1、 Craneware plc|Annual Report&Financial Statements 2024 2 Trisus Power of One Final Results Chairs Statement Strategic Report:Operational and Financial Review Strategic Report:Key Performance Indicators Strategic Report:Principal Risks and Uncertainties Strategic Report:Environmental,Social and Gover
2、nance(ESG)Intro Strategic Report:Non-Financial and Sustainability Information Statement Strategic Report:Environmental,Social and Governance(ESG)Statement Strategic Report:Section 172(1)Statement Stakeholder Engagement Directors,Secretary and Advisors Subsidiaries Board of Directors Directors Report
3、 Corporate Governance Report Remuneration Committees Report Independent Auditors Report to the members of Craneware plc Consolidated Statement of Comprehensive Income Statements of Changes in Equity Consolidated Balance Sheet Company Balance Sheet Consolidated Statement of Cash Flows Company Stateme
4、nt of Cash Flows Notes to the Financial Statements 3-4 5 6-7 8-16 17-18 19-29 30 31-40 41-55 56-60 61-63 64 65 66-68 69-77 78-94 95-113 114-119 120 121-122 123 124 125 126 127-169 Table of Contents The Craneware Group continues to demonstrate its ability to innovate and meet the needs of its healthc
5、are customers,while retaining a strong financial foundation.-Chairs Statement Craneware plc|Annual Report&Financial Statements 2024 3 Trisus Power of One Value-based Margin and Productivity Charge Capture Pricing Integrity Chargemaster Completeness,Transparency&Revenue Assurance Rational&Sustainable
6、 Pricing Methodology Regulatory Awareness&Education Pricing Transparency&Market Visibility Consulting,Pricing,&CDM Services Payor Contract Payment Accuracy Hospital&Physician Margin Management Operational Intelligence,Decision Support&Labor Productivity Productivity&Margin Optimization Consulting Se
7、rvices Rational&Sustainable Pricing Methodology Pricing Transparency&Market Visibility Payor Contract Payment Accuracy Chargemaster Completeness,&Revenue Assurance Supplies/Implants Revenue Assurance Medication Claim Accuracy&Compliance Post Bill Claim Analysis Charge Capture Performance Improvement
8、 Consulting Services Medication Margin Management The Craneware Groups Trisus platform empowers healthcare organizations to optimize financial performance by unifying compliance,operational efficiency,and revenue growth through Microsoft Azure-based solutions within our Trisus Optimization Suites.Cr
9、aneware plc|Annual Report&Financial Statements 2024 4 Business of Pharmacy Revenue Protection Data Integrity Formulary,Accuracy,Alignment&Completeness 340B Performance&Compliance Real World Benchmarking Medication Claim Accuracy&Compliance Medication Revenue Integrity&340B Consulting Services Medica
10、tion Margin Management Regulatory Awareness&Education Hospital&Professional Chargemaster Completeness&Accuracy Regulatory Awareness&Education Consulting CDM,IM&Formulary Reviews Item Master Completeness,Accuracy,&Alignment Formulary Completeness,Accuracy&Alignment Medical Necessity Audit&Denials Ana
11、lytics Appeal Management&Consulting Services Leveraging innovative technology and real-time insights,these suites enable healthcare leaders to make data-driven decisions that enhance patient care and maximize margins for sustained growth.-The Craneware Group Craneware plc|Annual Report&Financial Sta
12、tements 2024 5 Final Results Financial Highlights(US dollars)Revenue increased 9%to$189.3m(FY23:$174.0m)Adjusted EBITDA1.increased 6%to$58.3m(FY23:$54.9m)Annual Recurring Revenue2.increased to$172.0m(FY23:$169.0m),associated Net Revenue Retention3 remains high at 98%(FY23:100%)Statutory Profit befor
13、e tax increased 20%to$15.7m(FY23:$13.1m)Adjusted basic EPS1.increased 9%to 94.8 cents(FY23:87.0 cents)and adjusted diluted EPS increased to 93.9 cents (FY23:86.3 cents)Basic EPS 33.5 cents(FY23:26.3 cents)and diluted EPS 33.2 cents(FY23:26.1 cents)Robust Operating Cash Conversion4.at 90%of Adjusted
14、EBITDA(FY23:92%)Total cash and cash equivalents$34.6m(FY23:$78.5m)Significant reduction in total Bank Debt in the year at$35.4m(FY23:$83.0m),with continued investment in the Trisus Platform Proposed final dividend of 16.0p per share(FY23:16.0p)giving a total dividend for the year of 29.0p per share(
15、FY23:28.5p)up 2%Completed share buyback programme utilising 5m($6.3m)allocated Operational Highlights Investments made over recent years coming to fruition,delivering strong revenue growth and results above market expectations US healthcare providers refocusing on their longer-term strategic priorit
16、ies,including the delivery of value-based care,provides an increasingly supportive market backdrop for Craneware Strong sales performance,driven by positive market response to Trisus Optimization Suites and success of the Trisus Platform Partner programme Our Shelter platform partner programme has r
17、eturned over$250m of additional benefit to hospitals and is expected to contribute to ARR growth in FY25 and beyond Continued high levels of customer retention,at over 90%across the multiple measures,demonstrating the value Craneware brings to its customers A new strategic alliance formed with Micro
18、soft,enabling a joint go-to-market plan for Trisus offerings on the Microsoft Azure Marketplace expanding Cranewares market reach Outlook Increasing opportunity ahead,including accelerated innovation via the alliance with Microsoft Momentum has continued post-year end,with good levels of trading and
19、 customer confidence,providing the Board with confidence in continued growth momentum for FY25,delivering on current expectations and the sustainable return to double digit growth rates 1.Certain financial measures are not determined under IFRS and are alternative performance measures as described i
20、n Note 27 of the financial statements.2.Annual Recurring Revenue(“ARR”)includes the annual value of subscription license and related recurring revenues at 30 June 2024 that are subject to the underlying contracts and where revenue is being recognised at the reporting date.3.Net Revenue Retention is
21、the percentage of revenue retained from existing customers over the measurement period,taking into account both churn and expansion sales.4.Operating Cash Conversion is cash generated from operations(as per Note 18),adjusted to exclude cash payments for exceptional items and movements in cash held o
22、n behalf of customers,divided by adjusted EBITDA.5.When we refer to Craneware,or The Craneware Group or Group in the annual report we mean the group of companies having Craneware plc as its parent and therefore these words are used interchangeably.Craneware plc|Annual Report&Financial Statements 202
23、4 6 Chairs Statement This has been a year of strategic and financial progress for Craneware.Investments made over recent years are coming to fruition,delivering strong revenue growth and results above market expectations.The Group continues to demonstrate its ability to innovate and meet the needs o
24、f its healthcare customers,while retaining a strong financial foundation.Through its Trisus platform and the associated platform partnership programme,Craneware is uniquely positioned to be a leading player in the digitalization of US healthcare,supporting its customers in the drive towards value-ba
25、sed care.Strong financial results,above market expectations The year has seen the Group deliver on its commitment to increase its rate of growth,while maintaining strong profit margins and reducing bank debt.Group revenues increased 9%to$189.3m(FY23:$174.0m).Adjusted EBITDA increased 6%to$58.3m(FY23
26、:$54.9m),maintaining the Groups target EBITDA margin of above 30%.The healthy sales performance and continued high levels of customer retention have delivered growth in ARR to$172m(30 June 2023:$169m),with further sales and platform partner revenue expected to convert to ARR in future years.The Grou
27、ps continued high levels of cash generation and revenue visibility have enabled it to invest in the strengthening and ongoing innovation of the Trisus platform,continue our progressive dividend policy and complete our share buyback programme,whilst reducing total bank debt,at an accelerated rate,to$
28、35.4m(FY23:$83.0m).The strength of the Groups balance sheet allows the Board to continue to invest organically as well as review appropriate acquisition opportunities aligned with its growth strategy.Leading market position&building momentum Over the course of the financial year we have seen US heal
29、thcare providers emerge from the high-pressure environment of the COVID-19 pandemic into a more settled state,allowing them to re-focus on other strategic priorities.First in these priorities is the desire to deliver first class,value-based care to their communities against the challenging backdrop
30、that includes increasing drug costs,increasing wage bills and an aging population putting more strain on the healthcare system.These challenges result in continued financial pressures they need to understand and actively manage.Craneware holds a unique central position within the US healthcare indus
31、try,with Craneware customers and customers numbers representing approximately 40%of the total number of registered US hospitals.Craneware customers include more than 12,000 US hospitals,health systems,affiliated retail pharmacies and clinics,and our data sets now cover more than 200 million patient
32、encounters.Cranewares independence within the US Healthcare ecosystem allows an uncompromised focus solely on the benefit to its customers.This positioning has been enhanced further this year through the growth of the Groups platform partner programme,leveraging the Groups Trisus platform and data t
33、o bring innovative additional offerings to its customers,as well as the recently announced alliance with Microsoft,supporting accelerated innovation and exploration of AI-based opportunities.Benefitting society through our Purpose The driving force of Craneware is its commitment to its purpose:to tr
34、ansform the business of healthcare through solutions that streamline and improve the operational and financial performance of its customers,providing the strong foundation for them to continue the provision of high-quality care for their communities.Social responsibility and delivering a positive co
35、ntribution to society is paramount to Craneware and this is seen in the superb dedication of its team.The ESG Committee routinely reviews the Groups sustainability credentials and has introduced various initiatives in the year to support its communities.Details about the Groups impact on the communi
36、ties it serves can be found in the ESG Statement within the Annual Report.On behalf of the Board,I would like to express my gratitude to the team at The Craneware Group for the hard work and passion they bring every day to serving our customers.Board Changes Following many years service on the Board
37、 of Directors,Colleen Blye,Senior Non-Executive Director,and Russ Rudish,Non-Executive Director,have informed the Board of their intention to not stand for re-election at the Companys forthcoming Annual General Meeting.On behalf of the Board,I would like to thank them both for their significant cont
38、ributions to Cranewares success to date.Their insight into the US healthcare industry has been invaluable and we Craneware plc|Annual Report&Financial Statements 2024 7 Chairs Statement(continued)Wish them all the very best.The Board is in the latter stages of reviewing replacement independent Non-E
39、xecutive Director candidates and will provide an update in due course.Increased opportunity ahead Cranewares strong sales performance is testament to the strength of the Trisus platform,the increasing success of its platform partnership programme,and the central role the Group plays in enabling its
40、customers to deliver better value healthcare.With an increasing opportunity ahead for Craneware,including accelerated innovation via the recently announced alliance with Microsoft,the Board is confident in the Groups ability to further its enviable market position and deliver successful outcomes for
41、 all stakeholders.Will Whitehorn Chair 2 September 2024 Craneware plc|Annual Report&Financial Statements 2024 8 Strategic Report:Operational and Financial Review Operational Review Our mission is to transform the business of US healthcare.Our independent position in the market means we are uniquely
42、placed to support all US healthcare providers in this pressing agenda,providing them with the insights they need to achieve greater value in healthcare.It is this powerful motivation that drives the whole Craneware team forward.We are immensely proud of the fantastic support our teams provide to our
43、 growing customer base.Together,our offerings continue to return in excess of$1.5 billion to our customers each year.This has been another year of progress and delivery.We have seen many of the projects that were put in motion in recent years,such as our Data Foundations work,collecting and building
44、 our extensive proprietary data-sets,the launch of Trisus Optimization Suites,and our platform partnership programme,all start to come to fruition this year,as is evidenced in the increasing revenue growth rate,continued high levels of customer retention,and the recently announced alliance with Micr
45、osoft.With this success,the opportunity ahead of us only continues to grow.Hospital management teams are increasingly seeking a greater understanding of the revenue and costs running through their extensive operations as they look to ensure a sustainable financial future for their facilities.Our rec
46、ently introduced Optimization Suites combine different solutions to directly address some of the key strategic challenges our customers face today,typically delivering a more than 3x return on investment within the first year of ownership.Meanwhile our innovation teams are exploring new applications
