Cerillion plc (LON:CER) is the topic of conversation when Darren Turgel, DirectorsTalk CEO, caught up with Ciaran Donnelly, Technology & Media Analyst at Liberum Equity Research, to discuss Cerillion’s annual results for the 12 months ended 30 September 2022.
Q1. Cerillion plc has provided its annual results for the period ended 30 September 2022, what were the key takeaways investors should note?
A1. Cerillion reported revenue growth of +26%; second consecutive year of >20% revenue growth. Cerillion delivered better than expected profitability, with adj. EBITDA margin of 42.0% (+170bps yoy). Record figures in back order book and pipeline point to a positive outlook for the business. Cerillion has a healthy balance sheet with a net cash position of £20.2m.
Q2. What were your thoughts on the level of contracts and back order book?
A2. Cerillion reported record figures in back order book and its pipeline of new business opportunities. Cerillion’s pipeline of potential new business has increased to a record £209m, +43% yoy. Similar to the pipeline, Cerillion reported a record back order book of £45.4m at the end of FY22, +8% yoy.
Q3. How do you see the outlook for the company and new customer pipeline?
A3. The outlook statement reads very positively for Cerillion’s future prospects. The company’s outlook points to the expectations that it will continue to grow strongly, and that the Cerillion brand is gaining visibility in what is a huge marketplace. Cerillion is well positioned to deliver another strong performance in FY23, supported by a record order book. The new customer sales pipeline is also at a record high and contains large deal opportunities
Q4. How do you see the company in terms of fair value?
A4. Cerillion’s shares are trading on a CY23E P/E of c.32x and its positive prospects support a premium rating.
Cerillion plc is a leading provider of billing, charging and customer management systems with more than 20 years’ experience delivering solutions across a broad range of industries including the telecom, finance, utilities and transport sectors. Cerillion has established a reputation as a leading provider of Telcom software solutions supporting fixed wire, mobile, broadband and TV communications service providers (CSPs). Cerillion is attractive for both capital growth and dividend income investing having consistently paid a dividend every year since its IPO in 2016.
