Cerillion Q&A: Great visibility with more contract wins expected (LON:CER)

Cerillion plc (LON:CER) Chief Executive Officer Louis Hall caught up with DirectorsTalk for an exclusive interview to discuss what the company does, key highlights from the latest updates, the new three-year contract with Scarlet and what investors should expect going forward.

Q1: Louis, could you just explain to our listeners what it is that Cerillion actually does?

A1: We provide a pre-integrated suite of enterprise software modules to telecoms network operators and service providers across the world supporting most core telecoms functions such as:

  • Onboarding and managing customers leads and prospects with our CRM module,
  • Connecting those customers to telecoms network operators network through our network bridging module,
  • Managing the usage of those services by those customers on the networks through our real time charging module,
  • Generating bills, managing accounts receivables, collecting payments etc through our billing module
  • Specialist functions such as our network inventory module which enables telco’s to manage their network infrastructure.

Q2: It sounds like you offer an end-to-end solution to companies?

A2: Yes, absolutely, in fact one of our USP’s is our software modules are designed and built to work together to provide a very broad end-to-end solution covering the vast majority of functions that a telco needs to support.

Q3: Mid-October, you provided a trading update followed by full year results. What were the key highlights in those updates?

A3: In the final results that we published in November, we were very pleased to see record highs across all of our key financial measures including revenue, PBT and back order book. In fact, our back order book increased by 41% which puts us in a great position in terms of visibility for achieving financial ’21 forecasts.

Also, very pleased to see that our recurring revenue in terms of the annual run rate at year-end had actually increase by 58% and again, that’s really important for us in terms of having much greater visibility of forward-looking projection.

Q4: Mid-November, you announced a new three-year managed services contract with Scarlet, can you explain what they do and how you’re helping them?

A4: Scarlet is a MVNO virtual network operator, operating in Belgium, and is a wholly-owned subsidiary of Proximus which is a very large Belgium full service network operator.

Essentially, Scarlet was launched as a challenger brand to support their consumer low cost market and we were brought in to implement a new charging and billing platform for Scarlet. Having got that into service back in December, Scarlet is seeing rapid growth, they have over 1 million customers connected and there was a need for us to provide a more comprehensive service as well as just the software and support of that software.

So, this is enabling us to operate the system for Scarlet and provide them with that end-to-end wrap around and enables them to focus on their business priorities whilst we focus on the IT operations.

Q5: Just looking forward through 2021, what should investors or potential investors be looking out for in terms of news flow from Cerillion?

A5: I think we would expect to see some new customer announcements, today we have around 90 customer across about 45 countries and it’s important, obviously, we keep growing that customer base so we would expect to see some contract wins.

I think we also expect to see contract wins that include managed services similar to the services that we recently sold to Scarlet. There’s an increasing trend as we move forward in securing more Software as a Service type business where we’re providing not just the software but the hosting of that software, typically in the cloud, but also the operations of that software. So, we’d expect to see more of that.

We’d also expect to see announcements around significant amounts of new business with existing customers because the majority of our revenue each year comes from our existing customer base and typically, that’s around 75% -80%.

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