47、,including the use of Generative AI,and we will continue to invest in this area of the business to capitalise on this unique position gained from our extensive proprietary data-sets.As we look to the year ahead,we do so from a position of increasing strength and resilience.Our extensive customer bas
48、e,powerful cloud-based platform,significant data assets,high levels of recurring revenue and strong balance sheet provide us with a solid foundation from which to continue our growth strategy.Digitalization of US Healthcare The US healthcare market continues to experience challenges across three bro
49、ad areas:clinical,financial and operational.Examples within these areas include the opioid epidemic,a mental health crisis,the increasing cost of prescription drugs and the behaviour of manufacturers in selectively honouring contracted and regulatory mandated discounts,medical procedures and associa
50、ted insurance premiums,the shortage of healthcare professionals and wage inflation.The combination of these factors means our customers are consistently being asked to do more,with less,while improving patient care.We believe the key to successfully achieving that is through accurate,accessible and
51、meaningful data and insights,providing the ability to deliver enhanced services,improved infrastructure,robust governance and the ability to make more informed choices around resource allocation.However,to make those choices our customers need to be able to manage and analyse vast amounts of data,wh
52、ich presents a significant and costly challenges for hospitals in areas such as scalability,interoperability,processing costs,security,and compliance.Our vision is for the Trisus platform and its applications whether developed by Craneware or third parties to address these challenges,through connect
53、ed technology in the cloud.Trisus combines revenue integrity,cost management and decision enablement functions into a single cloud-based platform.The platform brings together siloed data from the various existing software systems in a hospital or healthcare system,normalises that data and applies pr
54、escriptive analytics in order to provide insights to customers to support informed decision making regarding a hospitals finances and operations,in one place.We provide customers with the ability to build effective strategies related to revenue,pricing,cost,and compliance to mitigate the internal an
55、d external challenges described above,delivering real financial returns and freeing up valuable resources that can be re-invested and re-deployed by healthcare providers to support the clinical care of their communities and tackle their clinical challenges.Craneware plc|Annual Report&Financial State
56、ments 2024 9 Strategic Report:Operational and Financial Review(continued)Digitalization of US Healthcare(continued)We believe the digitalization of healthcare and improvement of processes using data insights will provide the successful foundation for value-based care and enable the transformation of
57、 the business of US healthcare.Growth Strategy-innovation to profoundly impact US healthcare operations,which will drive demand and expand our addressable market.To date,our growth has been driven through increases in market share and product set penetration(land&expand).In recent years,we have inve
58、sted in the development of the Trisus platform;a sophisticated cloud delivered data aggregation and intelligence platform which is the foundation for our future growth.We are building on top of Trisus to strengthen our current products,leverage our proprietary data assets to expand our offering,inte
59、grate third party solutions to the platform and benefit from the scalability of cloud-technology.Through our 25 year history in the US healthcare market,we have collected our own unique and extensive data set,which we believe contains the insights that will generate our products of the future.While
60、we have always had a team analysing this data,the growth in artificial intelligence(“AI”)and machine learning(“ML”)means it is now easier and faster to do so,particularly when combined with the large language training capabilities of our own proprietary data.Meanwhile,we are also using AI across the
61、 organisation for efficiency and productivity gains.Two Growth Pillars Our strategy has two fundamental growth pillars:1.Platform enhancements to increase ease of use and interoperability With all customers now connected to,and benefitting from,the Trisus platform,our focus is on enhancing the attra
62、ctiveness and value of the platform.This includes three areas of work:the ongoing reengineering of existing offerings enhancing cloud-based applications;the growth of our data sets within the platform,to support future product expansion;and our Data Foundations programme which aims to increase the s
63、peed and ease of hospitals interaction with the platform and interoperability of applications on the platform.Existing product improvements The continual improvement of our existing offerings is an ongoing process.Combinations of new technology and their novel applications give speed,productivity an
64、d efficiency gains that benefit the ease of use of our offerings by our customers.Growth of our data sets The depth of our product offering continues to expand through the mining of the proprietary and regulatory data that we collect,identifying new ways that data can illuminate and support decision
65、 making within the hospital provider environment.We now have data sets covering more than 200 million patient encounters,providing incredibly valuable insights for our customers.Whilst our Revenue Integrity and 340B related software applications utilise different technology stacks within the Trisus
66、platform,they both supplement and further enrich our Trisus data sets.Eventually the work we are doing with our Trisus Data Foundations programme will enable the full integration of these stacks,making our offerings even more attractive to customers as the speed and depth of insights available is in
67、creased.Data Foundations As part of our Data Foundations programme of work,we are utilising the advances in AI and ML data processing to increase the interoperability and connectivity of our applications,while making the platforms back-end processes more efficient and effective.2.Value driven Custom
68、er Expansion With the first stage of cloud-based enhancements for existing products now complete,our focus is now on the development of new applications and the extension of existing applications,to expand our capabilities and the benefits derived by our Provider customers.We anticipate our customer
69、s success will in turn encourage new Providers to visit or re-visit The Craneware Groups solutions,which will facilitate a greater level of cross sale and product penetration across our extensive customer base and the wider US Hospital market over time,driving further growth in ARR as part of an ong
70、oing cycle of transforming the business of healthcare and winning new customers.Craneware plc|Annual Report&Financial Statements 2024 10 Strategic Report:Operational and Financial Review(continued)Growth Strategy(continued)Application Adoption and Measured Value By equipping our internal teams with
71、proactive indicators of customer engagement,derived from their usage data from the platform,we help customers maximise the value they achieve from their Craneware software investment.Helping customers boost their understanding of what good looks like enables them to enact meaningful change in their
72、organisations en-route to sustainable operating model improvements.Increasing this visibility of shared learnings and success achieves individual customer value but also serves to connect customers across the community of Craneware software users.Growth in ARR Healthy sales performance and continued
73、 high levels of customer retention in the year have delivered growth in Annual Recurring Revenue(ARR)to$172m(30 June 2023:$169m),Net Revenue Retention remains high at 98%for the year,with additional growth expected in both these metrics as more of the sales and platform partner success converts to A
74、RR.We continue to see the opportunity to accelerate ARR growth over the medium term,both as our initial platform partners mature and begin generating demonstrable recurring revenue and we unlock the considerable cross and upsell opportunities within our enlarged customer base.Customer retention for
75、the year exceeded 90%,across the multiple measures,which is testament to the value Craneware brings to its customer base.Six Trisus Optimization Suites The Trisus software applications and corresponding service offerings have now been grouped into six Trisus Optimization Suites,bringing together the
76、 solutions that address specific strategic and tactical issues facing healthcare providers and are powered by the same sub-set of customer data.Through packaging our applications into suites,we aim to make it easier for our customers to identify which of our multiple additional applications are like
77、ly to unlock immediate value and address their challenges most effectively,based on their existing data within the Trisus platform.The Optimization Suites are:Trisus Pricing Integrity,Trisus Data Integrity,Trisus Business of Pharmacy,Trisus Revenue Protection Optimization,Trisus Charge Capture Optim
78、ization and Trisus Value-based Margin&Productivity.We have seen a very strong response from the market to these suites and their ability to address issues being faced by hospitals at a more strategic level,providing hospitals with a single vendor rather than multiple point solutions.Sales mix We hav
79、e seen a significant increase in the overall level of new sales,further demonstrating the US healthcare industrys returning focus to strategic priorities after the Healthcare emergency that ended 11th May 2023.The proportion of sales coming from each segment remained broadly consistent with the prio
80、r year.Expansion sales to existing customers represents 83%of our total new sales in the year(FY23:81%),demonstrating the positive response of our customers to the increased ROI derived from the uptake of our partner programme,our additional cloud applications and the packaging of applications and s
81、ervices into our Optimization Suites.Whilst overall sales to new customers have increased in real terms,as a percentage of our total new sales it is 17%(FY23:19%),reflecting the success of our Platform partner program and other new sales to existing customers.Growing Platform partnership programme O
82、ur growing Platform partnership programme further enables us to leverage the strength of our data,platform and customer numbers to generate additional,highly scalable,Platform Revenue streams.It is an umbrella term that encompasses any revenue that is generated in association with third parties and
83、is typically net of any third party outlays.This can be through the use of the data assets within Trisus to directly support our customers in their ability to leverage third parties or through hosting third party applications on the platform.Our customers will benefit from increased breadth of solut
84、ions to deliver value from the platform partnership solutions,available in an efficient and secure manner through the Trisus platform.The application and service providers can benefit from access to our unique positioning,data sets and extensive customer base,and we can benefit from new revenue oppo
85、rtunities and additional business models.This work also creates important distinction and strong competitive differentiation between our holistic Trisus platform offerings and other Revenue Integrity and 340B potential competitors.Craneware plc|Annual Report&Financial Statements 2024 11 Strategic Re
86、port:Operational and Financial Review(continued)Growth Strategy(continued)We will seek to transition the majority of this income into recurring revenue models,adding to our ARR,although the nature of the offering may be such that this is not applicable.These revenues from the platform,are initially
87、categorised as Platform Revenues non-recurring,until a repeatable pattern can be established.We now have our initial programmes successfully generating revenue,and there is a building pipeline of additional programme opportunities,which will be rigorously assessed prior to launch.Microsoft Alliance
88、We were delighted to announce in early July 2024 that we had formed an alliance with Microsoft to further transform the business of healthcare.As part of this,Craneware was named a Microsoft Global Partner Solution provider and we are in the process of finalising our joint go-to-market plan for our
89、Trisus offerings on the Microsoft Azure Marketplace.The collaboration will see the delivery of differentiated offerings and increased value to customers through the application of industry leading data analytics,AI,and modern platform technology.As part of the agreement,we signed a Microsoft Azure C
90、onsumption Commitment(MACC)agreement,bringing predictability to our cloud spending,budget optimisation,and enhanced financial planning,thus driving cost efficiency.A key factor of the agreement is the Microsoft Unified Support Commitment,which provides for additional resilience and cyber protection
91、to us and our customers,with a guaranteed response time and prioritisation of technical resources were there to be any outages irrespective of the cause.Craneware teams have begun co-innovation with Microsofts AI experts to accelerate the application of AI enhancements to existing Trisus offerings a
92、nd the exploration of new AI-based applications.Cranewares long heritage in the US healthcare industry,as well as more than 200 million unique patient encounters within its datasets,mean it is uniquely positioned to provide powerful,actionable insights to participants across the healthcare industry.
