Performance Review of Two Tech Players - Blue Prism Group & Cerillion PLC

Summary

  • Blue Prism issued new shares for the transaction related to Thoughtonomy.
  • Blue Prism expects to reach cash breakeven in 2021.
  • Cerillion paid the interim dividend of 1.75 pence per share in H1 FY2020.
  • Cerillion stated that it is well-positioned to deliver the FY2020 performance targets.

Based on 1-year performance, both PRSM and CER were up by about 17.93 percent and 70.00 percent, respectively. The share price of PRSM was up by 1.33 percent, whereas CER was down by 1.04 percent (as on 11 August 2020 before the market close at 8:00 AM GMT+1). Let's skim through the recent updates by the two companies.

Blue Prism Group PLC (LON: PRSM)

Blue Prism is a UK based technology company that offer products that are focused on enterprise-grade RPA. The RPA platform of Blue Prism collaborates technology with the experts. It has operations in EMEA, Americas and APAC with a total workforce of 1,010 people. Blue Prism is included in the FTSE AIM UK 50 index.

Equity Issue

On 21 July 2020, the Company issued 1,078,102 new shares at 1 pence per share related to the acquisition of Thoughtonomy. The new shares were issued as part of the completion of one year of acquisition.

H1 FY2020 results (ended 30 April 2020) as reported on 18 June 2020

(Source: Company website)

The Company reported revenue of £68.5 million in H1 FY20, which increased by 70 percent year on year from £40.4 million a year ago. Cloud segment added £5.5 million, whereas recurring revenue was £66.8 million that was close to 98 percent of the total revenue. Professional services contributed £1.7 million to total revenue. The increased sales were due to the exit recurring revenue in FY19 and winning new customers in the first half of FY20. Based on the regional performance, EMEA generated £33.4 million, whereas the Americas and APAC reported revenue of £26.5 million and £8.6 million, respectively. The Adjusted EBITDA loss, excluding share-based payment, narrowed to £29.8 million in H1 FY20 from loss of £31.0 million in H1 FY19. In H1 FY20, the loss before tax widened to £41.4 million from £34.4 million a year ago. The operating cash outflow was £31.2 million. The Company started H1 FY20 with 1,677 customers, and it added 255 customers and lost 68 customers during the period. As on 30 April 2020, the Company had 1,864 customers, and it had cash of £90.8 million. The Company also has a short term investment of £50.0 million that would mature in the next 12 months. Blue Prism raised gross proceeds of £100.0 million through equity issue in April 2020.

Share Price Performance Analysis

1-Year Chart as on August-11-2020, before the market close (Source: Refinitiv, Thomson Reuters)

Blue Prism Group PLC's shares were trading at GBX 1,369 up by about 1.33 percent from the last closing price (as on 11 August 2020 before the market close at 8:00 AM GMT+1). PRSM's 52-week High and Low were GBX 1,890.00 and GBX 774.25, respectively. The Company had a market capitalization of £1.27 billion.

Business Outlook

Given the current economic situation, the Company withdrew the guidance; however, the Company is confident about growth and customer retention. The management is hopeful of reaching a cash breakeven in 2021. The Company's products have witnessed an increase in demand and expect it to continue. The recent funding activity has increased the liquidity headroom of the Company, and it stated that it would sustain any volatility in the market. The Company considers all the companies as a potential customer of Blue Prism by automating the process of organizations.

Cerillion PLC (LON: CER) – Completed remote implementation of a project in Africa

Cerillion PLC is a UK based technology company. The Company provides a software solution that helps in billing, charging and customer relationship. Cerillion is included in the FTSE AIM All-Share index.

Completion of Project

On 1 July 2020, the Company reported that it had completed a remote implementation of the convergent charging system and enterprise product catalogue for MVN-X, a virtual mobile network enabler company. The project was completed in Africa.

Interim results (ended 31 March 2020) as reported on 11 May 2020

(Source: Company website)

In H1 FY20, the Company reported revenue of £10.2 million that increased by 46 percent year on year. Services division revenue was £6.1 million, which increased by 61 percent year on year from £3.8 million in H1 FY19. Services division contributed 59 percent to the total revenue. Software division revenue was up by 25 percent year on year in H1 FY20 to £3.3 million, whereas the third-party revenue was £0.8 million. Software and third-party added 32 percent and 8 percent, respectively, to the total revenue. The existing customers contributed 82 percent of the total revenue; the existing customers are customers that were acquired 12 months ago or before. In H1 FY20, the EBITDA increased to £2.7 million from £0.3 million a year ago. The adjusted profit before tax was £1.7 million, and the earnings per share were 5.6 pence. The new orders increased by 28 percent year on year to £9.5 million in H1 FY20. The backorder book was £24.2 million that was up by 57 percent. As on 31 March 2020, Cerillion had net assets of £15.4 million, including cash of £6.0 million. Cerillion paid the interim dividend of 1.75 pence per share in H1 FY2020. The Company won many contracts in 2019, and the new business pipeline is 19 percent higher year on year, and the Company has bid for many tenders that are at advanced stages.

Share Price Performance Analysis

1-Year Chart as on August-11-2020, before the market close (Source: Refinitiv, Thomson Reuters)

Cerillion PLC's shares were trading at GBX 277.1 down by about 1.04 percent from the last closing price (as on 11 August 2020 before the market close at 8:00 AM GMT+1). CER's 52-week High and Low were GBX 329.74 and GBX 145.00, respectively. The Company had a market capitalization of £82.64 million.

Business Outlook

The Company believes that its operational and financial position is resilient, and it has a healthy order book. It is on track to achieve the full-year performance target. The volume of work and backorder book would support the performance. In H1 FY20, the Company had a good performance and expected it to continue for the remaining of the financial year. Cerillion earns a significant portion from recurring revenue and remains cautiously optimistic about the future of the Company.

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