Federal funds to boost Craneware
Healthcare software company Craneware is hoping to take a share the $44 billion (£27bn) worth of federal funds being pumped into US hospital IT under President Barack Obama's American Recovery and Reinvestment Act stimulus programme.
Craneware, which is based in Edinburgh but whose clients are hospitals in the US, specialises in developing software that reduces over-billing and maximises revenues.
Simon Strong, an analyst with Evolution Securities, said in a note that a federal investigation into over-billing in Medicare, the American social insurance programme, would drive further interest in the Scottish firm. "The pressures US hospitals face plays directly into what the Craneware products offer," he said.
Strong added that the market has been slow for the past 18 months as the massive government stimulus is allocated, but that a number of firms in the sector are anticipating "large system sales materialising again once revenues from the American Recovery and Reinvestment Act begin to flow into the marketplace".
Last month Craneware said it would report a 34 per cent boost in revenues and a 30 per cent increase in ebitda ahead of its final results which will be reported on Tuesday.
Analysts have calculated that the Aim-listed firm will show full year revenues of £23.2m, while underlying profits will come in at £6m.
In its interim statement in July, the firm heralded two "substantial" sales deals to hospital groups in Florida. The firm added that it had £64m in new contracts coming in over the next three years, despite pressure facing US hospital budgets.
In December, Craneware splashed out about £5.5m to snap up US rival ClaimTrust.
Chief executive Keith Neilson said he expects the number of employees globally to double to around 440 over the next three years, while Scottish-based staff will rise above 100.
