Source - LSE Regulatory
RNS Number : 7257F
Cerillion PLC
22 May 2017
 

22 May 2017

AIM: CER

 

Cerillion plc

("Cerillion" or "the Company" or "the Group")

Interim results for the six months ended 31 March 2017

 

Cerillion, the billing, charging and customer relationship management software solutions provider, today issues its interim results for the six months ended 31 March 20171.

Highlights

 

·     Continuing encouraging progress

 

·     Revenue up by 10% to £7.5m (2016: £6.9m)

-    helped by strong growth in software revenue2, up 47% to £4.1m

-    services revenue contributed £3.1m

 

·     Recurring revenue3 accounted for 29% of total revenues at £2.2m (2016: £2.2m)

 

·     Strong level of new orders, up by 37% to £9.4m (2016: £6.9m) - a record for any six-month period

 

·     Back order book4 up by 11% to £14.7m (2016: £13.3m) - a record level

 

·     Adjusted profit before tax up by 31% to £0.9m1 (2016: £0.7m)

 

·     Adjusted earnings per share up by 25% to 2.8p5 (2016: 2.3p)

 

·     Net cash as at 31 March 2017 stood at £1.1m 

 

·     Interim dividend increased by 8% to 1.4p (2016: 1.3p)

 

·     Major new contracts included:

-     $2.8m follow-on contract with major customer in the Americas

-     €3.3m contract with a new, quad-play customer in Europe

-     €2.4m contract with a new, wholesale customer in Europe

 

·     Group remains well positioned for further progress

 

Louis Hall, CEO of Cerillion, commented:

"We have made pleasing progress over the period, delivering increased profitability, in line with management expectations. Our core enterprise software business secured significant new orders, including two new customer wins, as well as a major follow-on contract with an existing customer. These new wins, combined with our back order book which stands at a record high, will help to underpin the Group's ongoing performance.

With a strong level of contracted sales in place, the Board anticipates further progress over the second half and believes that Cerillion remains well positioned to meet its expectations for the full year."

 

 

Notes

 

1 Cerillion plc acquired Cerillion Technologies Limited on 18 March 2016 in conjunction with the completion of its IPO on AIM.  Prior to 18 March 2016, Cerillion plc had no trading activity.  Consequently, the results referred to in these highlights and in the Chairman and Chief Executive Officer's Report are based on the consolidated figures for the Cerillion Technologies Limited Group, prepared under United Kingdom Generally Accepted Accounting Principles, which includes Cerillion Technologies Limited and its subsidiaries (Cerillion (India) pvt and Cerillion Inc). Interim Financial Information for Cerillion plc is included in Appendix 1.

2 Revenue derived from software licence, support and maintenance sales.

3 Recurring revenue includes annualised support and maintenance, managed service and Skyline revenue.

4 Back order book consists of £10.4m of sales contracted but not yet recognised at the end of the reporting period plus £4.3m of annualised support and maintenance revenue.  It is anticipated that 70% of the £10.4m of sales contracted but not yet recognised as at the end of the reporting period will be recognised within the next 4 to 5 quarters.

5 Based on earnings for Cerillion Technologies Limited for the reporting period and the total number of Cerillion plc shares in issue as at 31 March 2017.

 

 

 

For further information please contact:

 

Cerillion plc

Louis Hall, CEO

Oliver Gilchrist, CFO

 

c/o KTZ Communications

T: 020 3178 6378

 

 

 

Shore Capital (Nomad and Broker)

 

T: 020 7408 4090

Bidhi Bhoma

Toby Gibbs

 

 

 

 

 

KTZ Communications

 

T: 020 3178 6378

Katie Tzouliadis

Emma Pearson

 

 

 

 

 

 

About Cerillion

 

Cerillion is a leading provider of mission critical software for billing, charging and CRM, with a 17 year track record in providing comprehensive revenue and customer management solutions. The Company has 80 customer installations across 42 countries, principally serving the telecommunications market.

