Cerillion plc (LON:CER) Chief Executive Officer Louis Hall caught up with DirectorsTalk to discuss interim results, record new orders, the £42.5 million Omantel contract, and confidence in the longer-term pipeline.
Q1: Louis, just going through the results, could you just talk us through the key features from those results?
A1: I think the big point for us is that we’ve managed to more than double new orders from £20 million to £40 million during the period end, and that’s our largest ever new orders total in any six-month period to date. That was driven to a large extent by the big contract win with Omantel that we announced earlier in the year, starting in January.
On top of that, we’ve been able to push our back-order book up 64% to £82 million, which is another record. So, that all bodes well for the future.
We do have some quite unusual phasing of revenue in H1 so we’re anticipating the year to be heavily weighted towards H2. That’s largely a result of a lot of licence revenue, which we can recognise in H2, and not a lot in H1. That has a bigger effect, if you like, on what we’ve done, and the margins of the licence revenue is highly profitable. Cash was also up 4% to £32.5 million.
So, along with the new customer pipeline being up again, we’re very happy with these results.
Q2: Cerillion signed, as you mentioned, your largest ever contract in January with Omantel, that was worth £42.5 million. Could you just tell us some of the key highlights of the new contract?
A2: So, this is a large, all-inclusive deal where we are essentially supplying pretty much all of our software modules to Omantel to support all of their services across fixed, mobile, broadband, and that’s for about 3.5 million customers.
Omantel are the dominant telco in Oman, and this is a substantial implementation. We’re then providing that platform as a service over the next five years so once implemented, this is a five-year term deal.
We expect that to be a lighthouse account within the region to enable us to win more business in the Middle East on the back of this being a success.
Q3: The customer pipeline is up to a new high and that’s after the Omantel win. Presumably this underpins your confidence about longer-term prospects for the group?
A3: So, as I mentioned before, the new customer sales pipeline increased to £271 million, up a little bit, despite taking out the £42.5 million Omantel deal, which was won in the period.
That shows that we’re able to replace those larger deals in our pipeline with other significant potential prospects and I think that does give us confidence looking forward into ’27, ’28, and on the turn.
These are contracts that take a long time to come to fruition so it’s very important we always have a significant pipeline of potential new wins, in order to ensure that the future remains rosy.