93、These insights support better operational and strategic decisions,enabling further efficiencies in provider performance so they can focus on serving their communities and healthcare missions,transforming the business of healthcare.The first of the Trisus applications to be made available on the Micr
94、osoft Azure Marketplace will be Trisus Chargemaster,Trisus Decision Support,and Trisus Labor Productivity.These offerings,supported by joint go-to-market initiatives and other activities,will help expand The Craneware Groups market reach via the Microsoft partner ecosystem.To drive the success of bo
95、th this and the platform partner programme,we have created a new role,SVP of Strategic Partnerships.The role will serve as the lead liaison between The Craneware Group and its partners,working closely with internal and external cross-functional teams to identify new opportunities and negotiate mutua
96、lly beneficial agreements that drive success for our customers,engender customer loyalty,produce both direct and indirect new revenue opportunities for the Group and expand The Craneware Groups reach.M&A While organic growth across our portfolio remains the priority,we continue to evaluate the marke
97、t for suitable M&A opportunities and will continue to pursue strategically aligned companies that will accelerate our growth strategy.We maintain the same four key acquisition criteria of which target companies must fit into at least one,being:the addition of relevant data sets;the extension of the
98、customer base;the expansion of expertise;and the addition of applications suitable for the US hospital market.We view our platform partnering programme as a potential source of future M&A activity,provided this would deliver mutual benefits to all parties.Our People and Community Our three focus are
99、as of Community,People and Environment continue to guide our ESG efforts.Central to our purpose is that our solutions benefit society.Our solutions deliver value for our customers,through the provision of accurate financial data,insight and analytics,that can be reinvested to support our customers i
100、n the provision of care to their communities.In addition,our 340B pharmacy solutions enable our customers to generate cost savings which go directly to the provision of care for the underserved in their communities.The Craneware Group is also directly involved with the 340B Matters initiative,which
101、aims to educate the market regarding the importance of the 340B program for the non-profit healthcare facilities that provide accessible and affordable care within their communities.Our customers have seen more than$1.5bn in benefit from utilising our solutions this year,helping to stretch scarce fe
102、deral resources,to reach more eligible patients and provide more comprehensive services.Craneware plc|Annual Report&Financial Statements 2024 12 Strategic Report:Operational and Financial Review(continued)Our People and Community(continued)Extending the considerable support provided for many years,w
103、e continue to develop programmes and opportunities to positively and directly impact our communities;this complements our purpose and reflects the causes which are important to our employees.This is achieved through initiatives driven by our employees through Craneware Cares and the Craneware Cares
104、Foundation.During the year,employees have supported several causes and charitable organisations including our quarterly Spotlight Charity and Community Outreach Program.Our team provides valuable support to our customers and the achievements of the Group are due to the efforts,experience and dedicat
105、ion of our people.Our team is a talented mix of employees from diverse backgrounds,which contributes to high levels of innovation and collaboration.We believe in the importance of fostering a team environment while also celebrating the individuals within the team.We continue to invest in our team,ou
106、r facilities and working practices and we welcome feedback and suggestions for improvements through a range of employee engagement mechanisms.During the year we have held sessions under our Craneware Spaces diversity,equity and inclusion programme and relaunched our Employee Advisory Group which is
107、helping to support some of our diversity,equity and inclusion efforts,along with other initiatives such as sustainability.We continue to progress actions that help to support our environmental focus area.During FY24 we reduced our rented office facility footprint in the US thereby assisting with low
108、ering our energy consumption and corresponding emission reductions.This process involved the closure of our Atlanta office and we relocated our office within Deerfield Beach which provided the opportunity to configure improved collaboration spaces in the new office facility.In FY24 we also extended
109、our climate scenario analysis and risk assessment process and continue to develop the gathering of emissions data in support of compiling appropriate metrics and KPIs to guide our efforts towards our pathway to net zero.Financial Review This has been a positive year for The Craneware Group,where we
110、have seen our end market of US Healthcare return its focus to its longer-term strategic priorities.We have also seen many of the investments we have made over recent years begin to deliver the expected financial returns,including the acceleration of our platform partnership programme.For the year en
111、ded 30 June 2024,we are reporting revenue of$189.3m(FY23:$174.0m)representing accelerated and strong revenue growth of 9%.We continue to invest in our future while delivering an Adjusted EBITDA for the year of$58.3m,6%ahead of the prior year(FY23:$54.9m),representing an Adjusted EBITDA margin of 31%
112、(FY23:32%).The Group continues to be highly cash generative with a strong balance sheet.Our continued high levels of cash generation allowed us to reduce bank debt by$48m to$35.4m,pay dividends of$12.8m,reduce interest costs,and to commit a total of$6.3m to a share buyback programme.The Group has ma
113、intained its Revolving Credit Facility(“RCF”)and strong banking relationships,hence has considerable financial resources at its disposal.As a result of all of the above,our Adjusted Basic Earnings per share increased 9%to 94.8 cents(FY23:87.0 cents).Underlying Business Model and Revenue Mix The cont
114、racts we sign with our hospital customers provide a license for that customer to access a specified product or suite of products throughout their subscription license period.At the end of an existing subscription license period,or at a mutually agreed earlier date,we look to renew these contracts wi
115、th customers.We recognise software subscription license revenue and any minimum payments due from any other long term contracts evenly over the life of the underlying contract term.In addition to the subscription license fees,we provide contracted transactional services,which are highly dependable,a
116、nd recurring,but can occasionally see some variation year to year based on volume of transactions.Transactional services are recognised as we provide the service and include our contracts with our 340B customers that enable them to engage with their network of contract pharmacies.We also provide pro
117、fessional and consulting services to our customers.Where these services are provided over an extended contract period,usually alongside the multi-year software license as part of one of our Trisus Optimization Suites,or where they relate to a complex implementation integral to the use of the softwar
118、e,the revenue is recognised evenly over the life of the underlying contract or project term.The combination of these two software revenue models plus our recurring professional services represent the recurring platform revenues of the business,which for the current year have increased to$168.3m(FY23
119、:$163.7m).Craneware plc|Annual Report&Financial Statements 2024 13 Strategic Report:Operational and Financial Review(continued)Underlying Business Model and Revenue Mix(continued)Shorter professional or consulting services engagements are also provided,usually taking less than one year to complete.T
120、hese revenues are usually recognised as we deliver the service to the customer,on a percentage of completion basis.In the year,despite increasing underlying sales,these engagements have delivered$7.2m of revenue(FY23:$9.2m),which reflects the timing and resource available to complete the engagements
121、 during the year.However,a building backlog of these projects has been generated and associated revenues will be recognised during FY25.We continue to look for new and innovative ways to leverage the Trisus platform and the significant data assets within it.Our Platform partnership programme aims to
122、 deliver meaningful benefit to our customers and derive new revenue opportunities and additional business models for the Group.These revenues are recognised at the point we are able to invoice our customers.As initially,it is often too early to establish a pattern of what would become recurring,they
123、 are shown separately as“Platform Revenues non-recurring”,however once proven we expect many of these revenue opportunities to deliver future annual recurring revenue.In the year,we are reporting Platform Revenues non-recurring of$13.8m(FY23:$1.1m).Annual Recurring Revenue We define ARR as the annua
124、l value of subscription license and related recurring revenues as at the Balance Sheet date that are subject to underlying contracts and where revenue is being recognised at the reporting date.ARR at 30 June 2024 increased to$172.0m(at 30 June 2023:$169.0m)with Net Revenue Retention remaining high a
125、t 98%(FY23:100%)and customer retention for the year,again,exceeding 90%,all combining to provide a resilient foundation for the future growth of the Group.These metrics are a testament to the value Craneware brings to its customer base.Gross Margins Our gross profit margin is calculated after taking
