A cyber attack and US drug-pricing disruption knock investor confidence despite steady profits and an unchanged dividend.
Shares in healthcare software group Craneware (AIM: CRW) slumped 18% in early trading on Monday after the company posted a flat year of revenue and warned that growth would remain subdued in the year ahead.
The sell-off came as Craneware guided next year's revenue to broadly match its $185m recurring revenue base, a marker well below current turnover, and confirmed it is reviewing costs to protect margins after growth stalled.
Craneware said revenue for the year to 30 June was little changed at $206.0m, though disciplined cost control helped adjusted EBITDA rise 3% to $67.1m and statutory pre-tax profit climb 7% to $25.8m. Annual recurring revenue was steady at $185m, cash generation held up, and the board maintained the total dividend at 32p.
The company blamed much of the growth stall on turmoil in the US '340B' drug discount programme, where regulatory uncertainty and stricter manufacturer requirements stopped software-identified savings opportunities converting into revenue, with some licence income deferred as a result. Craneware has launched new products to help hospitals adapt and expects the programme to turn into a tailwind in the second half of the coming financial year.
Adding to investor unease, Craneware disclosed a cyber security incident in July, after the year-end, in which attackers extracted some company data. It said customer services were unaffected and systems have since been independently verified as secure, but remediation work, including regulatory and customer notifications, will run across several financial periods, and the full cost cannot yet be quantified.
This report is based on Craneware’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Fab Lentz on Unsplash.
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