Interim Results

RNS Number : 6844K

Cerillion PLC

09 May 2022

 

9 May 2022

AIM: CER

Cerillion plc

("Cerillion", the "Company" or the "Group")

 

Interim results  

for the six months ended 31 March 2022

Record Six-month Period and Continuing Strong Prospects

Cerillion plc, the billing, charging and customer relationship management software solutions provider, today issues its interim results for the six months ended 31 March 2022.

Results	H1 2022	H1 2021	Change
Revenue	£16.1m	£12.8m	+26%
Annualised recurring revenue	£9.8m	£9.0m	+9%
Adjusted EBITDA3	£7.2m	£4.8m	+50%
Statutory EBITDA	£7.1m	£4.8m	+48%
Adjusted EBITDA margin	44.9%	37.6%
Adjusted profit before tax4	£6.3m	£3.8m	+65%
Statutory profit before tax	£5.7m	£3.3m	+72%
Adjusted basic earnings per share5	18.6p	11.5p	+62%
Statutory basic earnings per share	16.4p	9.7p	+69%
Dividend per share	2.6p	2.1p	+24%
Net cash	£16.5m	£7.7m	+114%

Financial

· Revenue up 26% to £16.1m (H1 2021: £12.8m) reflecting ongoing major implementation projects for new customers and new orders from existing customers

· Annualised recurring revenue¹ at 31 March 2022 up 9% to £9.8m (H1 2021:  £9.0m), with increased uptake of managed services

· Adjusted EBITDA³ up 50% to £7.2m (H1 2021: £4.8m)

· Adjusted profit before tax⁴ up 65% to £6.3m (2021: £3.8m)

· Total new orders decreased to £10.9m (H1 2021: £23.6m), however new orders from existing customers increased by 12% to £10.9m (H1 2021: £9.7m) and the new customer pipeline is up 31% to £172m (H1 2021: £131m), a new record level

o  new major customer signings are expected in H2 and beyond

· Strong back order book² maintained at £39.7m (H1 2021: £42.1m)

· Adjusted earnings per share⁵ up 62% to 18.6p (2021:  11.5p)

· Net cash up 114% to £16.5m (31 March 2021: £7.7m)

· Interim dividend up 24% to 2.6p (2021: 2.1p)

Operational

· New team of experienced delivery resources established in Bulgaria

· Major new deals signed with existing customers

· The Board believes that the Group is well-positioned to deliver its full year targets

Louis Hall, CEO of Cerillion plc, commented:

"Our interim results set new records for revenue, adjusted PBT and net cash across any six-month period, and demonstrate the strong momentum in the business.

"We have made good operational progress in the period as well. The new team we have established in Bulgaria is part of our push to accelerate recruitment and diversify our talent base to meet growing demand.

"We see excellent opportunities for continuing growth and the new customer sales pipeline has grown significantly. Given the Company's progress, and its strong financial and operational position, we continue to view prospects very positively."

¹ Annualised recurring revenue includes annualised support and maintenance, managed services and Cerillion Skyline revenue.

² Back order book of £39.7m consists of £32.7m of sales contracted but not yet recognised at the end of the reporting period plus £7.0m of annualised support and maintenance revenue. It is anticipated that 75% of the £32.7m of sales contracted but not yet recognised as at the end of the reporting period will be recognised within the next 12 to 18 months.

³   Adjusted EBITDA is a non-GAAP, Company-specific measure, which is earnings excluding finance income, finance costs, taxes, depreciation, amortisation and share-based payments charges.

⁴   Adjusted profit before tax is a non-GAAP, Company-specific measure, which is earnings excluding taxes, amortisation of acquired intangible assets and share-based payments charges. 

⁵ Adjusted earnings per share is a non-GAAP, Company-specific measure, which is earnings after taxes, excluding amortisation of acquired intangible assets and share-based payments charges divided by the average weighted number of shares in the period.