126、 account of the incremental costs we incur to obtain the underlying contracts,including sales commission contract costs which are charged in line with the associated revenue recognition and the direct costs of professional services employees who deliver the services required to meet our contractual
127、obligations.The gross profit for FY24 increased 9%to$162.2m(FY23:$148.4m).This represents a gross margin percentage of 86%(FY23:85%)which is in line with the expected gross margin of the Group.Operating Expenses Net operating expenses(to Adjusted EBITDA)increased 11%to$103.9m(FY23:$93.5m),which cont
128、inues to reflect our investment approach of assessing,priority ranking then approving investment expenditure as we have clear evidence of the revenue growth that will support our commitment to deliver an Adjusted EBITDA margin of+30%.We continue to ensure prudent cost control and leverage our abilit
129、y to balance our investment between the US and the UK(and the associated Sterling exchange rate).Product innovation and enhancement continue to be core to this future and our ability to achieve our potential.We continue to pursue our buy,build,or partner strategy to build out the Trisus platform and
130、 its portfolio of products.As we are highly cash generative,we are able to use our cash reserves to further“build”alongside the partner activities in the year and therefore continue to invest significant resource in R&D.The total cost of development in the year was$52.1m(FY23:$50.6m).We continue to
131、capitalise only the costs that relate to projects that have yet to be released to the market and will deliver new“future economic benefit”to the Group.With the total amount capitalised in the year,being$15.8m(FY23:$15.0m)representing 30%of total R&D spend in FY24(FY23:30%),which represents a reducti
132、on to our historical run rates of 35%to 40%of total R&D spend.We continue to believe this investment is an efficient and cost-effective way to further build out our growth strategy alongside any acquisition and Platform partner strategy.As specific products and enhancements are made available to rel
133、evant customers,the associated development costs capitalised are amortised and charged to the Groups income statement over their estimated useful economic life,thereby correctly matching costs to the resulting revenues.Net Impairment(charge)/reversal on financial and contract assets In the prior yea
134、r,the culmination of efforts since the acquisition of Sentry Data Systems,Inc.(Sentry)and associated improvements to ongoing relationships with customers resulted in a benefit to FY23 of$2.1m.For the current year we have seen a more normalised bad debt provision in the current year of$1.1m.Craneware
135、 plc|Annual Report&Financial Statements 2024 14 Strategic Report:Operational and Financial Review(continued)Adjusted EBITDA and Profit before taxation To supplement the financial measures defined under IFRS the Group presents certain non-GAAP(alternative)performance measures as detailed in Note 27.W
136、e believe the use and calculation of these measures are consistent with other similar listed companies and are frequently used by analysts,investors and other interested parties in their research.The Group uses these adjusted measures in its operational and financial decision-making as it excludes c
137、ertain one-off items,allowing focus on what the Group regards as a more reliable indicator of the underlying operating performance.Adjusted earnings represent operating profits,excluding costs incurred as a result of acquisition(if applicable in the year),integration and share related activities(if
138、applicable in the year),share related costs including IFRS 2 share-based payments charge,interest,depreciation and amortisation(“Adjusted EBITDA”).In the year,total costs of$0.7m(FY23:$0.5m)have been identified as exceptional.These relate primarily to the one-off costs associated with the later stag
139、es of the back-office systems integration of Sentry.As such,these costs were adjusted from earnings in presenting Adjusted EBITDA.Adjusted EBITDA has grown in the year to$58.3m(FY23:$54.9m)an increase of 6%.This reflects an Adjusted EBITDA margin of 31%(FY23:32%),confirming we continue to meet our t
140、arget of a combined Group adjusted EBITDA margin of 30+%.Following the amortisation charge on acquired intangible assets relating to the Sentry acquisition of$20.9m(FY23:$20.9m),and the reduction in our net Finance expense to$4.0m(FY23:$6.1m)through the success of our treasury management,profit befo
141、re taxation reported in the year has increased 20%to$15.7m(FY23:$13.1m).Taxation The Group generates profits in both the UK and the US.The Groups effective tax rate is primarily dependent on the applicable tax rates in these respective jurisdictions.Following the Sentry acquisition,whose profits are
142、 solely generated in the US,the Group now generates a higher proportion of its profits there.Other factors impacting the effective tax rate include tax deductibility of amortisation of acquired intangibles,tax losses brought forward and the number of share options exercised and associated tax treatm
143、ent.Reconciliation of the tax charge for the year can be seen in Note 9.As a result,the effective tax rate for the year ended 30 June 2024 is 26%(FY23:29%).EPS The Group presents an Alternative Performance Measure of Adjusted EPS,to provide consistency to other listed companies.Both Basic and Dilute
144、d Adjusted EPS are calculated excluding costs incurred as a result of acquisition and share related activities,being$0.5m(tax adjusted)in the year(FY23:$0.4m)and amortisation of acquired intangibles of$20.9m(FY23:$20.9m).Adjusted basic EPS,continues to move back in line with the increased levels of
145、Adjusted EBITDA and has increased 9%to$0.948(FY23:$0.870)and adjusted diluted EPS has increased to$0.939(FY23:$0.863).Basic EPS in the year increased to$0.335(FY23:$0.263)and Diluted EPS increased to$0.332(FY23:$0.261).Cash and Bank Facilities Cash generation and a strong balance sheet have always b
146、een a focus of the Group.Our business model,based on recurring revenues and our ongoing efforts to maintain high levels of customer retention,provide the basis for high levels of cash generation.We always monitor the quality of our earnings through Operating Cash Conversion,this being our ability to
147、 convert our Adjusted EBITDA to“cash generated from operations”(as detailed in the consolidated cash flow statement).In the year,having made the necessary improvements to Sentrys cash management processes,bringing them into line with the rest of the Groups operations,we continue to deliver high leve
148、ls of Operating Cash Conversion across the combined Group at 90%in the year(FY23:92%).We continually review our capital allocation approach,ensuring we balance investing in our future with returning funds to our shareholder base and reducing our external bank debt.We have returned funds to our share
149、holders during the year via our normal progressive dividend policy,returning$12.8m in the current year(FY23:$12.1m),and our share buyback.In the prior year(on 12 April 2023),the Group commenced a share buyback programme of up to 5 million.The shares purchased through this programme are held in treas
150、ury and will be used to satisfy employee share plan awards.The Programme was undertaken using a phased approach.The Programme was operated under the authority granted to the Company by shareholders at the Companys Annual General Meetings in 2022 and in 2023,and within the regulatory guidance on the
151、quantity of shares the Company may purchase on any single day.Craneware plc|Annual Report&Financial Statements 2024 15 Strategic Report:Operational and Financial Review(continued)Cash and Bank Facilities(continued)This programme completed during the year utilising the balance of the allocated 5 mill
152、ion($6.3 million)(FY23:3.09 million($3.87 million).Through the programme the Company purchased a total of 332,531 Ordinary Shares(FY23:223,632)at an average price of 15.03 per share.At 30 June 2024 the Companys share price was 23.10.These shares represent 0.94%(FY23:0.63%)of the Companys issued Ordi
153、nary Shares and are held in treasury.During the year 99,646 shares(FY23:9,621 shares)were issued from treasury to satisfy exercises under the existing employee share plan awards as a result at the Balance sheet date,223,264 Ordinary Shares(FY23:214,011 Ordinary Shares)are held in treasury.In regard
154、to the bank debt,the facility entered into for the acquisition of Sentry comprised a term loan of$40m,which continues to be repaid at$2m per quarter,and a Revolving Credit Facility of up to$100m.During the year,$8m(FY23:$8m)of the term loan has been repaid on schedule,and a further$40m of the Groups
155、 cash reserves have been offset against the Revolving Credit Facility in line with our current Treasury Management Policy.The RCF balance has reduced from$60m to$20m,which provides further available facility of$80m.All covenants continue to be met,the facilities currently expire in June 2026 and we
156、have already had early stage discussions in regards to their extension beyond this date.We thank our banking partners,alongside our shareholders,for their continued support of our growth strategy.As a result,Cash reserves at the year-end were$34.6m(FY23:$78.5m)and total bank debt outstanding of$35.4
157、m(FY23:$83m)giving the Group both significant liquidity and a strong balance sheet.Balance sheet Within the balance sheet,deferred income levels reflect the amounts of the revenue under contract that we have invoiced but have yet to recognise as revenue and therefore are subject to timing.This balan
158、ce is a subset of the future performance obligations detailed in Note 4.Deferred income,accrued income,and the prepayment of sales commissions all arise as a result of our SaaS business model described above and we will always expect them to be part of our balance sheet.They arise where the cash pro
