Cerillion Plc Reports Mixed H1 Results, Sees Stronger Second Half
Why we think this is neutral
The trading update from Cerillion Plc presents a mixed picture. While the company's net cash position has improved, there are some concerning signs in the financial performance. The decline in revenue and EBITDA, along with the company's high valuation, suggest potential headwinds. However, the management's commentary on the anticipated stronger second half performance and the company's strong new customer pipeline provide some positive signals. Overall, the trading update paints a balanced picture, with both positive and negative factors to consider.
Key Points
- Revenue expected to be c. £20.9m, down from £22.5m in the prior year
- Adjusted EBITDA expected to be c.£10.0m, compared to £11.0m in the prior year
- Net cash position increased to approximately £31.0m, up from £26.6m a year earlier
- New customer pipeline remains very strong and a little ahead of last year's record level
- Supported by a major new contract win, a term renewal with a major European customer, and a significant migration programme
Summary
Cerillion Plc, the billing, charging and customer relationship management software solutions provider, has reported a mixed trading update for the first six months of its current financial year.
Revenue is expected to be c. £20.9m, down from £22.5m in the prior year period, reflecting the anticipated higher weighting of software licence renewals/extensions to the second half of FY 2025. Adjusted EBITDA is expected to be c.£10.0m, compared to £11.0m in the prior year.
However, the company's net cash position has increased to approximately £31.0m, up from £26.6m a year earlier, further strengthening the company's balance sheet. The company also notes that its new customer pipeline remains very strong and a little ahead of last year's record level.
The company remains confident in meeting market expectations for the current financial year and beyond, supported by a number of factors, including a major new contract win, a term renewal with a major European customer, and a significant migration programme expected to benefit revenues in both the current and next financial year.