Cerillion shares climb after software sector improves earnings outlook on steady and continued demand
- The London-based company announced record interim results earlier this year
- Cerillion said full-year revenue would be just “slightly ahead” of forecasts
- Liberum and Singer Capital Markets have raised their price targets for the company
Shares of Cerillion soared today after the group told investors that full-year profits would significantly exceed previous expectations thanks to strong and sustained trading.
The software provider now estimates its FY2022 adjusted pre-tax profits will be “significantly ahead” of market forecasts of £10.1m, while revenue will be just “slightly ahead” of forecasts. expectations.
After posting record interim results earlier this year, the London-based company noted that demand had remained very healthy since early April, partly due to a strong order book.
Upgrade: Software provider Cerillion now estimates its FY2022 adjusted pre-tax profits will be ‘significantly ahead’ of market forecast of £10.1m
Cerillion won its biggest-ever deal in the fourth quarter, a decade-long deal with an unnamed telecoms client worth an estimated £15million.
He also said his performance benefited from a more favorable exchange rate, lower net finance costs, and lower than expected depreciation and amortization.
Cerillion shares jumped 8.2% to £11.25 on Monday, making it one of the top 25 risers in the AIM junior market.
Over the past 12 months, their value has climbed 28.4%, but has risen more than sixteen times since it floated on the London Stock Exchange six years ago at a modest placement price of 76 pence.
“The pipeline of new business opportunities, from both existing and potential new customers, remains vibrant and the company is well positioned as it enters the new financial year,” the London-based company noted.
Brokers Liberum and Singer Capital Markets both raised their price targets and maintained their buy recommendations for Cerillion.
Founded in 1999 as a spin-off from the former IT consultancy Logica, Cerillion provides billing, invoicing and customer management systems software to businesses in various industries and dozens of countries.
Major customers include private security giant G4S, mobile service provider Three and New Delhi-based Bharti Airtel, India’s second-largest mobile network operator.
In the six months to March 31, the group said its revenue rose 26% year-on-year to £16.1m, while its pre-tax statutory profit jumped 72% to £5. £.7 million.
Even though the value of large new orders fell significantly, its new customer sales pipeline grew by almost a third to £172m.
Gross margins were also maintained at a high level thanks to Cerillion’s decision to open a new office in Sofia, Bulgaria, and to expand its activities in India, two countries where average personnel costs are lower.
Announcing the half-year results, Louis Hall, the company’s founder and chief executive, said, “We see great opportunities for continued growth, and the new customer sales pipeline has grown significantly.
“Given the progress of the business and its strong financial and operational position, we continue to view the outlook very positively.”