For further information please contact:

Cerillion plc Louis Hall, CEO, Andrew Dickson, CFO		c/o KTZ Communications T: 020 3178 6378
Liberum (Nomad and Broker)		T: 020 3100 2000
Bidhi Bhoma, Cameron Duncan, William Hall
KTZ Communications		T: 020 3178 6378
Katie Tzouliadis, Dan Mahoney

About Cerillion

Cerillion is a leading provider of mission critical software for billing, charging and customer relationship management, with a 22-year track record in providing comprehensive revenue and customer management solutions. The Company has around 80 customers across 44 countries, principally serving the telecommunications market.

The Company is headquartered in London and also has operations in Pune, Sofia and Sydney.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REPORT

Overview

These are strong interim results, with revenue, adjusted PBT and cash all at record highs for any six-month period. Revenue is up by 26% year-on-year to £16.1m (H1 2021: £12.8m), and annualised recurring revenue at 31 March 2022 was 9% higher than a year ago at £9.8m (H1 2021: £9.0m).  Adjusted profit before tax rose by 65% to £6.3m (H1 2021:  £3.8m). Net cash at the end of March 2022 was up by 114% at £16.5m (31 March 2021: £7.7m).

These excellent results reflect the major implementation and upgrade projects under way with new customers and strong flows of business with existing customers, as well as an increased baseline of recurring income.

Whilst major new orders were down year-on-year to £10.9m, from a H1 2021 high of £23.6m, the value of the new customer sales pipeline has increased significantly to £172m, up by 31%, and we expect contract closures to come through in the second half and beyond.  This reflects the advanced stage of discussions with certain potential new customers although, as ever, precise timings of potential contract closures are hard to predict with certainty. As our existing base of customers grows, the level of new orders from existing customers continues to increase, and rose by 12% to £10.9m (31 March 2021: £9.7m) in the period.  This enabled a strong back-order book to be maintained at £39.7m (31 March 2021: £42.1m).

Having opened a new office in Sofia, Bulgaria, during the first half, we built a team of experienced delivery resources, hiring 13 consultants.  As well as providing us with a presence within the EU, this growing new centre will help us to further diversify our human resource base, enabling us to better manage the inflationary pressures we are experiencing in our UK and India operating bases. In addition to this, whilst the move to remote working due to the COVID-19 pandemic has created some challenges, this change has created more flexibility to source the best people, at the most competitive rates, wherever they may be located.

Looking ahead over the balance of the current financial year, we are very confident of continuing progress, supported by our strong back-order book and new customer sales pipeline.

From a market perspective, we are seeing no let-up in investment in 5G and broadband infrastructure, and we continue to see strong opportunity for Cerillion, derived from the need to monetise those new assets and trickle-down investment into the ancillary systems that we provide. 

Financial Overview

Revenue for the six months ended 31 March 2022 increased by 26% to £16.1m (H1 2021: £12.8m), which reflected both the strong back order book and ongoing major implementation projects, as well as new orders from existing customers.

The mix of revenue was more weighted towards Services compared to the prior period, with revenue from Services as a proportion of total revenue at 63% (H1 2021: 51%), up 57% year-on-year to £10.2m (H1 2021: £6.5m).  Software revenue (from software licence, support and maintenance sales) made up 31% of total revenue (H1 2021: 46%), decreasing by 15% to £5.0m (H1 2021: £5.8m). This mainly reflected the timing of software licence recognition. Third-party revenue made up 6% of total revenue (H1 2021: 4%), doubling to £1.0m (H1 2021: £0.5m). 

Gross margin for the period remained high at 78.5% (H1 2021: 78.6%). Whilst headcount increased in all regions to support growth, recruitment efforts were focused on building resources in India and in our new office in Bulgaria. This led to an overall reduction in average cost per head (despite inflationary pressures in the UK and India), which benefitted gross margin, offsetting the impact from the change in revenue mix.

Existing customers (those customers acquired at least 12 months before the end of the reporting period) continue to make up a high proportion of the Group's revenue, as is typical, and generated 91% of total revenue in the period (H1 2021: 71%).

