Introduction

Cerillion plc (LSE:CER) is a UK-based provider of billing, charging and customer-relationship-management software, primarily for the telecommunications industry. With a 25-year track record supplying mission-critical systems to operators around the world, Cerillion (CER) has built a reputation for high margins, strong Revenue/">Recurring Revenue and disciplined growth. A record order intake, a growing Backlog and a generous Dividend increase have underscored its standing as one of AIM’s quality software businesses.

Why Cerillion (CER) is in focus now

Cerillion (CER) is in focus after reporting record new orders, a rising back-order book and exceptionally high margins, alongside a substantial dividend increase. The strength of order intake provides visibility over future revenue, an important consideration for a software Business reliant on winning and delivering large, multi-year contracts. With major implementation projects completed and recurring revenue growing strongly over time, Cerillion has reinforced its position as a high-quality, cash-generative name.

Business overview

Cerillion provides software for billing, charging, customer relationship management and related functions, used by telecommunications operators and other service providers to manage their customers and revenue. Its systems are mission-critical, meaning customers rely on them for core operations, which supports long-term, sticky relationships and recurring support and maintenance revenue. Cerillion combines large implementation projects with ongoing support, and has a 25-year track record in the sector. Its model generates high margins and a growing base of recurring income.

Latest Earnings explained

For its 2025 financial year, Cerillion reported total new orders up about 25% to around £48m, although revenue growth was more modest at about 4%, reflecting the timing of contract delivery. The company achieved an EBITDA Margin of around 50.9%, underlining the profitability of its software model. The back-order book increased to about £56.5m, comprising roughly £46.9m of contracted but not-yet-recognised sales plus about £9.6m of annualised support and maintenance revenue. Recurring revenue has grown at a compound annual rate of about 21% over five years, a key indicator of the durability of the business.

Revenue, profit, margins, Cash Flow and Balance Sheet

Cerillion’s financial profile is notably strong: EBITDA margins of around 50.9% are exceptional and reflect the scalability of its software. While revenue grew only about 4%, the 25% rise in new orders and the larger back-order book point to stronger future revenue visibility. The company increased R&D Investment by about 30%, with around 17,500 days spent on Research and Development, supporting its product and competitiveness. Cerillion is typically highly cash-generative with a strong balance sheet, supporting both investment and a rising dividend, and its growing recurring revenue adds stability.

What management said

Management highlighted the record order intake and the growth in the back-order book as evidence of strong Demand and improving revenue visibility. Commentary emphasised the company’s investment in R&D and the strength of its recurring revenue, which has compounded at around 21% over five years. The completion of major implementation projects, including a Tier 1 environment with Virgin Media Ireland and a project with Paratus in Southern Africa, was presented as demonstrating Cerillion’s ability to deliver complex, mission-critical systems. The dividend increase reflected confidence in the company’s cash generation.

Latest news and announcements

Recent developments include the record new orders of around £48m, the increased back-order book of about £56.5m, the 17% dividend increase to 15.4p per share, and the completion of major projects with Virgin Media Ireland and Paratus. The company’s continued investment in R&D and the growth of its recurring revenue base are recurring themes. Investors watch for new contract wins, which are central to sustaining the order book and future revenue.

Share-price performance and market reaction

Cerillion (CER) shares have traded around 1,230p. The shares have generally been valued for the company’s high margins, strong recurring revenue and consistent delivery, which support a premium rating. As a software business reliant on winning large contracts, the shares can be sensitive to the timing of order intake and revenue recognition, and to sentiment towards software and the telecoms-technology sector. The record orders and rising backlog have been supportive, though the premium valuation means expectations are high.

Growth drivers

The principal growth drivers for Cerillion (CER) are continued strong order intake and the conversion of its back-order book into revenue, growth in recurring support and maintenance income, and the winning of new contracts with telecoms operators globally. Investment in R&D supports the competitiveness of its products, while the mission-critical nature of its software underpins long-term customer relationships. Expansion into new geographies and customers, and the structural need for operators to modernise their billing and CRM systems, provide further opportunities.

Key risks for investors

Cerillion faces risks including the lumpiness of large contract wins, which can make revenue and order intake uneven from period to period. Reliance on the telecommunications sector exposes it to that industry’s spending cycles and consolidation. The premium valuation means the shares could be vulnerable if growth or order intake disappoints. Implementation projects carry execution and delivery risk. Competition in telecoms software is significant, including from larger vendors. Currency movements affect international contracts, and customer concentration on large deals is a consideration.

Dividend position

Cerillion (CER) is a progressive dividend payer, having increased its dividend by about 17% to 15.4p per share for the full year, supported by its high margins and strong cash generation. The combination of dividend growth and a high-quality, recurring-revenue business model adds an income element to the investment case, although the Yield is modest given the premium rating. The rising dividend reflects management’s confidence in the durability of the company’s cash flows.

Outlook for the next 6–12 months

Over the next 6–12 months, the focus will be on converting the record order book into revenue, sustaining strong order intake through new contract wins, and maintaining the company’s high margins. Investors will watch for new deals, progress on implementation projects, and growth in recurring revenue. The timing of large contracts will influence reported performance. Continued demand from telecoms operators for modern billing and CRM systems would support the outlook.

Investor takeaway

Cerillion (CER) is a high-margin, cash-generative telecoms-software business with record orders, a growing backlog, strong recurring revenue and a rising dividend. The investment case rests on converting its order book into revenue and sustaining order intake, balanced against the lumpiness of large contracts, telecoms-sector exposure and a premium valuation. This article is for information only and is not financial advice; investors should do their own research.

 

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