As noted elsewhere, not to mention in the Financial Times, the Mello 2018 conference in Derby last week was like no other. With fascinating key-note presentations, numerous companies of investable quality and a who's who line-up of names from the private investor universe it was the place to be. While I spent some time looking after directors presenting in one of the satellite rooms I nevertheless made time to see the companies below; all are worthy of attention.
Cerillion
I first heard about Cerillion just over a year ago at this Sharesoc Company Seminar. At the time CEO Louis Hall spoke about the history of the business and how they were looking to drive growth by moving into new sectors and geographies. Providing enterprise CRM and billing software will remain at the heart of their offering but they'd also like to diversify to fill in around the edges of the product portfolio. Financially this shouldn't be a problem as the bulk of revenues are from existing clients and these clients tend to stick around as it can take 3 years to switch to a new system (some clients have been on-board for 20 years!).
The real difficulty for Cerillion is that it's still a minnow in a pond full of competitors - from large software vendors (Oracle) and equipment vendors (Ericsson) to small software companies (Ansen). The board are mitigating this by filling a niche with mission-critical billing software and partnering with Nokia so that Nokia on-sells the Cerillion solution as part of bigger deals (Nokia has no in-house billing system). They are also diversifying into other verticals away from telecoms and pushing a new cloud-based solution. Nevertheless I can't help feeling that the company is finding is hard to grow dramatically and they're suffering from some small-company issues such as the impact of FX changes: most of their revenue is from Europe and US so GBP strength is hurting them because, as advised, they have little hedging. Still they're not too expensive and might be worth tucking away and waiting for the business to be acquired itself some time in the future?
Aeorema Communications
I'd never heard of nano-cap Aeorema Communications (just £2.5m market cap) prior to Mello 2018 but Steve Quah and Andrew Harvey (joint MDs) certainly put on an entertaining presentation. On the…