Recurring revenue¹, from support and maintenance and managed service contracts, grew by 9% to £4.8m (H1 2021: £4.4m) and accounted for 30% of the Group's revenue (H1 2021: 35%).  As a result of new customer deployments, support fee increments and an increased uptake of managed services, annualised recurring revenue at the end of March increased by 9% year-on-year to £9.8m (31 March 2021: £9.0m).

As expected, operating expenses increased in the period, but only marginally, up 4% to £7.0m (H1 2021: £6.7m). This reflects our close focus on cost control and favourable foreign exchange rates, partly offset by higher travel and marketing costs, as business returned to normal following the lifting of COVID-19 restrictions, and higher sales commissions.

Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA"), which excludes share-based payments charges, rose by 50% to £7.2m (H1 2021: £4.8m). Statutory EBITDA increased by 48% to £7.1m (H1 2021: £4.8m).

Adjusted profit before tax³ rose by 65% to £6.3m (H1 2021: £3.8m) and adjusted earnings per share⁴ was 62% higher at 18.6p (H1 2021: 11.5p).  Statutory profit before tax increased by 72% to £5.7m (2021: £3.3m), and statutory earnings per share increased by 69% to 16.4p (2021: 9.7p).

The balance sheet remains strong.  Net assets rose by 34% to £23.0m as at 31 March 2022 (31 March 2021: £17.2m).

Cash Flow and Banking

Net cash at 31 March 2022 increased by 114% to £16.5m (31 March 2021: £7.7m), with no debt in either the current or prior period.  Net cash generated from operations in the period rose by 145% to £6.5m (H1 2021: £2.7m).

Development costs of £0.5m were capitalised in the period (H1 2021: £0.5m) after investment to further enhance our intellectual property.

Expenditure on fixed assets was £0.1m (H1 2021: £0.1m). 

Free cash generation in the period increased by 184% to £5.9m (H1 2021: £2.1m), which reflected the higher profit and an overall reduction in working capital, partly offset by higher tax payments. It was utilised to pay the final dividend of £1.5m (H1 2021: £1.1m) in respect of the year ended 30 September 2021. 

Dividend

The Board is pleased to declare an increased interim dividend of 2.6p per share (H1 2021: 2.1p), a 24% rise year-on-year. The interim dividend will become payable on 17 June 2022 to those shareholders on the Company's register as at the close of business on the record date of 27 May 2022 The ex-dividend date is 26 May 2022. 

As previously stated, the Board intends to distribute between a third to a half of the Group's free cash flow as dividends each year, subject to the Group's performance and the Board's assessment of the trading environment.

Operational Overview

Demand from the existing customer base was very healthy over the first half, with sales to existing customers up by 12% to £10.9m (H1 2021: £9.7m).  These sales included licence expansions, scope expansions on implementation projects, upgrades, and new managed services agreements. The new customer sales pipeline grew strongly, up 31%, to £172m as at 31 March 2022 (31 March 2021: £131m), and we expect to close new customer orders in the second half and beyond. 

Buoyant sales to existing customers have maintained the back order book at a very healthy level of £39.7m at 31 March 2022 (31 March 2021: £42.1m). These contracted (but not yet recognised) sales will drive revenues over the coming quarters. It is especially encouraging to see the Group's base of recurring revenue increase. Reflecting the growth in the business and specifically the growth in managed services and support and maintenance, annualised recurring revenue rose by 9% year-on-year to £9.8m (H1 2021: £9.0m).

The BSS/OSS solutions that we provide remain a core requirement for telecommunications operators and service providers, and substantial investment in 5G and fibre rollout continues to drive investment in replacing, upgrading and improving BSS/OSS solutions, mainly so as to drive more revenue from this network infrastructure investment. We offer all major modules in customer management and experience as well as all major modules in revenue management and monetisation. In order to maintain our attractive competitive positioning, we continue to invest in R&D to improve our product set, providing new features and enhancing existing functionality.  We are in the process of investing approximately 10,000 man days in R&D over the year to provide two major software releases. We completed the first, Cerillion 22.1, in the period, releasing it in April. As the latest version of our Enterprise OSS/BSS suite for fixed, mobile, cable and multi-service operators, it provides customers with further capabilities and also launches a new set of out-of-the-box solution configurations, which address discrete telecoms market segments. The second release is well under way.  