 

The Company is headquartered in London and also has operations in Pune, India, Miami and Sydney.

 

 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REPORT

Overview

 

Cerillion continues to make very encouraging progress and the financial results for the six months ended 31 March 2017 reflect this.  Revenue is up by 10% to £7.5m, helped by strong software revenue sales, and adjusted profit before tax is up by 31% to £0.9m, in line with management expectations. New orders secured in the period were also strong, rising by 37% to £9.4m, a new high for a six month period.

The Company remains well positioned for the second half of the year and we continue to work on a strong pipeline of new customer opportunities. 

Financial Overview

 

For the six months to 31 March 2017, the Group's total revenue rose by 10% to £7.5m (2016: £6.9m), helped by strong growth in software revenues2, which increased by 47% to £4.1m (2016: £2.8m) and accounted for 54% of total revenue (2016: 41%).  This significant increase reflected both the level of new software licence sales as well as the growth in the customer base.

Services revenue contributed £3.1m (2016: £3.7m) and made up 41% of total revenue (2016: 53%). Third party income was stable at £0.4m (2016: £0.4m) and accounted for 5% of total revenue (2016: 6%).

Established customers (those acquired at least 12 months before the beginning of the reporting period) typically generate a high proportion of the Group's income and, in the first half, established customers generated 79% of total revenue (2016: 78%). Recurring revenue, from support and maintenance and managed service contracts, was broadly flat at £2.2m (2016: £2.2m) and accounted for 29% of the Group's income (2016: 32%). 

As expected, overhead costs increased to £4.1m (2016: £3.8m), reflecting the expansion in resource, with personnel costs higher at £2.5m (2016: £2.3m).

Increased revenues largely drove the significant rise in adjusted operating profit, which was 40% higher at £1.0m (2016: £0.7m). The charge for amortisation of R&D costs was £0.4m (2016: £0.2m).

Adjusted profit before tax rose by 31% to £0.9m (2016: £0.7m) and adjusted earnings per share increased by 25% to 2.8p5 (2016: 2.3p).

The Group ended the period with increased net assets of £12.9m (2015: £12.1m) of which £5.3m was cash (2016: £6.5m).

Cash Flow and Banking

Net cash as at 31 March 2017 stood at £1.11m, reflecting cash at £5.25m and debt at £4.14m (2016: £5m).  The Company generated net cash from operations of £1.825m in the six month period to 31 March 2017.

Expenditure on capitalised R&D was in line with the prior period at £0.3m as we continued to invest in product development to enhance our intellectual property. Expenditure on fixed assets was £0.075m (2016: £0.1m), resulting in free cash generation of £1.45m in the period.  This was utilised to pay the final dividend of £0.8m declared in respect of the year ended 31 December 2016 and to repay £0.4m of the £5m term loan taken up in conjunction with the AIM IPO, £0.9m has now been repaid since the IPO (2016: nil).  

Dividend

 

The Board is pleased to declare an interim dividend of 1.4p per share.  This represents an 8% increase on the prior year's interim dividend of 1.3p per share.  The interim dividend will become payable on 22 June 2017 to those shareholders on the Company's register as at the close of business on the record date of 2 June 2017.  The ex-dividend date is 1 June 2017.

As previously stated, the Board intends to pay out between a third to a half of the Group's free cash flow as dividends each year, subject to the Group's performance. 

Operational Overview

The Company's admission to AIM in March 2016 has enhanced Cerillion's market positioning and, later in the year, in November 2016, we were also pleased to see Cerillion designated in the "Visionaries" quadrant of Gartner's report*, "Magic Quadrant for Integrated Revenue and Customer Management (IRCM) for CSPs".  In the prior year, in 2015, Cerillion was positioned in the "Niche Players" quadrant.  Gartner evaluated both our core Cerillion Enterprise suite, the Company's pre-integrated BSS/OSS solution, as well as Cerillion Skyline, our Software-as-a-Service (SaaS) billing and subscription management solution. 

