Cerillion plc (LON:CER), a leading provider of billing, charging, and customer management systems, remains firmly on an upward trajectory, even as short-term revenue phasing impacts the first half of its 2025 financial year. In their latest research note, Panmure Liberum maintains a confident outlook on the company, highlighting its strong fundamentals and future opportunities.
The note, authored by research analyst Andrew Ripper, underscores Cerillion’s resilience and strategic progress. “The good news in April’s trading update is the intention of an existing European customer to use Cerillion’s software to support a recently acquired tier 1 customer base, which should be a meaningful contributor from 2H25,” Ripper states.
While the trading update showed a slight dip in first-half figures—with expected revenues of £20.9m and EBITDA of £10m compared to £22.5m and £11m respectively in 1H24—this is primarily due to the timing of licence renewals and extensions, now weighted towards the second half. The analysts expect EBITDA in 2H25 to climb to £11.7m.
A highlight of the update is the announcement of a potential major expansion through a European customer, speculated to be Denmark’s Norlys, which recently acquired a significant mobile customer base. This could result in a notable uptick in revenue and margin from the second half of the year onwards.
Additionally, Cerillion has secured a US$11.4m five-year contract in the Caucasus region, with revenue recognition likely in 2H25. Combined with £5.4m in renewals from another European client, the outlook remains bullish.
Despite a 26% drop in share price year-to-date, largely attributed to macroeconomic factors affecting the AIM market, Panmure Liberum sees this as a buying opportunity for quality-focused investors. “Cerillion continues to offer a best-in-class combination of organic growth and margin, has a track record of winning v market leader Amdocs and smaller ISVs and is gaining credibility as it delivers software to larger clients over time,” Ripper explains.
Valued at 15.6x EV/EBITDA for CY25E and trading at a discount to peers such as Sage, Cerillion is positioned as an attractive investment. Panmure Liberum has set a target price of 2000p, suggesting substantial upside from the current level of 1300p.
In Summary
With robust financials, strategic contract wins, and strong customer relationships, Cerillion remains a standout in the UK software space. Investors looking for quality growth stories should take note of Panmure Liberum’s renewed optimism and long-term view.
