Cerillion confident despite lower first-half revenue, profit

(Sharecast News) - Cerillion said on Monday that it remained on track to meet full-year market expectations, despite lower first-half revenue and profit, after new orders more than doubled and its back-order book reached a record level.

The billing, charging and customer relationship management software provider reported revenue of £18.0m for the six months ended 31 March, down 14% from £20.9m a year earlier.

Adjusted EBITDA fell 38% to £6.2m, while adjusted profit before tax declined 41% to £5.5m.

Cerillion said the first-half performance reflected the timing of new orders from both new and existing customers, with minimal high-margin software licence revenue recognised during the period.

It said material software licence revenue was expected to be recognised in the second half.

New orders rose 102% to £39.6m from £19.6m, helped by the company's largest-ever contract win, secured in the second quarter.

The back-order book increased 64% to a record £82.1m at the end of March, from £50.2m a year earlier.

Annualised recurring revenue rose 5% to £19.1m, while net cash increased 4% to £32.5m. Cerillion lifted its interim dividend by 15% to 5.5p per share.

The company said its new customer sales pipeline rose 4% to a record £271m, even after the closure of a £42.5m contract with Omantel, Oman's main national telecoms operator.

The five-year subscription contract, signed in January, covers fixed, mobile, broadband and TV services.

Cerillion said the requirements phase of the Omantel project had been completed and that configuration and integration work was now under way.

Implementation work for Ucom, Armenia's leading telecommunications provider, was also progressing well, with initial delivery phases completed and cutover scheduled for the autumn.

The company said its latest product release, Cerillion 26.1, included Agent2Agent capabilities, enabling communications services providers to move from siloed automation to coordinated multi-step process execution across systems.

Chief executive Louis Hall said the Omantel contract marked "a significant milestone in the ongoing development of the business".

"Not only does it add a prestigious new customer, but it is a further proof-point for our product-centric model, a very valuable reference for similar scale new business and a catalyst for further opportunities in the Middle East," he said.

Hall said the current year's results would be "very significant" weighted to the second half, but added that the company was well placed to deliver market expectations, based largely on business already under way and anticipated new orders from existing customers.

"Looking further ahead, demand remains strong and our pipeline of opportunities with both new and existing customers is very healthy," he said.

"We therefore continue to view long-term prospects with confidence."

At 1031 BST, shares in Cerillion were down 3.21% at 1,355p.

Reporting by Josh White for Sharecast.com.

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