We were pleased with the progress the Group made over the first half.  We secured new orders worth a total of £9.4m (2016: £6.9m) for our enterprise CRM and billing platform.  This included the three major wins we previously announced, which were: a $2.8m contract with an existing customer in the Americas; a €3.3m agreement with new customer, Scarlet, a  Belgian virtual network operator, owned by Proximus, which provides fixed and mobile telephony services to the residential market; and a €2.4m contract with a new wholesale customer in Europe. 

It is worth highlighting that our real-time Convergent Charging System ("CCS") helped to secure these major wins.  CCS is a key differentiator as it enables telecoms operators and service providers to converge prepaid and postpaid billing for fixed and mobile services on a single platform, a key goal. The solution extends our coverage into prepaid as well as postpaid applications and is particularly relevant to the faster growing mobile and mobile data sectors.

The new order wins resulted in an 11% (or £1.4m) increase in our back order book4 to a record high of £14.7m (2016: £13.3m) and will help to drive implementation projects over the coming quarters.  In addition to this, we are currently bidding on a range of strong opportunities and hope to convert a number of these.

We also saw an encouraging uptick in the Cerillion Skyline's pipeline.  This still nascent part of the business leverages Cerillion's sophisticated billing capability - developed for the telecoms market place - to open up opportunities in other sectors.  Our solution is a completely new cloud billing application which enables service providers of all sizes to access the same powerful billing capabilities that could previously only be afforded by large companies with significant resources.

Our new operations, in Miami and Australia, support our existing activities in these regions and are helping to drive new customer opportunities. 

Outlook

The strong level of new orders won in the first half is very encouraging and will help to underpin ongoing growth in the second half of the year and beyond.  Accordingly, the Board looks forward to reporting on further progress and believes that Cerillion remains well positioned to meet its expectations for the full year.

 

Louis Hall, Chief Executive Officer

Alan Howarth, Chairman

 

Notes:

1 Cerillion plc acquired Cerillion Technologies Limited on 18 March 2016 in conjunction with the completion of its IPO on AIM.  Prior to 18 March 2016, Cerillion plc had no trading activity.  Consequently, the results referred to in these highlights and in the Chairman and Chief Executive Officer's Report are based on the consolidated figures for the Cerillion Technologies Limited Group, prepared under United Kingdom Generally Accepted Accounting Principles, which includes Cerillion Technologies Limited and its subsidiaries (Cerillion (India) pvt and Cerillion Inc).  Interim Financial Information for Cerillion plc is included in Appendix 1.

2 Revenue derived from software licence, support and maintenance sales.

3 Recurring revenue includes annualised support and maintenance, managed service and Skyline revenue.

4 Back order book consists of £10.4m of sales contracted but not yet recognised at the end of the reporting period plus £4.3m of annualised support and maintenance revenue.  It is anticipated that 70% of the £10.4m of sales contracted but not yet recognised as at the end of the reporting period will be recognised within the next 4 to 5 quarters.

5 Based on earnings for Cerillion Technologies Limited for the reporting period and the total number of Cerillion plc shares in issue as at 31 March 2017.

 

 

*Gartner Report

 

Gartner Magic Quadrant for Integrated Revenue and Customer Management for CSPs by Norbert J Scholz, Jouni Forsman, Amresh Nandan, 17 October 2016.  Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.  The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of these Accounts) and the opinions expressed in the Gartner Report(s) are subject to change without notice.
 

