---------+---------+---------+
| Tax (paid) / refunded | | (851) | (98) | (202) |
+-----------------------------------+-------+---------+---------+---------+
| Net cash from operating | | 2,382 | 1,255 | 7,696 |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash flows from investing | | | | |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Purchase of plant and equipment | | (60) | (93) | (134) |
+-----------------------------------+-------+---------+---------+---------+
| Capitalised intangible assets | | (354) | (284) | (588) |
+-----------------------------------+-------+---------+---------+---------+
| Net cash used in investing | | (414) | (377) | (722) |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash flows from financing | | | | |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Dividends paid to company | | (1,220) | (1,172) | (1,917) |
| shareholders | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Net cash used in financing | | (1,220) | (1,172) | (1,917) |
| activities | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Net (decrease) / increase in cash | | 748 | (294) | 5,057 |
| and cash equivalents | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash and cash equivalents at the | | 26,169 | 21,112 | 21,112 |
| start of the period | | | | |
+-----------------------------------+-------+---------+---------+---------+
| | | | | |
+-----------------------------------+-------+---------+---------+---------+
| Cash and cash equivalents at the | | 26,917 | 20,818 | 26,169 |
| end of the period | | | | |
+-----------------------------------+-------+---------+---------+---------+
Craneware PLC
Interim Results FY10
Notes to the Financial Statements
+------------------------------------------+--------+--------+--------+
| 1. Earnings per Share | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| (a) Basic | | | |
+------------------------------------------+--------+--------+--------+
| | H1 | H1 | FY |
| | 2010 | 2009 | 2009 |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Profit attributable to equity holders of | 2,335 | 1,956 | 4,448 |
| the Company ($'000) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Weighted average number of ordinary | 25,298 | 25,123 | 25,187 |
| shares in issue (thousands) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Basic earnings per share ($ per share) | 0.092 | 0.078 | 0.177 |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| (b) Diluted | | | |
+------------------------------------------+--------+--------+--------+
| | H1 | H1 | FY |
| | 2010 | 2009 | 2009 |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Profit attributable to equity holders of | 2,335 | 1,956 | 4,448 |
| the Company ($'000) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Weighted average number of ordinary | 25,298 | 25,123 | 25,187 |
| shares in issue (thousands) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Adjustments for: - share options | 982 | 1,213 | 1,007 |
| (thousands) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Weighted average number of ordinary | 26,280 | 26,337 | 26,194 |
| shares for diluted earnings per share | | | |
| (thousands) | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| | | | |
+------------------------------------------+--------+--------+--------+
| Diluted earnings per share ($ per share) | 0.089 | 0.074 | 0.170 |
+------------------------------------------+--------+--------+--------+
+--------------------------+------------+-------+------------+-------+------------+-------+
| 2. Called up share | |
| capital | |
+--------------------------+--------------------------------------------------------------+
| | H1 2010 | H1 2009 | FY 2009 |
+--------------------------+--------------------+--------------------+--------------------+
| | Number | $'000 | Number | $'000 | Number | $'000 |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Authorised | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Equity share capital | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Ordinary shares of 1p | 50,000,000 | 1,014 | 50,000,000 | 1,014 | 50,000,000 | 1,014 |
| each | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Allotted called-up and | | | | | | |
| fully paid | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Equity share capital | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
| Ordinary shares of 1p | 25,297,750 | 512 | 25,143,850 | 509 | 25,297,750 | 512 |
| each | | | | | | |
+--------------------------+------------+-------+------------+-------+------------+-------+
+---------------------------------+---------+---------+-------+
| 3. Cash flow generated from operating activities | |
+-----------------------------------------------------+-------+
| Reconciliation of profit before tax to net cash | |
| inflow from operating activities | |
+-----------------------------------------------------+-------+
| | | | |
+---------------------------------+---------+---------+-------+
| Group | H1 | H1 | FY |
| | 2010 | 2009 | 2009 |
+---------------------------------+---------+---------+-------+
| | $'000 | $'000 | $'000 |
+---------------------------------+---------+---------+-------+
| Profit before tax | 3,300 | 2,573 | 5,870 |
+---------------------------------+---------+---------+-------+
| Finance income | (110) | (285) | (520) |
+---------------------------------+---------+---------+-------+
| Depreciation on plant and | 97 | 100 | 204 |
| equipment | | | |
+---------------------------------+---------+---------+-------+
| Amortisation on intangible | 84 | 88 | 176 |
| assets | | | |
+---------------------------------+---------+---------+-------+
| Share based payments | 46 | 36 | 82 |
+---------------------------------+---------+---------+-------+
| | | | |
+---------------------------------+---------+---------+-------+
| Movements in working capital: | | | |
+---------------------------------+---------+---------+-------+
| | | | |
+---------------------------------+---------+---------+-------+
| (Increase) / decrease in trade | (2,390) | (3,280) | (452) |
| and other receivables | | | |
+---------------------------------+---------+---------+-------+
| (Decrease) / increase in trade | 2,096 | 1,836 | 2,018 |
| and other payables | | | |
+---------------------------------+---------+---------+-------+
| Cash generated from operations | 3,123 | 1,068 | 7,378 |
+---------------------------------+---------+---------+-------+
4. 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 2009. Those
accounts, with an unqualified audit report, have been delivered to the Registrar
of Companies.