We have also continued to build the team, bringing on new and experienced talent, and have expanded our staff numbers in both India and London.  In addition to this, we established our new skill centre in Sofia, Bulgaria, opened in September 2021, and intend to invest further in the team.

Working patterns remained affected by the global pandemic. In the London, staff returned to the office on two core days each week, with the option to be office-based on additional days where necessary. This combines the benefits of office-based interaction with the efficiency gains derived from working from home, and also recognises that greater flexibility is now a key differentiator in the employment market. In India, where the Group's other main operating base is located, most staff are continuing to work remotely, in line with the trend in that market.

Outlook

The business has continued to make strong progress and remains very well placed in a growing marketplace where our 'productised' approach stands out and the quality, breadth and completeness of our solutions provides us with strong competitive differentiation. In February 2022, we were pleased to announce that we had been included in two major industry reports by Gartner⁵, both considered to be highly authoritative guides for communication service providers. Cerillion was one of only ten companies to be included in both reports, and over 20 companies were assessed for each report.

Looking over the remainder of the financial year, with existing major implementation projects, the healthy back-order book, strong new customer pipeline and advanced new customer contract discussions, Cerillion is well-positioned to achieve its full year targets.

The Company's robust balance sheet, which carries no debt, and the significant increase in recurring income, provides further strong underpinning for future growth. The Board therefore remains confident of growth prospects this year and beyond.

Alan Howarth Chairman

Louis Hall Chief Executive Officer

Notes:

¹ Recurring revenue includes annualised support and maintenance, managed service and Cerillion Skyline revenue.

² Back order book of £39.7m consists of £32.7m of sales contracted but not yet recognised at the end of the reporting period plus £7.0m of annualised support and maintenance revenue. It is anticipated that 75% of the £32.7m of sales contracted but not yet recognised as at the end of the reporting period will be recognised within the next 12 to 18 months.

³ Adjusted profit before tax is a non-GAAP, company-specific measure which is earnings excluding taxes, amortisation of acquired intangible assets and share-based payments charges.

⁴ Adjusted earnings per share is a non-GAAP, company-specific measure which is earnings after taxes, excluding share-based payments charges and amortisation of acquired intangible assets divided by the average weighted number of shares in the period.

Gartner Disclaimer:

⁵ GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

The industry reports referred to above are Gartner "Market Guide for CSP Customer Management and Experience Solutions" By Analyst(s): Juha Korhonen, Amresh Nandan, Chris Meering, Susan Welsh de Grimaldo (published 31 January 2022), and Gartner "Market Guide for CSP Revenue Management and Monetization Solutions". By Analyst(s): Amresh Nandan, Chris Meering, Jouni Forsman (published 13 October 2021).

Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

INTERIM FINANCIAL INFORMATION

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 31 March 2022

£	Consolidated Unaudited half year to 31 Mar 2022	Consolidated Unaudited half year to 31 Mar 2021	Consolidated Audited year to 30 Sep 2021
Continuing operations
Revenue	16,139,723	12,808,391	26,070,815
Cost of sales	(3,475,424)	(2,745,730)	(5,662,228)
Gross profit	12,664,299	10,062,661	20,408,587
Operating expenses	(7,017,994)	(6,720,161)	(12,884,572)
Adjusted EBITDA*	7,248,378	4,819,689	10,515,283
Depreciation and amortisation	(1,465,237)	(1,459,119)	(2,880,927)
Share based payment charge	(136,836)	(18,070)	(110,341)
Operating profit	5,646,305	3,342,500	7,524,015
Finance costs	(72,837)	(87,378)	(163,982)
Finance income	81,691	33,964	66,810
Adjusted profit before tax**	6,288,411	3,803,572	8,530,014
Share based payment charge	(136,836)	(18,070)	(110,341)
Amortisation of acquired intangibles	(496,416)	(496,416)	(992,830)
Profit before tax	5,655,159	3,289,086	7,426,843
Taxation	(802,379)	(422,960)	(999,748)
Adjusted profit for the period***	5,486,032	3,380,612	7,530,266
Share based payment charge	(136,836)	(18,070)	(110,341)
Amortisation of acquired intangibles	(496,416)	(496,416)	(992,830)
Profit for the period	4,852,780	2,866,126	6,427,095
Other comprehensive income
Exchange differences on translating foreign operations	4,318	(120,707)	(120,093)
Total comprehensive profit for the period	4,857,098	2,745,419	6,307,002

All transactions are attributable to the owners of the parent.

		H1 2022	H1 2021	FY 2021
Basic earnings per share from continuing operations		16.4 pence	9.7 pence	21.8 pence
Diluted earnings per share from continuing operations		16.4 pence	9.6 pence	21.7 pence
Adjusted basic earnings per share from continuing operations		18.6 pence	11.5pence	25.5 pence
*	Adjusted EBITDA is a non-GAAP, Company-specific measure, which is earnings excluding finance income, finance costs, taxes, depreciation, amortisation and share-based payments charge.
**	Adjusted profit before tax is a non-GAAP, Company-specific measure which is earnings excluding taxes, amortisation of acquired intangible assets and share-based payments charge.
***	Adjusted profit for the period is a non-GAAP, Company-specific measure which is earnings excluding share-based payments charge and amortisation of acquired intangible assets.

Unaudited Condensed Consolidated Statement of Changes in Equity

as at 31 March 2022

£	Share capital	Share premium	Share option reserve	Treasury stock	Foreign exchange reserve	Retained earnings	Total Equity
Balance at 1 October 2020 (audited)	147,567	13,318,725	151,619	(375,025)	(46,981)	2,829,984	16,025,889
Profit for the period	-	-	-	-	-	2,866,126	2,866,126
Exchange difference on translating foreign operations	-	-	-	-	(120,707)	-	(120,707)
Total comprehensive income	-	-	-	-	(120,707)	2,866,126	2,745,419
Share option charge	-	-	18,070	-	-	-	18,070
Purchase of treasury stock	-	-	-	(512,500)	-	-	(512,500)
Exercise of share options	-	-	(66,925)	375,000	-	(307,450)	625
Dividends	-	-	-	-	-	(1,106,755)	(1,106,755)
Balance at 31 March 2021 (unaudited)	147,567	13,318,725	102,764	(512,525)	(167,688)	4,281,905	17,170,748
Profit for the period	-	-	-	-	-	3,560,969	3,560,969
Exchange difference on translating foreign operations	-	-	-	-	614	-	614
Total comprehensive income	-	-	-	-	614	3,560,969	3,561,583
Share option charge	-	-	92,271	-	-	-	92,271
Purchase of treasury stock	-	-	-	-	-	-	-
Exercise of share options	-	-	(66,905)	512,500	-	(444,971)	624
Dividends	-	-	-	-	-	(619,783)	(619,783)
Balance at 30 September 2021 (audited)	147,567	13,318,725	128,130	(25)	(167,074)	6,778,120	20,205,443
Profit for the period	-	-	-	-	-	4,852,780	4,852,780
Exchange difference on translating foreign operations	-	-	-	-	4,318	-	4,318
Total comprehensive income	-	-	-	-	4,318	4,852,780	4,857,098
Share option charge	-	-	136,836	-	-	-	136,836
Purchase of treasury stock	-	-	-	(827,424)	-	-	(827,424)
Exercise of share options	-	-	(45,548)	729,847	-	(576,596)	107,703
Dividends	-	-	-	-	-	(1,475,674)	(1,475,674)
Balance at 31 March 2022 (unaudited)	147,567	13,318,725	219,418	(97,602)	(162,756)	9,578,630	23,003,982

