Cerillion swings to interim loss but remains optimistic on full year

The management software provider recorded a loss before tax of £0.7m for the six-month period ended 31 March, as opposed to a profit of £0.5m for the same period last year, as revenue dipped by 17% to £7.0m.

The AIM traded company said that the drop in sales reflected the timing of major contract closures, though a contract worth $8.3m was signed in February 2019 with a US-based telecoms provider and additional major contracts, worth over £10m, are in final stage negotiations.

The back order book remained strong at £15.4m, unchanged from a year earlier, while the company increased its interim dividend by 7% to 1.6p.

Louis Hall, chief executive of Cerillion, said: "Cerillion's offering in the marketplace remains very strong. In February 2019, we secured one of the company's largest contracts to date and, in the same month, the company was ranked in the Visionaries quadrant of Gartner's latest Magic Quadrant report on leading business support system vendors. The second half has started well, and we look forward to continuing our track record of steady year-on-year revenue and earnings growth."

For the current year, the board believe that Cerillion remains well-positioned to achieve its full-year performance targets of steady revenue and earnings growth, thanks to the company's "strong" business pipeline, adding that it was in the last phase of negotiations for two high value opportunities alongside other opportunities where the company is at the shortlisted stage.

Analysts from Shore Capital said that Cerillion's new business pipeline is "very encouraging" after signing some of the largest contracts in its history, including a major win in the first half with a leading regional US telecoms provider.

"Importantly, the quality and size of the new contracts that are either won or under negotiation is indicated to have improved. Skyline’s annualised run rate at the end of the first half had more than doubled on the year albeit it from a low base, and the company expects further growth in the second half," said the analysts.

Cerillion's shares were down 0.09% at 141.88p at 1101 BST.