5. Segmental Information
The Directors consider that the Group operates in 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.
Significant Accounting Policies
The significant accounting policies adopted in the preparation of these
statements are set out below.
6. Reporting Currency
The Directors consider that as the Group's revenues are primarily denominated in
US dollars the principal functional currency is the US dollar. The Group's
financial statements are therefore prepared in US dollars.
7. Currency Translation
Transactions denominated in foreign currencies are translated into US dollars at
the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities expressed in foreign currencies are translated into US dollars at
rates of exchange ruling at the balance sheet date ($1.6149/GBP1). Exchange
gains or losses arising upon subsequent settlement of the transactions and from
translation at the balance sheet date, are included within the related category
of expense where separately identifiable, or in general and administrative
expenses.
8. Revenue Recognition
The Group follows the principles of IAS 18, "Revenue Recognition", in
determining appropriate revenue recognition policies. In principle revenue is
recognised to the extent that it is probable that the economic benefits
associated with the transaction will flow into the Group.
Revenue comprises the value of software license sales, installation, training,
maintenance and support services, and consulting engagements. Revenue is
recognised when (i) persuasive evidence of an arrangement exists; (ii) delivery
has occurred or services have been rendered; (iii) the sales price has been
fixed and determinable; and (iv) collectability is reasonably assured.
For software arrangements with multiple elements, revenue is recognised
dependent on whether vendor-specific objective evidence ("VSOE") of fair value
exists for each of the elements. VSOE is determined by reference to sales to
external customers made on a stand-alone basis. Where there is no VSOE revenue
is recognised rateably over the full term of each contract.
Revenue from standard license products which are not modified to meet the
specific requirements of each customer is recognised when the risks and rewards
of ownership of the product are transferred to the customer.
Revenue from installation and training is recognised as services are provided,
and from consulting engagements when all obligations under the consulting
agreement have been fulfilled.
Software sub licensed to third parties is recognised in accordance with the
underlying contractual agreements. Where separate services are delivered,
revenue is recognised on delivery of the service.
The excess of amounts invoiced and future invoicing over revenue recognised, is
included in deferred revenue. If the amount of revenue recognised exceeds the
amounts invoiced the excess amount is included within accounts receivable.
9. Intangible Assets - Research and Development Expenditure
Expenditure associated with developing and maintaining the Group's software
products are recognised as incurred. Where, however, new product development
projects are technically feasible, production and sale is intended, a market
exists, expenditure can be measured reliably, and sufficient resources are
available to complete such projects, development expenditure is capitalised
until initial commercialisation of the product, and thereafter amortised on a
straight-line basis over its estimated useful life. Staff costs and specific
third party costs involved with the development of the software are included
within amounts capitalised.
10. Impairment Tests
The Group considers whether there is any indication that non-current assets are
impaired on an annual basis. If there is such an indication, the Group carries
out an impairment test by measuring the assets' recoverable amount, which is the
higher of the assets' fair value less costs to sell and their value in use. If
the recoverable amount is less than the carrying amount, an impairment loss is
recognised.
11. Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, deposits held with banks and
short term highly liquid investments. For the purpose of the cash flow
statement, cash and cash equivalents comprise of cash on hand, deposits held
with banks and short term high liquid investments.
12. Share-Based Payments and Taxation Implications
The Group issues equity-settled share-based payments to certain employees. In
accordance with IFRS 2, "Share-Based Payments" equity-settled share-based
payments are measured at fair value at the date of grant. Fair value is measured
by use of the Black-Scholes pricing model as amended to cater for share options
in issue where vesting is based on future valuation performance conditions. The
fair value determined at the date of grant of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on
the Group's estimate of the number of shares that will eventually vest.
The share-based payments charge is shown separately on the income statement and
is also included in 'Other reserves'.
In the UK and the US, the Group is entitled to a tax deduction for amounts
treated as compensation on exercise of certain employee share options under each
jurisdiction's tax rules. As explained under "Share-based payments", a
compensation expense is recorded in the Group's income statement over the period
from the grant date to the vesting date of the relevant options. As there is a
temporary difference between the accounting and tax bases a deferred tax asset
is recorded. The deferred tax asset arising is calculated by comparing the
estimated amount of tax deduction to be obtained in the future (based on the
Company's share price at the balance sheet date) with the cumulative amount of
the compensation expense recorded in the income statement. If the amount of
estimated future tax deduction exceeds the cumulative amount of the remuneration
expense at the statutory rate, the excess is recorded directly in equity against
retained earnings.
13. 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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