TIDMCER
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 2017(1) .
Highlights
-- Continuing encouraging progress
-- Revenue up by 10% to GBP7.5m (2016: GBP6.9m)
- helped by strong growth in software revenue(2) , up 47% to GBP4.1m
- services revenue contributed GBP3.1m
-- Recurring revenue(3) accounted for 29% of total revenues at GBP2.2m (2016: GBP2.2m)
-- Strong level of new orders, up by 37% to GBP9.4m (2016:
GBP6.9m) - a record for any six-month period
-- Back order book(4) up by 11% to GBP14.7m (2016: GBP13.3m) - a record level
-- Adjusted profit before tax up by 31% to GBP0.9m(1) (2016: GBP0.7m)
-- Adjusted earnings per share up by 25% to 2.8p(5) (2016: 2.3p)
-- Net cash as at 31 March 2017 stood at GBP1.1m
-- 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
- EUR3.3m contract with a new, quad-play customer in Europe
- EUR2.4m 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 GBP10.4m of sales contracted but
not yet recognised at the end of the reporting period plus GBP4.3m
of annualised support and maintenance revenue. It is anticipated
that 70% of the GBP10.4m 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 c/o KTZ Communications
Louis Hall, CEO T: 020 3178 6378
Oliver Gilchrist, CFO
Shore Capital (Nomad and T: 020 7408 4090
Broker)
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 GBP7.5m, helped by strong software
revenue sales, and adjusted profit before tax is up by 31% to
GBP0.9m, in line with management expectations. New orders secured
in the period were also strong, rising by 37% to GBP9.4m, 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 GBP7.5m (2016: GBP6.9m), helped by strong growth in
software revenues(2) , which increased by 47% to GBP4.1m (2016:
GBP2.8m) 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 GBP3.1m (2016: GBP3.7m) and made up
41% of total revenue (2016: 53%). Third party income was stable at
GBP0.4m (2016: GBP0.4m) 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 GBP2.2m (2016: GBP2.2m) and
accounted for 29% of the Group's income (2016: 32%).
As expected, overhead costs increased to GBP4.1m (2016:
GBP3.8m), reflecting the expansion in resource, with personnel
costs higher at GBP2.5m (2016: GBP2.3m).
Increased revenues largely drove the significant rise in
adjusted operating profit, which was 40% higher at GBP1.0m (2016:
GBP0.7m). The charge for amortisation of R&D costs was GBP0.4m
(2016: GBP0.2m).
Adjusted profit before tax rose by 31% to GBP0.9m (2016:
GBP0.7m) and adjusted earnings per share increased by 25% to
2.8p(5) (2016: 2.3p).
The Group ended the period with increased net assets of GBP12.9m
(2015: GBP12.1m) of which GBP5.3m was cash (2016: GBP6.5m).
Cash Flow and Banking
Net cash as at 31 March 2017 stood at GBP1.11m, reflecting cash
at GBP5.25m and debt at GBP4.14m (2016: GBP5m). The Company
generated net cash from operations of GBP1.825m in the six month
period to 31 March 2017.
Expenditure on capitalised R&D was in line with the prior
period at GBP0.3m as we continued to invest in product development
to enhance our intellectual property. Expenditure on fixed assets
was GBP0.075m (2016: GBP0.1m), resulting in free cash generation of
GBP1.45m in the period. This was utilised to pay the final dividend
of GBP0.8m declared in respect of the year ended 31 December 2016
and to repay GBP0.4m of the GBP5m term loan taken up in conjunction
with the AIM IPO, GBP0.9m 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 GBP9.4m (2016:
GBP6.9m) 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 EUR3.3m
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 EUR2.4m
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 GBP1.4m) increase in
our back order book(4) to a record high of GBP14.7m (2016:
GBP13.3m) 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 GBP10.4m of sales contracted but
not yet recognised at the end of the reporting period plus GBP4.3m
of annualised support and maintenance revenue. It is anticipated
that 70% of the GBP10.4m 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
GBP GBP
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 Income(8)
for the six months ended 31 March 2017
GBP Consolidated Consolidated Consolidated
Unaudited Unaudited Audited
half year half year year to
to to 30 Sep
31 Mar 31 Mar 2016
2017 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
GBP Share Share Foreign Retained Total
capital premium exchange earnings Equity
reserve
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 Sheet(8)
as at 31 March 2017
GBP Consolidated Consolidated Consolidated
Unaudited Unaudited Unaudited Audited
Note 31 Mar 31 Mar 30 Sep
2017 2016 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
GBP Consolidated Consolidated Consolidated
Unaudited Unaudited Audited
half half year year
year to to
to 31 31 Mar 30 Sep
Mar 2017 2016 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 Unaudited Audited
31 Mar 31 Mar 30 Sep
2017 2016 2016
GBP GBP GBP
Other receivables
Amounts recoverable
on contracts 5,756,101 3,768,810 5,565,952
Prepayments 128,620 154,195 240,405
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 1,168,903 820,909 1,729,473
Deferred income 3,173,884 2,055,623 1,972,192
Ubisense loan 240,000 240,000 120,000
Derivative financial
instrument - - 121,410
Other payables 428,036 327,836 333,212
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
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