Cerillion plc (LON:CER) Chief Executive Officer Louis Hall caught up with DirectorsTalk for an exclusive interview to discuss key features from FY results, marketplace, two major contract wins, maintaining R&D levels in 2025, and longer term prospects.
Q1: Louis, can you just take me through the key features from today’s results?
A1: We are very pleased to see new highs across all the key financial measures. In particular, adjusted PBT up 18% to a record £19.8 million and total new orders up 21% to a record £38.1 million. We also saw our new customer sales pipeline grow by 8% to 262 million.
All in all, we are very pleased with that turnout.
Q2: Now, the telecom market is huge. Can you comment on your marketplace and the potential for the business?
A2: Recently, one of the analysts in our space estimated the market to be between £60-70 billion annually. Clearly, us reporting revenue at our levels, we have a very small market share at the moment so the potential to grow into that huge space is enormous so we are very buoyed by that and see that as a great opportunity.
I think the more time goes on, the more of the market is moving towards our SaaS, software-as-a-service, approach to deploying these complex enterprise solutions. So, I think we have a lot to gain going forward.
Q3: Now, you’ve won two major contracts wins this year. Why do you think Cerillion was selected as opposed to one of your competitors?
A3: So, in one case, it was a straight choice between the much more tailored services-heavy solution offered by one of our competitors that was the incumbent and our commercial off-the-shelf, one-size-fits-all, straight-out-of-the-box product solution that is much quicker to deploy and has a much lower TCO. But also, importantly, it gives customers much more autonomy to be able to build new product packages themselves, to build new workflow themselves, and all of those things so having a much lighter vendor touch.
In the second case, it was a case of needing a solution that could consolidate quite a broad range of connectivity services that the customer in Southern Africa provides, such that they could present all those to the customer across one single platform Also, obviously, internally, have much lower costs and be able to manage those services on a single platform.
Q4: Now, you increased investment in R&D to circa 13,000 days, from around 11,000 last year. Do you expect to maintain this level of R&D in FY25 and what are the major areas of focus?
A4: So, I think R&D is crucial to us continuing to evolve as a business, and whilst we don’t need to dramatically increase R&D spending every year, we need to maintain that level of spend and we need to increase it in line with our operating costs. That, I think, is a fundamental feature of a software product business so we’d expect to grow that a bit this year, but certainly we’ll be maintaining it.
I think that, obviously, there’s a lot of talk at the moment about AI so AI is a key focus area for R&D. Also, probably as important in our marketplace at the moment is the digital customer experience.
So, how do you have better contact with customers? How do you give them a better experience of interacting with your communication services, such that they don’t just buy more services, but don’t churn? And digital experience is a really fundamental part of that so a lot of work at the moment is going on in that area as well.
Q5: How confident are you about hitting your goals for the coming financial year and for Cerillion’s longer-term prospects?
A5: Well, I think, as I said earlier, the market we see as moving further around to our view of the world in terms of software as a service solutions in the telco enterprise software space are the way forward for the future.
So, I think we have very strong prospects because we’re already there and we’re already operating that model but also with the growth in the pipeline, it suggests that there’s still strong demand across the board.
So, that’s got to be positive for us, I think.
