Cerillion combines growth and income
Telecoms billing and customer relationship management (CRM) software supplier Cerillion (CER:AIM) looks set to pay roughly 60% of earnings to shareholders through dividends when it reports full year results (28 November). This makes the company an interesting growth and income option for prospective investors.
Analyst Peter McNally at broker Shore Capital expects the £36m business to announce a 3.9p per share payout on rough 7.55p earnings per share (EPS). Revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) should come in up 6% and 8% to £14.8m and £3.1m respectively, for an impressive 21% EBITDA margin.
It will be interesting to see if the company is capable of incrementally lifting the implied profitability rate as well as driving the top line. What will help with the latter, and maybe the former, is new business wins such as the $2.4 million contract with an existing customer in the US announced in March, plus a major win in EMEA (Europe, the Middle East and Africa) in July.
The stock has jumped 61% since its 76p IPO on 18 March to 122.5p. It is at an early stage in its client industry upgrade cycle. (SF)
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell Youinvest.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.