Proforma Consolidated Income Statement*

for the six months ended 31 March 2017

 

 

 

 

 

2017

 

2016

 

 

 

 

£

 

£

 

 

 

 

 

 

 

Revenue

 

 

 

7,544,199

 

6,853,228

 

 

 

 

 

 

 

Cost of sales

 

 

(1,921,620)

 

(1,897,375)

 

 

 

 

 

 

 

Gross profit

 

 

5,622,579

 

4,955,853

 

 

 

 

 

 

 

Admin expenses

 

 

(4,119,064)

 

(3,827,182)

 

 

 

 

 

 

 

EBITDA

 

 

 

1,503,515

 

1,128,671

 

 

 

 

 

 

 

Depreciation & amortisation

 

(518,838)

 

(427,166)

 

 

 

 

 

 

 

Operating profit

 

 

984,677

 

701,505

 

 

 

 

 

 

 

Financial expenses

 

 

(61,585)

 

(1,198)

 

 

 

 

 

 

 

Financial income

 

 

1,523

 

3,167

 

 

 

 

 

 

 

Profit before tax

924,615

 

703,474

 

 

 

 

 

 

 

Tax

 

 

 

(95,807)

 

(38,716)

 

 

 

 

 

 

 

Profit for period

 

 

828,808

 

664,758

 

 

*Cerillion plc acquired Cerillion Technologies Ltd on 18 March 2016 in conjunction with the completion of its IPO on AIM.  Prior to 18 March 2016, Cerillion plc had no trading activity.  Consequently, this Pro-Forma Consolidated Income Statement is based on the consolidated figures for the Cerillion Technologies Limited Group, which includes Cerillion Technologies Ltd and its subsidiaries (Cerillion (India) pvt and Cerillion Inc). 

 

 

 

 

 

 

Appendix 1:  Cerillion plc Interim Financial Information

Unaudited Consolidated Statement of Comprehensive Income8

for the six months ended 31 March 2017

 

£

Consolidated

Unaudited

half year to

31 Mar 2017

Consolidated

Unaudited

half year to

31 Mar 2016

Consolidated

Audited

year to

30 Sep 2016

Continuing operations

 

 

 

Revenue

7,544,199

411,117

8,364,774

Cost of sales

(1,921,620)

(141,461)

(2,262,699)

Gross profit

5,622,579

269,656

6,102,075

Operating expenses

(4,837,357)

(266,683)

(4,923,584)

 

 

 

 

Operating profit before exceptional transaction costs

785,222

2,973

1,178,491

Exceptional transaction costs

-

(826,783)

(746,055)

Operating profit/(loss)

785,222

(823,810)

432,436

Finance costs

(61,584)

(57)

(199,559)

Finance income

1,523

3,728

6,059

Profit/(loss) before tax

725,161

(820,139)

238,936

Taxation

(1,488)

-

68,032

Profit/(loss) for the period

723,673

(820,139)

306,968

Other comprehensive income

 

 

 

Exchange differences on translating foreign operations

 

5,203

 

-

 

145,913

Total comprehensive profit/(loss) for the period

 

728,876

 

(820,139)

 

452,881

 

All transactions are attributable to the owners of the parent.

 

 

 

 

Basic and diluted profit/(loss)  per share

 

 

 

from continuing operations

2.45 pence

(6.2) pence

1.3 pence

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 Comparatives for FY2016 do not include a full year of results of the subsidiary companies as the Group was only formed from the date of acquisition, being 18 March 2016.
 

Unaudited Condensed Consolidated Statement of Changes in Equity

as at 31 March 2017

 

£

Share capital

Share premium

Foreign exchange reserve

Retained earnings

Total Equity

 

 

 

 

 

 

Balance at 1 October 2015

15,660

-

-

(580,500)

(564,840)

Loss for the period

-

-

-

(820,139)

(820,139)

Total comprehensive income

-

-

-

(820,139)

(820,139)

Shares issued

131,907

13,318,725

-

-

13,450,632

Balance at 31 March 2016

147,567

13,318,725

-

(1,400,639)

12,065,653

 

 

 

 

 

 

Profit for the period

-

-

-

1,127,107

1,127,107

Exchange difference on translating foreign operations

-

-

145,913

-

145,913

Total comprehensive income

-

-

145,913

1,127,107

1,273,020

 

Dividends

-

-

-

(383,675)

(383,675)

Balance at 30 September 2016

 