159、file of our contracts does not exactly match how revenue and related expenses are recognised in the Statement of Comprehensive Income.Overall,levels of deferred income are significantly more than any accrued income and the prepayment of sales commissions,we therefore remain cash flow positive in reg
160、ard to how we account for our contracts.Currency The functional currency for the Group,debt and cash reserves,is US dollars.Whilst the majority of our cost base is US-located and therefore US dollar denominated,we have approximately twenty percent of the cost base situated in the UK,relating primari
161、ly to our UK employees which is therefore denominated in Sterling.As a result,we continue to closely monitor the Sterling to US dollar exchange rate and where appropriate,consider hedging strategies.The average exchange rate throughout the year was$1.2595 as compared to$1.2043 in the prior year.The
162、exchange rate at the Balance Sheet date was$1.2645(FY23:$1.2619).Dividend In proposing a final dividend,the Board has carefully considered a number of factors including the prevailing macro-economic climate,the Groups trading performance,our current and future cash generation and our continued desir
163、e to recognise the support our shareholders provide.After carefully weighing up these factors,the Board proposes a final dividend of 16.0p(20.23 cents)per share giving a total dividend for the year of 29p(36.67 cents)per share(FY23:28.5p(35.95 cents)per share),an increase of 2%.Subject to approval a
164、t the Annual General Meeting,the final dividend will be paid on 18 December 2024 to shareholders on the register as at 29 November 2024,with a corresponding ex-Dividend date of 28 November 2024.The final dividend of 16.0p per share is capable of being paid in US dollars subject to a shareholder havi
165、ng registered to receive their dividend in US dollars under the Companys Dividend Currency Election,or who register to do so by the close of business on 29 November 2024.The exact amount to be paid will be calculated by reference to the exchange rate to be announced on 29 November 2024.The final div
166、idend referred to above in US dollars of 20.23 cents is given as an example only using the Balance Sheet date exchange rate of$1.2645/1 and may differ from that finally announced.Craneware plc|Annual Report&Financial Statements 2024 16 Strategic Report:Operational and Financial Review(continued)Outl
167、ook The strong financial results during the year demonstrates the strength of the Trisus platform,our increasing platform partnership successes and the role we play in helping healthcare providers drive for better value in the US healthcare market.We see increased opportunity ahead.Our alliance with
168、 Microsoft will allow us to accelerate innovation and explore new AI-based applications in an efficient manner which,alongside the breadth of the Trisus platform,our unique data assets and our considerable and extensive customer base provides significant scope for expansion in the size of our addres
169、sable market.We approach this opportunity from a position of strength and resilience,with a strong balance sheet,high levels of recurring revenue and consistently high customer retention rates.This gives us the confidence and the ability to continue investing for growth,to secure our long-term marke
170、t position.We have commenced FY25 with a good level of trading,and remain confident in achieving another positive year ahead,growth acceleration over the near term,and our ability to create further long-term value for all stakeholders.Keith Neilson Craig Preston Chief Executive Officer Chief Financi
171、al Officer 2 September 2024 2 September 2024 Craneware plc|Annual Report&Financial Statements 2024 17 Strategic Report:Key Performance Indicators The key performance indicators listed below are focused on growing our revenues and improving our revenue mix as well as improving earnings growth for our
172、 shareholders and generating sustainable cashflows.Detailed explanation of the movements is contained in the Financial Review on pages 12 to 15.Key Performance Indicator Review Revenue Growth 2024 2023 Revenue$189.3m$174.0m Growth 9%5%Through the Groups SaaS revenue recognition model,underlying sale
173、s levels in the current year combine with prior years sales and continued high levels of customer retention,to increase the recurring revenue reported each year.The long-term nature of our contracts supports sustainable growth with the majority of revenue resulting from current year sales being reco
174、gnised in future years.Annual Recurring Revenue 2024 2023 Annual Recurring Revenue$172m$169m Growth 2%2%Annual Recurring Revenue(“ARR”)is defined as the annual value of subscription license and related recurring revenues as at the Balance Sheet date that are subject to underlying contracts and where
175、 revenue is being recognised at the reporting date.ARR at 30 June 2024 increased to$172m from the$169m reported at 30 June 2023,demonstrating the Groups continued high levels of contracted revenue visibility.Net Revenue Retention 2024 2023%Net revenue retention 98%100%Net Revenue Retention is the pe
176、rcentage of revenue retained from existing customers over the measurement period,taking into account both churn and expansion sales.NRR remains high at 98%.Adjusted EBITDA 2024 2023 Adjusted EBITDA$58.3m$54.9m Adjusted EBITDA margin 31%32%Growth 6%6%We take a measured approach to our investment,ensu
177、ring to invest to support the future growth of the Group.The continued revenue growth has allowed us to both continue and,in certain areas,accelerate this investment whilst delivering Adjusted EBITDA growth.By taking this approach,we aim to release additional investment,in line with revenue growth,w
178、ith the focus on delivering profitable growth to all stakeholders.Craneware plc|Annual Report&Financial Statements 2024 18 Strategic Report:Key Performance Indicators (continued)Key Performance Indicator Review(continued)Adjusted EPS 2024 2023 Adjusted EPS 94.8 cents 87.0 cents Growth 9%(2)%Adjusted
179、 EPS growth demonstrates the Groups overall profitability,adjusted for exceptional items,after taking into account the taxation in the year,reduction in debt costs and any changes in share capital.Net Borrowings/Cash 2024 2023 Net Borrowings$(0.8)m$(4.5)m Cash$34.6m$78.5m The Group continues to main
180、tain healthy cash reserves of$34.6m(FY23:$78.5m).Net Borrowings has reduced to$0.8m at 30 June 2024(FY23:$4.5m)due to repayments on the term loan and a reduction in the outstanding revolving credit facility balance drawn down.This represents a comfortable level of borrowing for the business.Net Borr
181、owings/Adjusted EBITDA 2024 2023 Net Borrowings/Adjusted EBITDA(1)%(8)%Net Borrowings as a percentage of Adjusted EBITDA represents the leveraging of the Groups Balance Sheet and its ability to access future funds to continue its buy,build or partner strategy.At the current levels,the Board is comfo
182、rtable with the level of debt and leveraging of the Group.Operating Cash Conversion 2024 2023 Operating Cash Conversion 90%92%The Group continues to convert very high levels of the Adjusted EBITDA reported in the year into operating cash flows.Overall Operating Cash Conversion,at 90%for the year end
183、ed 30 June 2024,is consistent with the prior year of 92%.Craneware plc|Annual Report&Financial Statements 2024 19 Strategic Report:Principal Risks and Uncertainties Risk Management,Principal Risks and Uncertainties Risks and uncertainty(as well as opportunities)are intrinsic factors of conducting an
184、y business.To deliver continued sustainable growth,the Group recognises the need to minimise the likelihood and impact of key risks.These risks are both general in nature i.e.business risks faced by all businesses,and more specific to the Group and the market in which it operates.Our approach to ris
185、k management and how we intelligently assume risks that will help enable future growth,are key considerations for how we deliver long-term stakeholder value whilst protecting our business,people,assets,capital and reputation.The Board is very much aware that,as a public company,reputational damage i
186、s a risk and a key concern.Whilst the risks outlined in this report do not specifically detail the risk from reputational damage,the potential effects to our reputation are not under-estimated by the Board.Risk Management The Directors have carried out a robust assessment of the principal and emergi
187、ng risks facing the Group,including those that would threaten its business model,future performance,solvency and liquidity.The Group maintains its internal risk register that forms the foundation of the Board and the Audit Committee review process.Executive Directors and senior management meet to re
188、view both the risks facing the business and the controls established to minimise those risks including their effectiveness in operation on an ongoing basis.The aim of these reviews is to provide reasonable assurance that material risks and problems are identified and appropriate action taken at an e
189、arly stage.The Board recognises that the nature and scope of risks can change.Risks and opportunities are factors which are continually considered when the Board is making decisions about the business and strategy.The Operations Board is chaired by the Chief Executive Officer and also comprises the
190、Chief Financial Officer,the Chief People Officer and six further members of the Senior Management Team.The risk review is exercised through the monthly management reports and Operations Board meetings and,due to the importance of this topic,there is a sub-committee of the Operations Board(the Risk a
191、nd Compliance Committee(“R&C Committee”),chaired by the Chief Financial Officer)to ensure there is specific focus on risk review and risk management.For each risk identified,the control strategy and who is accountable for discharging that strategy is identified and documented in the meeting minutes.
