The billing software specialist says slipping customer orders will leave full-year results well short of City forecasts.
Cerillion (AIM: CER) saw its shares slump by more than 20% at Monday's open after the billing and revenue management software group warned that full-year results would miss market expectations, guiding revenue of £46m to £48m for the year to 30 September against analyst forecasts of £52.8m.
The sell-off came as Cerillion also flagged a squeeze on profitability, with adjusted EBITDA margin now expected at 43% to 45%, down sharply from 50.9% a year earlier, after the company said delays or deferrals to a number of new and existing customer orders, including software licence expansions and upgrades, had held back trading.
The company had already signalled at its interim results that the second half would be considerably stronger than the first, and it reiterated that the underlying pattern of trading remains intact, but the scale of order delays means the full year will now land behind consensus rather than in line with it.
Cerillion pointed to continued progress on its major implementation contracts as a steadying influence, noting that work at UCom is nearing completion and that software installation at Omantel has now been finished, while it maintained that its back-order book and pipeline of new customer opportunities remain strong.
Investors will now watch for confirmation at full-year results of whether delayed orders convert in the coming months, with the strength of the order book and pipeline likely to be the key test of whether Monday's guidance cut proves a timing issue rather than a deeper demand problem.
This report is based on Cerillion’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: ThisisEngineering on Unsplash.
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