Cerillion Plc (LSE: CER) popped up on my screen as a result of their trading update:
The first half of the year has progressed well and results are anticipated to be in line with management expectations, with revenues of c. GBP6.9m and EBITDA of c. GBP1.1m, an increase of 11% and 21% respectively compared with the same period in the previous financial year.
It wasn’t the trading update per se that got me interested it was the fact that with a market cap of circa £50 million and revenues of £6.9 million Cerillion seemed cheap.
Interim results are due out in late May but to my mind there’s no point hanging around so I bought in.
I also like the fact that the CEO Louis Hall owns over 40% of the issued share capital:
The third thing that convinced me to take a position was the albeit brief but strong operating history of Cerillion:
All looking positive to me and you can clearly see where management forecast an 11% increase in revenue.
The fourth thing that I like about Cerillion (LSE: CER) is the experience of the management team; after reading a bit more about them I feel safer knowing that Cerillion is run by people who seemingly know what they are doing AND who align themselves to shareholders by being large shareholders in the business themselves.
The fifth thing I liked about Cerillion (LSE: CER) is their strategy for growth targeting new markets in the US and Australia and if they can tap into them there should be an uplift in the share price (famous last words).
Like my previous investment, Cerillion is more speculative than I’d like but not every stock will have 100 year operating history trading at a PE of 3 and a price to book of 0.30 and has raised dividends every year for the last 1oo years.
In this regard I ponied up for half position size just to get in since the overall investment case is compelling enough in my mind.