192、During monthly Operations Board meetings,material emerging risks are reviewed with discussion concerning actions to reduce or monitor Group exposure.In this way,risks are reviewed and updated monthly.The R&C Committee is a sub-committee of the Operations Board that takes the lead responsibility of m
193、onitoring and assessing risks across the Group.The Committee usually meets monthly and comprises the Chief People Officer,the Chief Financial Officer,the Chief Legal Officer,the Chief Technology Officer and the Chief Information Officer.The Head of Risk and Compliance role is the secretary to this c
194、ommittee and attends all meetings.The Group also has three further committees that report into the R&C Committee:the Security Council,the Health&Safety Committee and the ESG Committee.The Security Council is chaired by the Chief Information Officer and its purpose is to assess current technology ris
195、ks,approval and implementation of mitigation plans and to inform the Chief Information Officer of future strategy around this key business area.The Health&Safety Committee,chaired by the Chief People Officer,monitors compliance with health and safety regulations and develops and monitors the Groups
196、health and safety policies and strategy.The ESG Committee is chaired by the Chief People Officer,further details of this Committee and its activities are included in the Non-Financial and Sustainability Information Statement and the ESG Statement sections of this Annual Report.The Corporate Governan
197、ce Report includes an overview of the Groups internal control systems.We will continue to enhance our risk management processes,prioritising specific areas of focus,including:cyber security risks and operational resilience,as well as being alert to the identification of emerging risks.Risk Appetite
198、Risk appetite is not static and is regularly assessed by the Board to ensure its continued alignment with the Groups strategy.The Groups risk appetite defines the level and type of risk the Group is able and willing to accept in order to achieve its strategic aims.The Groups risk appetite influences
199、 the Groups culture and operating decisions and is reflected in the way risk is managed.The Board aims to ensure that the Group is only exposed to appropriate risks which are managed effectively in accordance with the Groups tolerance to risk.The Group assesses,scores,ranks and then manages individu
200、al risks.For each identified risk,it is characterised,estimated how often the specified events could occur and a judgement is made regarding the magnitude of their likely consequences.For each identified risk,the risk management priorities are decided by evaluating and comparing the level of risk.Cr
201、aneware plc|Annual Report&Financial Statements 2024 20 Strategic Report:Principal Risks and Uncertainties (continued)Risk Appetite(continued)This allows each risk to be quantified as to the of risk.effect of the risk and its impact;likelihood of the risk occurring;consideration of any advantage asso
202、ciated with the risk;action to avoid or mitigate the risk;action to take if the risk occurs.Principal Risks and Uncertainties The risks outlined here are those principal risks and uncertainties that are considered to be material to the Group.They do not include all risks associated with the Group an
203、d are not set out in any order of priority.For each risk an indication is also provided for the estimated trend in the risk exposure being increased,decreased or relatively unchanged compared to the prior year.The risk assessment conducted through the risk management process has not identified addit
204、ions to the principal risks category however the scope and title of two of the principal risks have been changed.Technology Risks encompasses broader interrelated risk considerations which were described within Competitive Landscape risk last year.Also Treasury Risk incorporates Compliance with debt
205、 finance facility covenants and Banking Environment which were disclosed as separate risks in last years Annual Report.It has also been concluded that:based on an appraisal of its likely consequences,Management of Growth is no longer a principal risk but is instead a general business risk;and having
206、 completed the transaction and integration of an acquisition the size of Sentry,we are now confident that the Group has the established and tested experience within the management team.Therefore Acquisitions is no longer assessed to be a principal risk.The principal financial risks are detailed in N
207、ote 3 to the financial statements.The Boards process for determining and managing risks is also detailed in the Corporate Governance Report.In summary,and as explained in the Operational Review section of this Strategic Report,the US healthcare market is not immune to the macro-economic climate and,
208、with the increasing focus and requirements of the evolving healthcare marketplace,the Group expects the market to continue to be competitive.Our customers are continually taking steps to create further resilience across their financial operations.We are committed to partnering with our customers by
209、providing the platform,regulatory information and data to enable them to do so.The Group aims to remain at the forefront of product innovation and delivery,through a combination of in-house development and specific acquisition opportunities.This requires the recruitment,retention,and reward of skill
210、ed employees,alongside responsiveness to changes and the opportunities that result,as they arise.Conflicts in Ukraine and the Middle East Craneware does not have any operations or customers in any current conflict zone or any bordering areas and the Board considers that the risk of direct operationa
211、l issues for Craneware,as a result of these situations,to be relatively low based on current knowledge.There are,however,geopolitical with macro-economic adverse impacts occurring as a result in the UK and in the US where Craneware operates.The Board continues to keep these situations under review,i
212、ncluding the following risks:increasing cyber threat;escalating energy and fuel costs will increase Cranewares costs to power its offices and operations and travel costs;a period of relatively high inflation and longer-term economic downturn may have a detrimental impact on the financial performance
213、 of The Craneware Group.Principal Risk Change/Trend from FY23 A Data and cyber security B Protection of Data C Intellectual Property Risk D Regulatory Environment E US Healthcare:Complexity,Evolution&Reform F Complex market dynamics G Technology Risks H Macro-economic Environment I Treasury Risks Cr
214、aneware plc|Annual Report&Financial Statements 2024 21 Strategic Report:Principal Risks and Uncertainties (continued)Data and cyber security Trend since last year:Increased Issue:Security of customer,commercial,and personal data poses heightened risks to all businesses,especially against a backdrop
215、of increasingly complex regulatory environments and safeguards over personal and patient data.The continually growing instances and variety of cyber and data-related threats presents a significant challenge in terms of securing data and systems against attack.Craneware continues to strengthen its cy
216、ber security and information safeguarding capabilities however it is recognised that the global threat of cyber-attack is increasing along with the Group becoming a larger target as we grow.The Craneware Groups utmost priority is the reliable protection of customer data,especially the large amounts
217、of Protected Health Information being administered.If our systems become compromised,this may result in the loss of sensitive data and/or the interruption of services for our customers.This could also lead to significant reputational risk as well as a significant financial risk that can only be part
218、ially mitigated through insurance.While it is important to have up to date policies and procedures in place,human error and increasing sophistication of the potential attackers will always pose a risk to organisations.Mitigating Actions:Security of our systems and data is critical to our business an
219、d we strive for strong,effective and comprehensive security and governance aligned to the nature of the data the Group is handling and relevant and evolving regulations.Our systems are monitored and actively managed to mitigate and address any threats.Whilst it is impossible to completely eliminate
220、data and cyber security risk,we are clear that effective mitigation now goes beyond building and operating security controls.The Group continues to invest in strict physical and data security systems and protocols with multiple layers of defences,including data loss prevention systems,internal and e
221、xternal threat monitoring.We deploy comprehensive auditing of our controls and processes targeted in these areas.The Groups Security Council assesses current technology risks,approval and implementation of mitigation plans as well as to advise on the future strategy around this key business area.The
222、 Group also has a dedicated Information Security team.It is important to continually reinforce the level of awareness of these risks across all personnel within the Group.The Group recognises and supports(including through ongoing employee training and applicable policies and procedures)a culture th
223、at embeds security across the business.Along that vein,as many studies suggest that employees and contractors are the most common cause of data breaches,with phishing attacks being the predominant cause,the Group requires mandatory data security training to be completed by all employees on at least
224、an annual basis and when employees join the Group.There is ongoing development and investment in additional training.The effectiveness of this training is regularly tested and,where any shortcomings are identified,employees are required to reperform and supplement their mandatory training.In view of
225、 the importance of the procedures,security,regulation and controls around Cranewares solutions and customer data,since 2019 Craneware has met the requirements for and has maintained the HITRUST CSF certification for its Trisus and InSight solutions and corporate services.Health Information Trust All
226、iance(HITRUST Alliance)is a collaboration with healthcare,technology and information security organisations which develops,maintains and provides broad access to its widely adopted common risk and compliance management and de-identification frameworks;related assessment and assurance methodologies;a
227、nd initiatives advancing cyber sharing,analysis and resilience.HITRUST has established a common security framework(CSF)to address the multitude of security,privacy and regulatory challenges facing organisations.The scope of the HITRUST CSFs requirements is wide and requires a very high standard of d
228、ata security arrangements as these have been set in the context of the accreditation being relevant to US healthcare providers with handling sensitive data(Protected Health Information)and impacts in some way all areas of the business(at least in respect of the required enhancement to the Group-wide
229、 IT and data security policies).This serves to inform IT Security roadmaps and significant investments with continued compliance being an ongoing focus.Adherence to HITRUST security requirements go beyond basic government regulations.Craneware plc|Annual Report&Financial Statements 2024 22 Strategic
230、 Report:Principal Risks and Uncertainties (continued)Data and cyber security(continued)Mitigating Actions(continued):Sentinel,Sentrex,Trisus Decision Support,Trisus Labor Productivity and Trisus Medication Inpatient Rebate applications meet American Institute of Certified Public Accountants(AICPA)Se
231、rvice Organization Controls(SOC)requirements,completing the external audit verified SOC Type II assessments annually.We reconfirm our audit certifications on an annual basis,and regularly evaluate to ensure our certification selections continue to be the best measure of security controls.Further det
232、ails regarding the Groups information security arrangements are contained in the Environmental,Social and Governance Statement in this annual report.Protection of Data Trend since last year:No Change Issue:The Group maintains a large amount of customer data as well as holding and processing employee
233、 data,which is protected and subject to legislative requirements in multiple jurisdictions.We have an obligation to protect the data we hold,whether it is customer or employee data.Loss and/or misuse of this data could result in a loss of reputation and regulatory sanctions or fines.The protection o
234、f customer data,which includes Protected Health Information,falls under the provision of the Health Insurance Portability and Accountability Act(HIPAA)and the Health Information Technology for Economic and Clinical Health(HITECH)Act.Any data breach must be reported and,depending on the size of the b
235、reach,it may be made public which could seriously damage the Groups reputation.In addition to the regulations for protection of Protected Health Information and also General Data Protection Regulation(GDPR)compliance,over the past few years States across the US have been negotiating and passing data
236、 privacy legislation.As legislation is occurring at the State level,there are now a considerable number of variations on data privacy to be addressed,increasing the complexity of compliance and therefore resulting in a higher possibility of non-compliance.Mitigating Actions:The Mitigating Actions de
237、scribed above for Data and Cyber Security risks are also relevant for Protection of Data risks.The Craneware Group maintains a detailed Information Security Program,which aligns with applicable laws and regulations.This program governs how The Craneware Group employees and applications interact with
238、 sensitive,protected customer data.All employees and contractors are required to undertake regular mandatory training in key topics.The Chief Legal Officer is certified in privacy law in the US and the UK.We continue to ensure we address current and evolving regulations.The Data and Cyber Security s
239、ection above contains details regarding the HITRUST CSF certification for Trisus and InSight solutions and corporate services and also AICPA SOC Type II certification in place for Sentinel,Sentrex,Trisus Decision Support,Trisus Labor Productivity and Trisus Medication Inpatient Rebate applications.H
240、ITRUST is expanding their security and data privacy controls to cover key legislation.Craneware plc|Annual Report&Financial Statements 2024 23 Strategic Report:Principal Risks and Uncertainties (continued)Intellectual Property Risk Trend since last year:No change Issue:The Groups intellectual proper
241、ty is centred around the software solutions and services it develops for customers.Failure to protect,register and enforce(if appropriate)the Groups Intellectual Property Rights could materially impact the Groups future performance.The use of third party contractors within the Groups software develo
242、pment organisation as well as increasing numbers of customers using outsourced partners to operate parts of their finance departments,in addition to the increased utilisation of third party content to provide services to our customers(especially by the Trisus platform),results in a larger number of
