Back in 2020, few anticipated that Cerillion’s first >£10m deal with Neos Networks would create the launchpad that it did and that CER would win another 5 sizable new wins (FY21-25) as demand for its SaaS BSS/OSS suite snowballed (particularly with larger CSPs) as its repeatable implementations and functionally strong product suite gained popularity. Given this, we are optimistic that 1H’s record £42.5m Omantel win will significantly strengthen CER’s credentials, both regionally and globally and could represent a new benchmark for ‘deal value’ going forward - in turn driving strong and compounding growth over the medium term. However, we don’t see this potential reflected in cons. forecasts (which expects growth to moderate in FY27) or CER’s valuation, as 25x FY26 earnings (or potentially less, subject to outperformance) is modest considering CER’s i) c.$50bn TAM, ii) SaaS USP and scalable business model and iii) proven track record and impressive customer base. In the context of today’s news (where some will focus on H1 EBITDA: -38% y/y) we believe this long-term focus will provide an edge.
