Cerillion LON:CER the London-based software company published its results today (18th November) for the year ending 30th September.
The AIM-listed company offers software that manages billing, charging and customer relationship management for telecommunications firms, but has also started to diversify into energy and utilities.
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The company appears to have had a strong twelve-months. Revenues are up 12% to GBP43.8m and recurring revenue up 11% to GBP15.5m, an important bellwether for software companies. Earnings came in at GBP20.7m, up from GBP18.1m this time last year. Profit before tax was GBP19.8m, an 18% increase in profitability year-on-year.
Cerillion’s adjusted EPS was 52.2p, up 13% y-o-y and management declared total dividend per share of 13.2p, up 17% y-o-y. The company had GBP29.9m of cash on hand. Cerillion opened trading for the week at 1.955.5p, up 52.8% over one-year and up 22% year-to-date. The company has a market capitalization of GBP555m.
Cerillion’s records broken in terms of profit and revenue
This year broke records for Cerillion, having the best profit and revenue figures it’s had in 25-years. New orders have been flowing into the software firm, up 21% to GBP39.1m, another record-breaker, and orders have been coming in from across the globe from the Republic of Ireland to South Africa, with a sales pipeline of GBP262m.
Although globally telecom companies have been spending less, it seems that they want to extract more revenue from their customers. This has led to a demand for enhanced payment and billing software, with the rise in demand for SaaS (software as a service) products continuing to grow, as companies concentrate on their core functions and outsource back-end software services to third parties. With a very strong pipeline of potential new business opportunities, Cerillion is well-positioned to make further progress in the new financial year and its management team remain confident about prospects.
Louis Hall, Cerillion’s chief executive said in a statement to the market: “Revenue, pre-tax profit, and the new customer sales pipeline all reached new highs. Two major new customer wins in the year as well as orders from the existing customer base also helped to drive total new orders to a record level of GBP38.1m.”
Chocolate-box approach to delivery
Cerillion was founded just before the millennium in 1999 (so proving that YTK-compliance was something the world was getting over-anxious with at the time) and has developed software packages that manage retail payments and charges for telecoms and utility companies on an end-to-end basis. The company has a chocolate-box approach to delivery This allows its customers to take an aspect of its billing software off the shelf and bolt it onto their own payments back-end, or take the entire white-labelled product suite as their own payments-processing solution.
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Cerillion champions this out-of-the-box approach over other bespoke designed payments systems, and you can understand why. A bespoke solution, although to some management teams considered a bit of a feather in the cap, are traditionally more expensive to design and maintain, as they need constant updating by external or internal developers (good work if you can get it for a software developer), which can take time. Moreover, the risk of failure is often higher as the nature of a business’ payments may change over time and the software might not keep up in a real-time dynamic way.
Cerillion’s core suite
Cerillion instead has a core suite of products, developed centrally, which its developers can constantly work on and improve and then revise through scheduled updates delivered remotely – a bit like Microsoft Windows. The centralisation lowers cost, as all the developers are in a fixed location working on improving and updating the core product, as opposed to working remotely and out-of-synch on different systems.
Cerillion, although based in London, also has offices in India, Bulgaria, Singapore and Australia and has customers in more than 45 countries. It moved to new and larger offices in Bulgaria to deal with increased customer demand. The company has been a member of AIM for about eight-years and over that period has delivered a sustainable record of revenue and profit growth.
Hall said: “[Cerillion] remains well-positioned to make further progress over the new financial year, with a healthy back-order book and strong new customer sales pipeline. We will continue to invest across the business, supported by our strong balance sheet, rising levels of recurring income and good cash flows. We view the future with confidence.”