147,567

 

13,318,725

 

145,913

 

(657,207)

 

12,954,998

Profit for the period

-

-

 

723,673

723,673

Exchange difference on translating foreign operations

-

-

5,203

-

5,203

Total comprehensive income

-

-

5,203

723,673

728,876

Dividends

-

-

-

(767,349)

(767,349)

Balance at 31 March 2017

147,567

13,318,725

151,116

(700,883)

12,916,525

 

 

 

Unaudited Condensed Consolidated Balance Sheet8

as at 31 March 2017

 

£

 

Unaudited

Note

Consolidated

Unaudited 31 Mar 2017

Consolidated

Unaudited

31 Mar 2016

Consolidated

Audited

30 Sep 2016

Assets

 

 

 

 

Non-current

 

 

 

 

Goodwill

 

2,053,141

1,973,141

2,053,141

Intangible assets

 

6,689,066

6,949,814

6,979,370

Property, plant and equipment

 

363,584

400,799

411,505

Deferred tax

 

320,282

363,394

320,546

 

 

9,426,073

9,687,148

9,764,562

 

 

 

 

 

Current assets

 

 

 

 

Trade receivables

 

3,245,899

2,927,708

2,894,015

Other receivables

4

6,342,830

4,426,179

6,270,857

Cash and cash equivalents

 

5,254,523

6,454,430

5,006,185

 

 

14,843,252

13,808,317

14,171,057

 

 

 

 

 

Total assets

 

24,269,325

23,495,465

23,935,619

 

 

 

 

 

Equity and liabilities

 

 

 

 

Shareholders' equity

 

 

 

 

Called up share capital

 

147,567

147,567

147,567

Share premium account

 

13,318,725

13,318,725

13,318,725

Foreign exchange reserve

 

151,116

-

145,913

Retained loss

 

(700,883)

(1,400,639)

(657,207)

Total Equity

 

12,916,525

12,065,653

12,954,998

 

 

 

 

 

Liabilities

 

 

 

 

Non-current

 

 

 

 

Borrowings

 

3,138,111

4,000,000

3,572,602

Other non-current liabilities

 

1,186,486

1,440,465

1,400,805

 

 

4,324,597

5,440,465

4,973,407

 

 

 

 

 

Current liabilities

 

 

 

 

Trade payables

 

651,254

919,162

336,684

Other payables

4

5,376,949

4,070,185

4,670,530

Borrowings - current

 

1,000,000

1,000,000

1,000,000

 

 

7,028,203

5,989,347

6,007,214

 

 

 

 

 

Total equity and liabilities

 

24,269,325

23,495,465

23,935,619

 

 

Unaudited Condensed Consolidated Cash Flow Statement

for the six months ended 31 March 2017

 

£

Consolidated

Unaudited half year to 31 Mar 2017

Consolidated

Unaudited

half year to

31 Mar 2016

Consolidated

Audited

 year to

30 Sep 2016

Operating activities

 

 

 

Reconciliation of profit to operating cash flows

 

 

 

Profit/(loss) for the period

723,673

(820,139)

306,968

Add back:

 

 

 

Taxation

1,488

-

(68,032)

Depreciation

127,988

9,157

142,695

Amortisation and impairment

590,304

17,927

571,555

Finance costs

61,584

57

199,559

Finance income

(1,523)

(3,728)

(6,059)

 

1,503,514

(796,726)

1,146,686

(Increase)/ decrease in trade and other receivables

(423,857)

45,119

(1,765,866)

Increase/ (decrease) in trade and other creditors

868,989

(106,823)

(101,524)

Cash from/(used in) operations

1,948,646

(858,430)

(720,704)

Finance costs

(61,584)

(57)

(72,981)

Finance income

1,523

3,728

6,059

Tax paid

(63,543)

-

(30,511)

Net cash flows generated from/(used in) operations activities

1,825,042

(854,759)

(818,137)

 

 

 

 

