Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, Deutsche Bank (ETR:DBKGn) increased the price target on Cerillion plc (CER:LN) shares from GBP15.50 to GBP19.00, while maintaining a Buy rating on the stock. The adjustment follows the company’s H1 financial results, which aligned with the trading update provided in April.
Cerillion reported a 7% decline in H1 revenue to £20.9 million. This decrease was anticipated due to the timing of license renewals and extensions, which are expected to occur in the second half of the fiscal year 2025, as opposed to the first half of fiscal year 2024. Despite the fall in software revenue, which dropped 27% to £9.6 million, the company experienced a significant increase in services revenue, up 24% year-over-year to £10.3 million, accounting for 49% of total sales compared to 37% in the first half of 2024.
The adjusted EBITDA margin remained robust at 47.7%, only slightly down from 48.9% in the first half of 2023. This strength in profitability was attributed to higher services day rates and favorable foreign exchange rates. The company also posted an adjusted profit before tax (PBT) of £9.3 million, representing an adjusted PBT margin of 44.5%, down from 46.7%.
Cerillion’s financial health was further underscored by its strong cash conversion in the first half, which was supported by a lower percentage of software sales, reducing the need for investment in working capital. This led to a 25% increase in free cash flow (FCF) to £5.9 million. Additionally, the company announced a 20% increase in its H1 dividend to 4.8 pence per share and reported a net cash position of £31.2 million at the end of the period, up from £29.9 million in September 2024.
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