Unaudited Condensed Consolidated Balance Sheet

as at 31 March 2022

£	Unaudited Note	Consolidated Unaudited 31 Mar 2022	Consolidated Unaudited 31 Mar 2021	Consolidated Audited 30 Sep 2021
Assets
Non-current
Goodwill		2,053,141	2,053,141	2,053,141
Other intangible assets		3,097,137	4,001,157	3,571,787
Property, plant and equipment		677,962	711,687	758,670
Right-of-use assets		3,366,921	4,044,525	3,705,723
Other receivables	5	2,681,008	1,616,440	2,015,422
Deferred tax assets		224,017	143,885	209,211
		12,100,186	12,570,835	12,313,954
Current assets
Trade receivables		1,744,202	7,541,911	1,697,958
Other receivables	5	9,574,256	7,419,335	8,480,670
Cash and cash equivalents		16,514,236	7,709,248	13,174,471
		27,832,694	22,670,494	23,353,099
Total assets		39,932,880	35,241,329	35,667,053
Equity and liabilities
Shareholders' equity
Share capital		147,567	147,567	147,567
Share premium account		13,318,725	13,318,725	13,318,725
Treasury stock		(97,602)	(512,525)	(25)
Foreign exchange reserve		(162,756)	(167,688)	(167,074)
Share option reserve		219,418	102,764	128,130
Retained profit		9,578,630	4,281,905	6,778,120
Total Equity		23,003,982	17,170,748	20,205,443
Liabilities
Non-current
Other payables		427,708	-	394,850
Deferred tax liabilities		767,446	608,395	861,765
Lease liabilities		3,459,908	4,266,993	3,866,352
		4,655,062	4,875,388	5,122,967
Current liabilities
Trade payables		384,893	1,089,645	490,055
Other payables	5	11,888,943	12,105,548	9,848,588
Borrowings - current		-	-	-
		12,273,836	13,195,193	10,338,643
Total equity and liabilities		39,932,880	35,241,329	35,667,053

Unaudited Condensed Consolidated Cash Flow Statement

for the six months ended 31 March 2022

£	Consolidated Unaudited half year to 31 Mar 2022	Consolidated Unaudited half year to 31 Mar 2021	Consolidated Audited  year to 30 Sep 2021
Operating activities
Reconciliation of profit to operating cash flows
Profit for the period	4,852,780	2,866,126	6,427,095
Add back:
Taxation	802,379	422,960	999,748
Depreciation	504,923	500,613	1,007,265
Amortisation and impairment	960,314	958,506	1,873,661
Share option charge	136,836	18,070	110,341
Finance costs	72,837	87,378	163,982
Finance income	(81,691)	(33,964)	(66,810)
	7,248,378	4,819,689	10,515,282
Increase in trade and other receivables	(1,805,416)	(4,531,431)	(238,364)
Increase/(decrease) in trade and other creditors	2,465,299	2,672,615	(84,435)
Cash from operations	7,908,261	2,960,873	10,192,483
Finance costs	(72,837)	(87,378)	(163,982)
Finance income	81,691	1,464	66,810
Tax paid	(1,433,596)	(223,612)	(293,076)
Net cash generated from operating activities	6,483,519	2,651,347	9,802,235
Investing activities
Capitalisation of development costs	(485,664)	(484,428)	(970,212)
Purchase of property, plant and equipment	(85,473)	(87,624)	(301,686)
Net cash used in investing activities	(571,137)	(572,052)	(1,271,898)
Financing activities
Borrowings repaid	-	(609,359)	(609,359)
Purchase of treasury stock	(827,424)	(512,500)	(512,500)
Receipts from exercise of share options	107,703	625	1,249
Principal elements of finance leases	(400,253)	(382,350)	(764,416)
Dividends paid	(1,475,674)	(1,106,755)	(1,726,538)
Net cash used in financing activities	(2,595,648)	(2,610,339)	(3,611,564)
Net increase/(decrease) in cash and cash equivalents	3,316,734	(531,044)	4,918,773
Translation differences	23,031	(71,575)	(56,169)
Cash and cash equivalents at beginning of period	13,174,471	8,311,867	8,311,867
Cash and cash equivalents at end of period	16,514,236	7,709,248	13,174,471

