CEO interview – Louis Hall ‘the AIM float is just the beginning’

Written by on March 18, 2016 in Billing & Payments, Opinion with 0 Comments

Louis Hall AIMCEO interview – DisruptiveViews (DV) saw that Cerillion was about to list on AIM, a specialist part of the London Stock Exchange, specifically for smaller companies looking for growth capital. We decided to ask CEO Louis Hall (LH) what was behind the move.

DV: Louis, we heard that Cerillion is about to get an AIM listing, can you tell us what the motivation was?

LH: It is really a platform that will take Cerillion to the next levels. We’ve had steady growth over the last 10 years, between 5 and 10 percent, but we felt that with existing investors we were limited in what we could do. A public listing allows us to go out and acquire other businesses, make strategic investments, invest more in sales and marketing and so on. It really is about the beginning of a journey, not the end of one.

DV: Do you see that billing companies need to expand outside their core markets, is that a driver?

LH: On the enterprise software side, we did some things around the edges, for instance we acquired netSolutions, a network inventory business, which definitely added to what we could do. The other thing that is going on is that we are pushing hard with our cloud billing product, Cerillion Skyline, and that may well need more investment in the sales and marketing effort. We are also looking at potential acquisitions, more to get access to markets and expertise, rather just buy another piece of software.

DV: So this move is about expansion?

LH: Absolutely. The management’s shareholding has all been rolled forward into the new vehicle, so there is no exit here, it is very much about growth and growth potential. As I said, at the beginning.

DV: Who will invest in the new entity?

LH: Good question, and we are happy to sell you a few shares, some special vintage stock! Seriously, we have a couple of cornerstone investors, Miton Asset Management is one, a large fund that specialises in small cap investing, Livingbridge is another City institution with a small cap fund. There are also quite a lot of smaller players coming on board, and the deal is being brokered by Shore Capital. Obviously on day one it is about institutional investors, but we are hoping to build a retail market as well. We are building a profile in the financial press and one of the things that makes us attractive, particularly to the retail market, is that we are offering a five percent dividend going forward.

DV: Why did you not go further with private equity?

LH: We actually had some discussions, a variety of new private equity guys wanted to replace the existing ones, but that didn’t solve the problem from a management point of view, in fact it just added debt. There were a number of M&A options as well, but then what? This makes it a new beginning.

DV: Are you going to be able to address diverse markets better now?

LH: That is certainly what we are doing and this will accelerate that process. We haven’t gone very broad yet, because it is difficult to build domain knowledge, for instance Cerillion Skyline is quite a narrow slice of billing and charging. Our first customer actually wired us in to their existing stack, and they kept on with their own CRM and workflow pieces. So, it is very much taking a niche piece of a much bigger market. Obviously we have domain knowledge in enterprise and telecoms but we probably need to invest in getting greater knowledge and capacity in other areas.

DV: Do you see telcos speeding up their journey to becoming digital players, are they getting towards a more transactional model?

LH: We are seeing some movement, definitely. I think the big players will take some time to catch up, but there is certainly movement and innovation in the ‘fringe’ areas such as IoT. I think we will see some interesting cycles with, for instance, MVNOs, where they are launched and then brought back in-house.

DV: Is competition increasing or decreasing do you think?

LH: Competition in the enterprise space is probably decreasing. For example, Comverse were a strong competitor, but now they have gone to Amdocs, we don’t see them at the moment. Certainly the number of competitors has gone down in those who can do the end-to-end piece. In the cloud market, there are definitely more players, the Zuoras and Arias for instance, lots of money being poured in, but without much telecoms experience, and then you have some smaller players. Of course, it is a lot bigger than just telecoms, we are talking about any vertical, any industry, that has a charging or billing need. So, it is more competitive on the SaaS side, but there is more market to play with.

DV: So, when do you start trading?

LH: We start trading on Friday [today]. We go down there and ring the bell to start trading and the shares crack into life, so to speak. Actually, what is exciting is that the original five guys who did the Logica MBO back in 1999, who sat in the corner of the office of Hampstead Road, will all be there when the bell rings.

DV: That will be very exciting. One thought, as a public company, will that not burden you with a lot more accounting overhead?

LH: Actually, with private equity, you have to do almost more than AIM. We will introduce an interim report, and that’s a bit more work, but the Finance guys need some more work anyway! But actually, it is a good point. What takes the time is the road shows you have to do round the investors, and keeping a media profile. This is important to keep people interested. I’m exhausted just thinking about it!

DV: What about customers as investors?

LH: None that we know of, it might be a bit small for them, but that is an interesting thought. What is nice is that Logica, who had a stake in the original version of the company has rolled their investment into the new vehicle, so they are still there.

DV: Very exciting, and the best of luck.

LH: Thank you.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


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