Panmure Liberum’s latest research note, highlights that telecom software specialist Cerillion plc (LON:CER) is well placed for its next phase of growth, despite a relatively modest FY25. The note covers London-listed Cerillion, with the BUY rating and 2,000p target price set out by lead author and Research Analyst Andrew Ripper.
The broker highlights that Cerillion operates in the large and fragmented telecom Business and Operations Support Systems market, where it has been consistently winning work against bigger rivals such as Amdocs and other small to mid-sized independent software vendors. Recent contract wins in Europe, Southern Africa and Armenia underline its ability to compete effectively across regions, as illustrated by the contract table on page 2 of the report.
Record pipeline supports double-digit growth outlook
A central theme in Panmure Liberum’s analysis is the strength of Cerillion’s new customer sales pipeline. At the September 2025 year-end, the pipeline stood at a record £275m, including what management describes as “some substantial opportunities”. The company has expanded its sales and marketing resources, adding senior salespeople in the US and Middle East and extra pre-sales capacity in Europe, with around ten quota-carrying sales staff now in place.
Based on this, the broker expects a return to double-digit organic revenue growth in FY26 and FY27, forecasting increases of 19% and 10% respectively. Growth is expected to be weighted towards the second half, as new projects start to convert from the pipeline into live contracts.
FY25 full year results highlights
The latest research note from Panmure Liberum describes Cerillion’s FY25 performance as steady, with a strong exit rate into the new financial year. FY25 revenue grew by 3.7% to £45.4m, with second-half growth of 15% offsetting a softer first half. Adjusted EBITDA rose 11% to £23.1m, pushing the EBITDA margin up to 50.9%. Net cash increased from £30m to £34m, supported by £11m of free cash flow.
FY25 highlights from the research note include:
- Record order intake of £47.6m, up from £38.1m in FY24, excluding support and maintenance.
- A major European customer contract worth £25m over five years and the Ucom win in Armenia worth £8.5m over five years.
- Year-end order book of £56.9m, including £47.4m of contracted sales and £9.5m of annual support and maintenance revenue.
- Revenue mix of £19.0m in services and £24.4m in software, with services up 7% year on year.
- Geographic revenue now heavily weighted to the UK and Europe at 77% of group sales, reflecting recent contract wins in the region.
The order book provides around £25m of revenue visibility for FY26, equivalent to 47% of Panmure Liberum’s £54m revenue forecast, before allowing for further work from existing customers and indexation.
Valuation and analyst view
On Panmure Liberum’s calendar 2026 estimates, Cerillion trades on 14.6 times EV/EBITDA and 16.4 times EV/EBIT, towards the lower end of its five-year trading range, as shown by the EV/EBITDA chart on page 5 of the report. The broker’s DCF-based target price of 2,000p uses a weighted average cost of capital of 8.4% and a 3% terminal growth rate.
Ripper’s summary of the investment case is clear: “We believe that Cerillion should trade at a premium to other listed software companies due to its superior growth potential and returns.” At the same time, the note acknowledges that FY25 was a relatively slow year and that the near-term outlook depends on successful conversion of the enlarged pipeline into new contracts.
Final Thoughts
Overall, the latest research note from Panmure Liberum portrays Cerillion plc as a disciplined, profitable software company with strong cash generation, a record pipeline and good visibility into FY26. While execution on new deals remains important, the combination of recurring revenues, high margins and a solid balance sheet provides a supportive backdrop as the group looks to re-accelerate growth in the coming years.