Unaudited Notes

1.  Basis of Preparation and Accounting Policies

The condensed financial information is unaudited and was approved by the Board of Directors on 6 May 2022.

The Company is a public limited company, which was incorporated in England and Wales on 5 March 2015. The address of its registered office is 25 Bedford Street, London, WC2E 9ES. The interim financial information for the six months ended 31 March 2022 has been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU). The interim financial information for the six months ended 31 March 2022 has been prepared under the historical cost convention.

The interim financial information for the six months ended 31 March 2022 does not constitute statutory accounts within the meaning of section 434 of the Companies Act. Statutory accounts for the year ended 30 September 2021 have been delivered to the Registrar of Companies. These accounts contain an unqualified audit report and did not contain a statement under the Companies Act 2006 regarding matters which are required to be noted by exception.

The preparation of the interim financial information for the six months ended 31 March 2022 in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Statements and the reported amounts of revenues and expenses during the period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards which have no material impact on the accounting policies, financial position or performance of the Group.

There is no material difference between the fair value of financial assets and liabilities and their carrying amount.

The functional and presentational currency is UK Sterling.

2.  Going concern

The Directors have assessed the current financial position of the Group, along with future cash flow requirements, to determine if the Group has the financial resources to continue as a going concern for the foreseeable future. The conclusion of this assessment is that it is appropriate that the Group be considered a going concern. For this reason the Directors continue to adopt the going concern basis in preparing the interim financial information for the six months ended 31 March 2022 . The interim financial information does not include any adjustments that would result in the going concern basis of preparation being inappropriate.

3.  Basis of consolidation

The consolidated financial information incorporates the financial information of the Company and entities controlled by the Company (its subsidiaries) at 31 March 2022. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefit from its activities.

Except as noted below, the financial information of subsidiaries is included in the consolidated financial statements using the acquisition method of accounting. On the date of acquisition the assets and liabilities of the relevant subsidiaries are measured at their fair values.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

4.  Adjusted earnings

EBITDA, profit before tax, profit for the period and earnings per share have been adjusted to take account of £136,836 (6 months to 31 March 2021 £18,070) relating to P&L charges in respect of the Company's share based long term incentive plan. The profit before tax, profit for the period and earnings per share have also been adjusted to take account of the amortisation of acquired intangibles of £496,416 (6 months to 31 March 2021 £496,416).

5.  Other receivables and other payables

		Unaudited 31 Mar 2022 £	Unaudited 31 Mar 2021 £	Audited 30 Sep 2021 £
Other receivables - non-current
Amounts recoverable on contracts		2,611,053	1,616,440	1,945,671
Other receivables		69,955	-	69,751
		2,681,008	1,616,440	2,015,422
Other receivables - current
Amounts recoverable on contracts Prepayments		8,709,319 711,643	6,513,985 542,615	7,763,748 480,941
Other receivables		153,294	362,735	235,981
		9,574,256	7,419,335	8,480,670
Other payables
Taxation		276,446	466,000	799,160
Other taxation and social security		420,476	274,296	421,847
Pension		48,579	44,319	46,383
Accruals Deferred income		2,781,213 6,952,966	1,740,393 8,153,878	2,339,143 4,775,174
Lease liability		953,901	929,135	947,710
Other payables		455,362	497,527	519,171
		11,888,943	12,105,548	9,848,588

6.  Availability of this announcement

This announcement together with the financial statements herein and a presentation in respect of the interim financial results are available on the Group's website, www.cerillion.com.

 

END

 

 

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