243、third parties having access to the Groups Intellectual Property.Mitigating Actions:The Group will continue to register its trademarks and protect access to its confidential information,as appropriate.The Group continues to include appropriate legal protections in its contractual relations with custo
244、mers,suppliers,and employees.There are developed processes and procedures for the management and control of contractors as well as their access to information.The Group would vigorously defend itself against a third-party claim should any arise.The Group also has in place strict physical and data se
245、curity processes and encryption to protect its intellectual property.Regulatory Environment Trend since last year:Increased Issue:The Group operates in an increasingly complex and heavily regulated market environment at both the federal and state levels.This includes very specific requirements and p
246、olicies in dealing with,for example,data privacy,security,labour/employment,anti-kickback statutes,compliance with and operation of the 340B program.This risk is also driven by new state-level data privacy legislation which is coming into play on a rolling basis across the US,in addition to existing
247、 340B and GDPR and HIPAA regulations.The US regulatory environment is driven by three areas of government focus that includes Congressional actions(federal and state),Judicial decisions,and Administration actions.When there is uncertainty in regulatory oversight or a desire for change in policy,it d
248、rives either judicial or congressional engagement or the opportunity for constituents to provide comments to the Administration.In the case of healthcare,there is a current drive to lower drug pricing,create transparency,and reduce the total cost of care.An increasing number of drug manufacturers(37
249、)have been excluding their products from 340B contract pharmacies or placing further data requirements on covered entities in order to alleviate these exclusions.These exclusions are reducing covered entities 340B benefits and,as a result,potentially curtailing their ability to provide services in t
250、heir underserved communities.These restrictions and their implications have led to litigation(which is ongoing)both on and from the manufacturers with the federal government agency Health Resources and Services Administration(HRSA).This is creating uncertainty across the healthcare and pharmaceutica
251、l industries,potentially reducing the funding and support budget that non-profit US healthcare facilities count on through 340B program pricing.Additionally,legislation is ongoing in some states that have enacted protections for their covered entities.The outcome of these actions or any legislation
252、to limit the scope and benefit of 340B could result in a fundamental change(reduction)in potential revenue.Additionally,we continue to monitor the annual changes to the hospital outpatient prospective payment system(OPPS)that is administered by the Centers for Medicare and Medicaid Services(CMS)and
253、any regulatory changes that can impact healthcare reimbursement and payer strategies.The Group operates in both the UK and the US and is therefore exposed to the changes in the political and economic environments of both jurisdictions.Craneware plc|Annual Report&Financial Statements 2024 24 Strategi
254、c Report:Principal Risks and Uncertainties (continued)Regulatory Environment(continued)Mitigating Actions:The Group has a Risk&Compliance Committee,comprised of the Chief Information Officer,Chief People Officer,Chief Financial Officer,Chief Technology Officer,and the Chief Legal Officer to oversee
255、activities and concerns pertaining to the strict regulatory environment.All employees and contractors are required to undertake regular mandatory training in key topics.In addition to utilising external experts in the relevant areas,senior management regularly attend educational events and forums to
256、 keep up to date with evolving regulations.Legislative changes are occurring on a regular basis.The Risk&Compliance Committee,comprising senior management from both countries,oversee activities and concerns pertaining to the strict regulatory environment.The Craneware Group retains two lobbyists to
257、support and advocate for positive changes to the 340B program(340B Matters)as well as keeping Craneware up to date as potential legislation changes.Increased regulatory requirements regarding price transparency has created a market need which The Craneware Group is able to address within its product
258、 and service offerings.US Healthcare:Complexity,Evolution and Reform Trend since last year:Increased Issue:The US healthcare industry,already a complex and highly regulated environment(as more fully detailed separately in the Regulatory Environment risk above),continues to evolve,with a drive for in
259、creased value from healthcare spend and a shift towards consumerisation.The US healthcare market is subject to continual change,which can be implemented by the various participants within the US healthcare market such as insurers and drug manufacturers,and all of which could impact the Groups market
260、 opportunity.Mitigating Actions:The Group has taken steps to ensure it stays at the forefront of how the industry is interpreting current proposals and actions they are taking.It has and it continues to develop significant industry expertise,across revenue cycle and 340B program aspects,at all level
261、s of management including the Board of Directors.It actively promotes developing further experience throughout the wider organisation by,amongst other things:key hires adding to the industry expertise across the Group,both at operational and strategic levels;having independent industry experts atten
262、d and speak at internal and external Company events;regular attendance and speaking engagements by senior management at healthcare forums and industry education events;and customer forums.The Groups Value Cycle strategy,delivering revenue integrity visibility and optimisation as well as 340B program
263、 management,together with the ongoing expansion of the Trisus platform,strengthens our position as a trusted financial performance partner to hospitals.In addition,the Group continues to innovate and develop further new products to meet evolving market needs,such as the ongoing development of the Gr
264、oups new products in the medication area.Our focus on the core themes for data gathering,regardless of reimbursement model,enables Craneware to be flexible in assisting hospitals to run more efficiently and adapt to evolving models.These strategies,in addition to the customer engagement activities o
265、utlined in the ESG Statement,keep the Group at the forefront of industry developments.The reimbursement environment is constantly evolving.While the threat exists and ongoing changes continue to occur,the situation has been ongoing for some time.Healthcare reform is a point of political focus and fl
266、uctuation;reform measures occur in varying directions depending on the political party in power and their success in passing new legislation while in power.Our independence is a compelling and differentiating attribute The Craneware Group is not owned by a health insurance provider or a pharmaceutic
267、al company unlike many organisations providing solutions to US healthcare providers.Craneware plc|Annual Report&Financial Statements 2024 25 Strategic Report:Principal Risks and Uncertainties (continued)Complex Market Dynamics Trend since last year:Increased Issue:The global economic environment con
268、tinues to be uncertain.Factors such as the post-pandemic environment,staffing shortages,inflation,Russias invasion of Ukraine and supply chain issues,along with increased legislation around healthcare and healthcare reform in the US require healthcare organisations to continuously shift in response
269、to the changing environment.The pressure on healthcare providers continues and the drive for increased value from healthcare spend and the shift towards consumerisation remains.Consolidations and the scrutiny around some of those mergers among healthcare providers have increased and there is also co
270、ntinued consolidation around technology service providers.The evolving market in US Healthcare continues to place significant pressure on healthcare providers,which is resulting in ongoing market consolidation.As a result,the Groups market is increasingly dominated by larger hospital networks.Failur
271、e to enhance products,ensure scalability or add to the current product suite could significantly limit the Groups market opportunity and leave it unable to meet its customers evolving needs.Mitigating Actions:Healthcare economies are increasingly challenged in terms of cost relative to outcomes.Prov
272、iders need to adjust to achieve margins that allow them to re-invest in clinical care.The continued move to value-based care is consistent with The Craneware Groups Value Cycle strategy and the ongoing expansion of the Trisus Platform including our 340B product portfolio.The Group continues to innov
273、ate and develop further new products to meet market needs.The Group has taken steps to ensure it stays at the forefront of how the healthcare organisations are interpreting current proposals and the actions they are taking,including continually adding to and developing industry expertise at all leve
274、ls of management including the Board of Directors.Technology Risks Trend since last year:Increased(Note:this risk incorporates Competitive Landscape which was included in the Principal Risks and Uncertainties section of prior year Annual Reports)Issue:With The Craneware Groups solutions being primar
275、ily software,the business is exposed to relatively rapid changes in technology and the risk of falling behind competitors if the Group does not keep pace with the relevant advances in technology,including Artificial Intelligence(AI),and also the general trend for software to become commoditised duri
276、ng its lifecycle.New entrants to the market or increased competition from existing competitors and those with vertical growth strategies could significantly impact the Groups market opportunity.The Group is also expanding its Platform partnership program which will see products developed externally
277、to the Group being hosted on the Trisus platform and as such these products will have some level of access to both the Groups technology and its data.Mitigating Actions:Our data assets and the ability to generate new and innovative products from them strengthens our competitive position.Going forwar
278、d,this is expected to be further enhanced through the new Microsoft alliance providing access to state of the art technologies,especially AI.The Trisus platform continues to evolve and expand,with new modules being released and a growing customer base.The Craneware Group is positioned to deliver a b
279、roader range of solutions,particularly in the medication and pharmacy areas,helping improve revenue and profitability for our customers.The introduction of the Trisus Optimization Suites in FY24 are creating more market relevance.Partners that are provided access to the Trisus platform will be heavi
280、ly vetted and required to meet the compliance standards(such as SOC II or HITRUST)of the rest of the Group.Craneware plc|Annual Report&Financial Statements 2024 26 Strategic Report:Principal Risks and Uncertainties (continued)Technology Risks(continued)Mitigating Actions(continued):The Group continu
281、ally monitors its competitive landscape,including both existing and potential new market entrants.Significant barriers to entry continue to exist,including but not limited to the significant data content built over the Groups history that exists within its products.The Group continues to expand and
282、develop its product portfolio and to ensure its products are platform agnostic and actively seeks partnerships with other healthcare IT vendors.Our longer-term contracts help limit any unexpected customer departures.We also monitor customer satisfaction to ensure delivery of services meets customer
283、expectations.The Groups combined suite of applications and industry-leading team of experts help our customers contextualise operational,financial and clinical data,providing valuable insights and best practice.These value cycle insights deliver revenue integrity and 340B compliance,as well as margi
284、n and operational intelligence something no other single partner can provide.Macro-economic environment Trend since last year:No Change Issue:The Group has significant operations in the UK and,predominantly,the US and is therefore exposed to the changes in the political and economic environments of
285、both as well as relevant aspects of the global environment.The current macro-economic environment has several compounding influences which are resulting in headwinds and challenges for many businesses globally.These factors include(but are not limited to):widening political divide;climate of social
286、instability and industrial actions;relatively high interest rates;cost of living increases and salary inflation pressures;supply chain issues;instability and uncertainties caused by ongoing conflicts.Any worsening of economic conditions could lead to further cost inflation and reduced healthcare bud
287、gets which could impact demand for the Groups solutions and services.Employee retention is a challenge to all businesses.This issue is compounded by the ability to attract talent with specific skillsets and experience.Globally there continues to be a restricted supply of qualified personnel within t
288、he technology sector.There are also associated costs of recruitment,onboarding and training.The potential impact is that we will have a gap in the required resources needed to deliver on our short-term strategic goals.Falling short of these will impact customer contracts and revenue.High levels of a
289、ttrition can have a negative impact on the performance of the business,on customer service and on organisational culture.Mitigating Actions:Macro-economic risks are outside the Groups control,but the Group will continue to focus on ensuring it has effective measures in place to identify and react qu
290、ickly to changes in macro-economic conditions,including robust planning,forecasting and resource allocation procedures.The Groups current financial position includes a strong balance sheet and cash generation.There is regular monitoring of economic trends,review of financial forecasts and scenarios
291、and tracking contract prices.This supports regular forecast updates that allow the Board to monitor the performance of the Group on a timely basis and respond accordingly.The Group has experienced Board members and senior management in both the UK and in the US.There is close monitoring of the infla
292、tionary environment and the impact is assessed by financial modelling.Our long-term contracts with customers often contain annual increases which provide an element of annual increased revenue to offset increasing costs.With operations across both the UK and the US,we are able to recruit from talent
293、 pools in both geographies.We continue to develop and enhance our employee value proposition,specifically the balance between investing in reward and other factors which are important to our employees such as learning and development,employee engagement initiatives and our Dynamic Working Framework.
