REG - Cerillion PLC - Interim Results
09/05/2022 07:00
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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 EBITDA(3) £7.2m £4.8m +50%
Statutory EBITDA £7.1m £4.8m +48%
Adjusted EBITDA margin 44.9% 37.6%
Adjusted profit before tax(4) £6.3m £3.8m +65%
Statutory profit before tax £5.7m £3.3m +72%
Adjusted basic earnings per share(5) 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 revenue(1) at 31 March 2022 up 9% to £9.8m (H1
2021: £9.0m), with increased uptake of managed services
· Adjusted EBITDA(3) up 50% to £7.2m (H1 2021: £4.8m)
· Adjusted profit before tax(4) 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 book(2) maintained at £39.7m (H1 2021: £42.1m)
· Adjusted earnings per share(5) 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 c/o KTZ Communications
Louis Hall, CEO, Andrew Dickson, CFO 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 revenue(1), 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 tax(3) rose by 65% to £6.3m (H1 2021: £3.8m) and
adjusted earnings per share(4) 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
Gartner(5), 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 Louis Hall
Chairman 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 Consolidated Consolidated
Unaudited Unaudited Audited
half year to half year to year to
31 Mar 2022 31 Mar 2021 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 (167,688) 4,281,905 17,170,748
(512,525)
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 (162,756) 9,578,630 23,003,982
(97,602)
Unaudited Condensed Consolidated Balance Sheet
as at 31 March 2022
£ Consolidated Consolidated Consolidated
Unaudited Unaudited 31 Mar 2022 Unaudited Audited
Note 31 Mar 2021 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 Consolidated Consolidated
Unaudited half year to 31 Mar 2022 Unaudited Audited
half year to year to
31 Mar 2021 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 Unaudited Audited
31 Mar 2022 31 Mar 2021 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 8,709,319 6,513,985 7,763,748
Prepayments 711,643 542,615 480,941
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 2,781,213 1,740,393 2,339,143
Deferred income 6,952,966 8,153,878 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.
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