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Cerillion boosted by buoyant software revenue growth and improved margins

Revenue and pre-tax profit came in at £16mln and £2.5mln respectively
Billing graphic
While management didn’t provide quantitative guidance, earnings quality augurs well for fiscal 2018

Shares in Cerillion PLC (LON:CER), the billing, charging and customer relationship management software solutions provider, rose 8% after it delivered a solid set of prelims and gave an upbeat assessment of prospects. 

The results featured revenue growth of 8.3%, and while profitability rose by a similar proportion there was a significant improvement in margins with the underlying earnings margin up by 22.6%.

Revenue and pre-tax profit came in at £16mln and £2.5mln respectively. Importantly, recurring revenues increased by nearly 10%.

Cerillion declared a final dividend of 2.8p per share, bringing the total dividend for the year to 4.2p per share, up almost 8% on the year earlier.

Hall highlights increased software revenues

In response to this development, Louis Hall, CEO of Cerillion said he was pleased that the company had continued to make strong progress, highlighting that this was not just attributable to the substantial rise in software revenues, but also the progress made with margins, aided by licence extensions with existing customers.

The company has continued to generate significant revenues from its existing customer base, as well as securing additional contracts.

Hall is of the view that Cerillion’s inclusion in the 'Visionaries' quadrant of the Gartner Magic Quadrant for Integrated Revenue and Customer Management for CSPs for the second year in a row is an indication of the quality of the group’s offering and the importance we place on customer service.

In terms of the company’s outlook, Hall said, "As we go into the 2018 financial year, we remain very positive about prospects for Cerillion's continuing progress, underpinned by a strong pipeline of prospects across EMEA, Asia Pacific and Americas."

While management didn’t provide quantitative guidance for fiscal 2018, given improvements in recurring revenues and margins investors should be buoyed by the news.

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