Cerillion PLC (AIM:CER) shares fell 7.3% to 1,325p as investors focused on the pronounced second-half revenue weighting flagged in its latest trading update.
The company reported net new first-half orders of £39.6 million, more than double the £19.6 million recorded in the same period a year earlier, driven primarily by the £42.5 million contract awarded by Omantel, a Tier-1 Omani telecoms operator with £6.5 billion in annual revenues, in January 2026.
However, all three brokers noted that very little high-margin software revenue is recognised in the first half, leaving around two-thirds of full-year 2026 forecast revenue to be booked in the second half, with first-half revenue coming in at £18 million, down 14% year on year.
Management has reiterated full-year expectations and said Omantel will contribute significantly in the second half, including recognition of the licence fee, supporting consensus forecasts of £24 million full-year EBITDA.
Unperturbed by market nerves, Peel Hunt, Cavendish and Panmure Liberum all reiteratied 'buy' recommendations on the billing and customer management software company
Cavendish described the Omantel deal as the largest contract in Cerillion's history, while Peel noted that it displaced much larger incumbents, including Optiva, NEC/Netcracker and Huawei following an extensive competitive process, validating both the company's product depth and its ability to execute at a materially larger scale.
Panmure said the win demonstrates Cerillion's ability to convert larger new logo customers and that the pipeline remains strong, adding that any share price weakness on first-half guidance should be regarded as a buying opportunity given the company's potential to double in size over the medium term.
Peel forecasts total licensing revenue approximately 20% above the prior year level of £10.3 million, and sees full-year revenue reaching £52.7 million.
Cavendish pointed to a robust back-order book, last reported at £56.9 million at the full year, as providing visibility into the second half and beyond, and noted that the company's £32.5 million net cash position supports board confidence.
At around 24 times calendar year 2026 forecast earnings, Cerillion sits mid-range against a peer group trading on 16 to 29 times, with Peel expecting a re-rating towards the top quartile as deal sizes scale and earnings visibility improves.
Cavendish has a 2,200p target price; Peel Hunt's stands at 2,020p; Panmure's at 2,000p.