Cerillion plc (LON:CER) Interim results presentation by CEO Louis Hall and CFO Andrew Dickson.
The presentation covers the following key points:
Company Overview: Cerillion provides mission-critical enterprise software for telecom businesses globally. Their software helps monetize network assets through customer onboarding, product creation, usage management, billing, and receivables management. They offer their solutions on a SaaS basis, differentiating themselves in a traditionally tailored solutions market.
Market Size and Competition: The telecom enterprise software market (BSS/OSS) is estimated to be around $60 billion annually, with a 3.5% CAGR. Cerillion competes with large independent software vendors, network equipment vendors, smaller ISVs, and newer SaaS vendors, highlighting their competitive advantage in faster time to market and lower total cost of ownership.
Barriers to Entry: Significant R&D investment, domain expertise, and credibility are crucial barriers. Cerillion’s long track record and strong customer references are vital in a market where software failure can directly impact telecom services.
Financial Performance:
- Revenue and Profit: Revenue increased by 10% to £22.5 million, with adjusted PBT up 14% to £10.5 million. The company has a strong track record of revenue growth and high margins.
- Cash and Orders: Net cash increased to £26.6 million, and new orders rose by 32% to £20.2 million. The backorder value stands at £47.1 million, with a good visibility of future revenue.
- Recurring Revenue: The recurring revenue run rate is £15 million, reflecting managed services and support maintenance.
- Dividends: Increased by 21% to 4 pence per share, demonstrating confidence in financial stability.
Operational Highlights:
- R&D Investment: 6,000 man-days spent on R&D focused on AI support for product creation and business processes, digital experience tools, and AI-enhanced software development.
- Geographical Expansion: New subsidiaries in Bulgaria and Singapore, with increased staff presence in North America, Central Europe, and Asia Pacific contributing to pipeline growth.
- Project Completions: Successful project completions in Seychelles and Suriname.
Outlook: The company is optimistic about future growth, with a record pipeline of new customer logos and strong market demand for SaaS offerings. They expect to continue meeting market expectations with a strong balance sheet and robust operational strategies.