294、These are outlined in the Environmental,Social and Governance Statement.We conduct monitoring of salary and total compensation structures compared to benchmarks.Regular reviews are performed and benchmark data obtained to understand and manage salary trends.Further monitoring of attrition rates and
295、exit interviews provide insight into the impact on the Group and help to direct actions.Craneware plc|Annual Report&Financial Statements 2024 27 Strategic Report:Principal Risks and Uncertainties (continued)Macro-economic environment(continued)Mitigating Actions(continued):With operations across bot
296、h the UK and the US,we are able to recruit from talent pools in both geographies.We continue to develop and enhance our employee value proposition,specifically the balance between investing in reward and other factors which are important to our employees such as learning and development,employee eng
297、agement initiatives and our Dynamic Working Framework.These are outlined in the Environmental,Social and Governance Statement.We conduct monitoring of salary and total compensation structures compared to benchmarks.Regular reviews are performed and benchmark data obtained to understand and manage sa
298、lary trends.Further monitoring of attrition rates and exit interviews provide insight into the impact on the Group and help to direct actions.Treasury Risks Trend since last year:No Change(Note:this risk incorporates Compliance with debt finance facility covenants and Banking Environment which were
299、included as separate risks in the Principal Risks and Uncertainties section of the prior year Annual Report)Issues:Cash management risks There is an acknowledged expanding risk,in general for companies,from internally and externally perpetrated fraud in relation to payments processing and/or transfe
300、r of funds,with wider scale use of electronic communications and documentation,use of Artificial Intelligence and remote working arrangements.The Craneware Group reconciles and disburses customer cash as part of services provided by the Group in connecting them to their contract pharmacy network,in
301、conjunction with healthcare partners.Counterparty risks The financial services industry,and notably banking,have faced significant challenges in recent years that have led to increased risk impacting cashflow and lending products.Industry risks exist with increased threats of security breaches,exace
302、rbated by global conflicts and national tensions.Compliance with debt finance facility covenants As part of the funding for the acquisition of Sentry,the Group entered into debt facility arrangements which provide up to$140m of secured funding.This secured committed debt facility,comprises a term lo
303、an and a revolving credit facility.Details of these borrowings are provided in Note 20 to the financial statements.The loan agreements require specific bank covenants and quarterly reporting to ensure compliance with the conditions of the loan facilities.If the covenants were breached,the lenders co
304、uld take action against the Group.This could include the lenders using their security over the Groups assets to repay the outstanding debt,thus adversely impacting shareholders.It is necessary that the borrowings are appropriately managed to ensure the Group continues meet all obligations as they fa
305、ll due,to ensure the Group has sufficient headroom to execute on our strategy and to deliver returns for our shareholders.Mitigating Actions:Cash management risks Internal controls including authorisation protocols,segregation of duties and reconciliations are in place and kept under review in addit
306、ion to executive supervision of financial risk management considerations and policies and procedures.Counterparty risks Insurance measures,to the extent commercially available,are already in place along with good relationships with a number of financial institutions allows the Groups cash reserves b
307、eing“spread”across multiple banks.Craneware plc|Annual Report&Financial Statements 2024 28 Strategic Report:Principal Risks and Uncertainties (continued)Treasury Risks(continued)Mitigating Actions(continued):Counterparty risks(continued)We continue to implement process improvements,including increas
308、ing visibility on high-value contracts which result in significant payments into a single account.Insurance measures have also been reviewed to ensure as effective coverage as is possible.As noted below,in addition to scheduled term loan repayments,the Group is actively reducing the cash reserves it
309、 holds through offsetting the revolving loan facility balance whilst maintaining the available facility therefore the Groups cash on its balance sheet has been reduced by offsetting the revolving facility.Compliance with debt finance facility covenants There is regular monitoring of financial inform
310、ation across the organisation,including monitoring of compliance with the loan covenants.The forecasting process enables evaluation of projected financial information against the bank covenant requirements and this is kept under review.We retain regular and detailed dialogue with our lenders and the
311、se relationships continue to be supportive.The Group benefits from high levels of recurring revenues leading to strong cash generation which is improving levels of headroom against the borrowing facilities and reducing leverage.The Groups loan facility is provided by a broad and supportive banking s
312、yndicate and the business is operating well within the loan covenants.The Group has paid down some of the revolving facility and continues to allocate any excess cash to reduce the balance.The loan facility has been drawn down to the extent of$120m of which$35.4m was outstanding at 30 June 2024($83.
313、0m at 30 June 2023)comprising a$16m term loan and a$20m revolving loan facility($24m term loan and$60m revolving loan at 30 June 2023).These facilities are due to expire on 30 June 2026 and on 7 June 2026 respectively.Emerging Risks Emerging risks are newly developing risks that cannot yet be fully
314、assessed but that could,in the future,affect the viability of our strategy.In addition to known risks,we are consistently reviewing and re-assessing other emerging risks and the need for mitigation,as well as reporting to the Board,as part of our existing risk management processes.These processes in
315、clude the identification of relevant internal and external factors and are designed to capture those emerging risks which are current and those that will impact future years.Climate Change The Group is aware that,for all businesses,the profile and therefore impact of climate-related risks are likely
316、 to change not just in terms of physical impacts but also as a result of evolving government policy to enable transition to low carbon economies.Climate change has both immediate effects and progressive,long-term effects on the risk profile of all businesses.In the short-term there is an increasing
317、frequency of extreme weather events(wind/rain/flood);this may lead to significant changes in certain costs,including but not limited to taxation e.g.on emissions.In addition to any physical impacts,Governments may seek to introduce new regulations in this area to accelerate the transition to a low c
318、arbon economy.The profile and therefore impact of climate-related risks are set to alter as government policy evolves.The actions required to reduce carbon usage and to mitigate the impacts of climate change may be wide-ranging,resulting in an increase in operational costs or capital expenditure.Cli
319、mate-related risk considerations,including governance arrangements,are disclosed within the Groups Non-Financial and Sustainability Information Statement.The nature of Cranewares operations,i.e.not manufacturing or transporting goods,means its environmental impact is relatively low compared with oth
320、er sectors and our overall risk from climate change is assessed as low.However,all businesses,including Craneware,must recognise the importance of responding appropriately and to act responsibly in reducing their contribution to global climate change.Also,as the size of the Group grows,we are consci
321、ous of the impact our operations may increasingly have Craneware plc|Annual Report&Financial Statements 2024 29 Strategic Report:Principal Risks and Uncertainties (continued)Emerging Risks(continued)Climate Change(continued)on the environment.Craneware aims to manage its environmental impacts respon
322、sibly and this is further outlined within the Environmental,Social and Governance Statement.In regard to specific risks to Craneware;existing resilience plans include mitigation strategies for extreme weather events;energy costs are a relatively small proportion of the Groups costs and likely regula
323、tory interventions are seen as manageable;and a significant proportion of our employees are home-based and we already rely on video conferencing technology,thereby reducing our travel requirements.The Group also remains cognisant of the significant reputational risk if it does not continue to respon
324、d appropriately to global climate change.Viability Statement In accordance with the UK Corporate Governance Code,the Directors have considered the viability of the Group over the three-year period from 30 June 2024.Considerations that impact this assessment include the Groups current financial posit
325、ion,including the addition of the bank facility and other available financial resources,the Groups SaaS business model as outlined within the Strategic Report,the Groups strategic initiatives,the financial forecasts,the Groups cost base and annual forecast.The current economic climate has remained l
326、argely stable over the previous year which has been reflected in the forward view of the model.Modest increases in revenue alongside cost increase greater than inflation provide a cautious base case against which viability has been assessed.In addition,the directors assessed the current banking faci
327、lities and the Groups ability to satisfy the terms and covenants of the loan agreements,effective from July 2024.The Directors also considered several other factors including the Groups risk management and internal control effectiveness and the principal risks and uncertainties and their likelihood
328、of occurrence within the period of assessment.The Directors consider that three years is an appropriate period for this assessment as it corresponds with the outlook used internally and for strategic planning.The SaaS business model with its underlying long-term contracts(as described earlier in the
329、 Strategic Report),high levels of associated cash generation and long-term focus on customer success provides a foundation of revenue for future years.This foundation of contracted revenue forms the basis of the scenarios considered by the Directors in making this assessment,including a scenario whi
330、ch envisages no revenue growth.The Directors confirm that they have a reasonable expectation that the Group will be able to withstand the impact of this severe adverse scenario,should this occur during the three-year assessment period.The Directors have therefore considered,in making this assessment
331、,the Groups current financial position and future prospects and have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period from 30 June 2024.However,future assessments of the Groups prospects are naturally s
332、ubject to uncertainty that increases with time and therefore future performance cannot be guaranteed.Craneware plc|Annual Report&Financial Statements 2024 30 Strategic Report:Environmental,Social and Governance(ESG)Introduction ESG Committee Chairs Introduction Our three ESG Focus Areas(outlined bel
333、ow)are founded on our Purpose and continued to guide our ESG initiatives and actions through FY24.At the very heart of our ESG endeavours are our customers and communities.We are honoured as a team at The Craneware Group to be able to support and enable our customers to provide quality care to their communities through the profound impact our solutions deliver.This social impact is substantial.In
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