Investing activities

 

 

 

Acquisition of subsidiary undertakings, net of cash

and overdrafts acquired

-

(11,129,200)

(11,129,200)

Capitalisation of development costs

(300,000)

-

(601,111)

Purchase of property, plant and equipment

(74,496)

(27,084)

(136,993)

Net cash flows used in investing activities

(374,496)

(11,156,284)

(11,867,304)

 

 

 

 

Financing activities

 

 

 

Issue of ordinary share capital

-

13,450,632

13,450,632

Borrowings repaid

(434,492)

-

(427,398)

Borrowings received

-

5,000,000

5,000,000

Dividends paid

(767,349)

-

(383,675)

Net cash flows (used in)/generated from financing activities

(1,201,841)

18,450,632

17,639,559

 

 

 

 

Net increase/ (decrease) in cash and cash equivalents

248,705

6,439,589

4,954,118

Translation differences

(367)

-

37,226

Cash and cash equivalents at beginning of period

5,006,185

14,841

14,841

Cash and cash equivalents at end of period

5,254,523

6,454,430

5,006,185

 

Unaudited Notes

1.   Basis of Preparation and Accounting Policies

The condensed financial information is unaudited and was approved by the Board of Directors on 19 May 2017.

The Company is a public limited company, which was incorporated in England and Wales on 5 March 2015. The address of its registered office is 125 Shaftesbury Avenue, London, WC2H 8AD. The interim financial information for the six months ended 31 March 2017 has been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU). The interim financial information for the six months ended 31 March 2017 has been prepared under the historical cost convention.

The interim financial information for the six months ended 31 March 2017 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and no statutory accounts have been prepared, audited or filed with the Registrar of Companies in England and Wales since incorporation.

The preparation of the interim financial information for the six months ended 31 March 2017 in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Statements and the reported amounts of revenues and expenses during the period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

There is no material difference between the fair value of financial assets and liabilities and their carrying amount.

The functional and presentational currency is UK Sterling.

2.   Going concern

The Directors have assessed the current financial position of the Group, along with future cash flow requirements, to determine if the Group has the financial resources to continue as a going concern for the foreseeable future. The conclusion of this assessment is that it is appropriate that the Group be considered a going concern. For this reason the Directors continue to adopt the going concern basis in preparing the interim financial information for the six months ended 31 March 2017. The interim financial information does not include any adjustments that would result in the going concern basis of preparation being inappropriate.

3.   Basis of consolidation

The consolidated financial information incorporates the financial information of the Company and entities controlled by the Company (its subsidiaries) at 31 March 2017. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefit from its activities.

Except as noted below, the financial information of subsidiaries is included in the consolidated financial statements using the acquisition method of accounting.  On the date of acquisition the assets and liabilities of the relevant subsidiaries are measured at their fair values.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

 

4.   Other receivables and other payables

 

 

Unaudited

31 Mar 2017

£

Unaudited

31 Mar 2016

£

Audited

30 Sep 2016

£

Other receivables

 

 

 

 

Amounts recoverable on contracts

Prepayments

 

5,756,101

128,620

3,768,810

154,195

5,565,952

240,405

Other receivables

 

458,109

503,174

464,500

 

 

6,342,830

4,426,179

6,270,857

Other payables

 

 

 

 

Taxation

 

131,714

121,444

99,714

Other taxation and social security

 

195,150

462,880

255,876

Pension

 

39,262

41,493

38,653

Accruals

Deferred income

 

1,168,903

3,173,884

820,909

2,055,623

1,729,473

1,972,192

Ubisense loan

 

240,000

240,000

120,000

Derivative financial instrument

Other payables

 

-

428,036

-

327,836

121,410

333,212

 

 

5,376,949

4,070,185

4,670,530

 

 

5.   Availability of this announcement

This announcement together with the financial statements herein and a presentation in respect of the interim financial results are available on the Group's website, www.cerillion.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR GGUGCAUPMGAB
Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.