Cerillion hails record first half, shares rally

Shares in Cerillion surged nearly 12% in morning trading on Monday after the software firm said it was on track to meet its full-year targets following a record first half.

The AIM-listed firm said revenues in the six months to 31 March had risen 26% to £12.8m, while new orders rocketed by a record 148% to £23.6m.

Adjusted earnings before interest, tax, depreciation and amortisation jumped 77% to £4.8m, while pre-tax profits came in at £3.3m, compared to £1.2m a year previously.

Looking to the rest of the year, Cerillion - which also upped its divided by 20% to 2.10p - noted: "Existing major implementation projects and the strong back order book leave Cerillion very well-positioned to achieve its full-year targets.

"The expanded pipeline of new business will also support continuing revenue and earnings growth. The board therefore remains confident of future prospects this year and beyond."

The back order book rose 74% during the six months to £42.1m as at 31 March, the highest ever.

Chief executive Louis Hall said: "Over the last three quarters, we have signed two of the largest contracts in the company’s history. This reflects the strength of our solutions and services capability, our increasing market profile and the significant investments being made by telecommunications providers in infrastructure and systems."

As at 1100 BST, shares in Cerillion were 11.5% higher at 670.0p.

Canaccord Genuity said: "Even excluding the largest ever contract, at around £13m, the order bank is around £29m, or still up 20% year-on-year.

"We believe new order intake in the second half could be very low indeed and still achieve our numbers. The main risk remains execution, but historically this has been exemplary and the statement comments on continued building on the team in the UK and India to satisfy the enlarged contract base."

Canaccord, which has a ‘buy’ rating on the stock, upped its price target to 665p from 575p.