Cerillion Plc (LON:CER) has delivered a steady and reassuring update shown in the latest research note from Cavendish, highlighting the resilience of its business model despite some short term timing effects. The software provider, which specialises in billing, charging and customer relationship management solutions, continues to demonstrate solid underlying demand and growing long term visibility.
The latest trading update, covering the six months to 31 March 2026, shows a business that remains firmly on track. While headline numbers reflect a softer first half, Cavendish is clear that this is largely a matter of timing rather than demand. As Research Analyst Andrew Darley explains, “Performance highlights a continuation of the well-established investment case, near-term earnings shaped by contract timing, while underlying demand and longer-term visibility continue to strengthen.”
Understanding the 1H and 2H Split
At first glance, Cerillion’s first half performance may appear subdued. Revenue came in at £18.0m, down 14% year on year, while EBITDA declined by 38% to £6.2m. However, this reflects the timing of high margin licence revenue rather than any deterioration in trading conditions.
As outlined in the research note, this phasing is expected to reverse in the second half. Large contracts, including the recently secured Omantel deal, are set to contribute more significantly later in the year. This supports expectations for a much stronger second half performance.
Importantly, Cavendish has maintained its forecasts, signalling confidence in the overall trajectory of the business.
Strong Order Intake Builds Confidence
One of the most encouraging aspects of the update is the surge in new orders. Cerillion reported order intake of £39.6m in the first half, more than double the £19.7m achieved in the same period last year. This reflects both strong demand and the impact of larger contract wins.
The Omantel contract, described as the largest in the company’s history, is particularly significant. It underpins management’s confidence in future growth and reinforces Cerillion’s ability to secure high value, long term agreements.
As noted in the report, the expanding order book provides clear forward visibility. The back order book, which stood at £56.9m at the last full year, continues to support revenue expectations into the second half of 2026 and beyond.
Financial Strength and Operational Resilience
Cerillion’s balance sheet remains a key strength. The company reported £32.5m in unencumbered cash, giving it flexibility to invest and adapt as needed. This financial stability supports both strategic decision making and shareholder confidence.
The research also highlights the company’s ability to manage operational challenges effectively. For example, potential concerns around geopolitical disruption in Oman have been mitigated, with implementation work continuing as planned. Remote delivery capabilities, proven during the COVID period, add further resilience.
Key Financial and Operational Highlights
- 1H revenue of £18.0m, reflecting timing of licence revenue
- EBITDA of £6.2m in the first half
- Order intake doubled to £39.6m year on year
- Back order book providing strong forward visibility
- Net cash position of £32.5m
- Forecast revenue expected to reach £54.0m in FY26 and £60.8m in FY27
- Adjusted EPS forecast at 60.2p for FY26, rising to 66.9p in FY27
These figures, supported by the data tables on page 1 and page 2 of the report, underline the strength of Cerillion’s medium term outlook.
Long Term Growth Remains Intact
Cerillion’s business model, centred on multi year licence agreements, naturally leads to some variability in revenue recognition. However, this also creates a strong foundation for long term growth, as contracts renew and expand over time.
Cavendish notes that seasoned followers of the company will be familiar with this pattern. The increasing size of contracts and the consistent growth in order intake suggest that momentum is building rather than slowing.
With a target price of 2200p maintained, implying significant upside from current levels, the broker’s stance remains firmly positive.
On a Final Note
Cerillion’s latest update reinforces the strength of its underlying business. While short term revenue phasing may create some noise, the bigger picture remains one of growing demand, strong order momentum and clear visibility. Backed by a robust balance sheet and a pipeline of large contracts, the company appears well positioned to deliver on expectations in the periods ahead.
