Celebrus Technologies – accounting policy switch offers investors an excellent buying opportunity, shares 166p, brokers TP 290p

18.08.2025

This coming Wednesday will see Celebrus Technologies (LON:CLBS) holding its AGM to cover the Report & Accounts for the year to end-March 2025.

Ahead of that meeting, the data solutions provider will also be issuing Trading Update, which in my view should be bullish.

This £67m-capitalised group is undergoing a significant change in its business and is now concentrating upon building up its Annual Recurring Revenues, where previously it depended upon hardware sales.

For this group its new emphasis upon creating even more ARR is strategically important.

Its ARR is defined as the amount of revenue contracted at a point in time, derived from Celebrus software, and Celebrus and non-Celebrus managed services, that is expected to recur within the next twelve months.

The Business

Previously known as D4T4, the Sunbury-on-Thames-based company which changed its name in late 2023, classes itself as a disruptive data technology platform, Celebrus Technologies (LON:CLBS) is focused on improving the relationships between brands and consumers via better data.

It redefines what ‘digital identity verification’ means to power both next-level marketing and fraud prevention use cases.

Celebrus automatically captures, contextualises, and activates consumer behavioural data in live-time across all digital channels and empowers brands to detect and prevent fraud before it occurs through the addition of behavioural biometrics and AI.

With a blue-chip international customer base, the group, which has offices in the UK, USA and in India, works across over 30 countries and markets itself throughout the financial services, healthcare, retail, travel, and telecommunications sectors.

Celebrus Cloud allows the company to gradually shift away from a reliance on third-party hardware and into a hosting model that drives ARR Managed Services Revenue.

By selling more software, the group continues to focus on driving ARR growth with higher gross margins, increasing shareholder value, and building upon its high customer retention rates across the business to drive organic growth.

The strong management team has a track record of success in growing software businesses.

While the company, which has a strong balance sheet with ample cash to fund investment into revenue growth, is profitable, cash generative, and dividend paying.

Latest Contract Win

At the end of last month, it announced yet another contract win – this time for a three-year deal with a major UK retail financial services institution which will migrate from Adobe to the Celebrus platform hosted in Celebrus Cloud for both the web and their mobile app.

Initial use cases include digital analytics, business intelligence, and the personalisation of customer experiences across multiple channels and devices.

The deal was closed by the group’s direct sales team and has a total contract value of $2.9m.

That adds Celebrus ARR of $0.8m in its first year, with further ARR growth for years two and three included in the contract.

It brings the total Celebrus ARR to $15.5m, an increase of 14% from the balance at the start of this financial year (31^st March 2025: $13.6m), and it brings the total Group ARR to $20.8m.

That win illustrates the benefits of a direct sales channel and reinforces the Board's confidence in continuing to drive growth in Celebrus ARR, with customers across a wide range of industry sectors and geographies.

The Equity

There are some 40,738,778 shares in issue.

The larger holders include Rathbones Investment Management (13.91%), Canaccord Genuity Wealth (10.26%), Investec Wealth & Investment (9.41%), Herald Investment Management (7.99%), Chelverton Asset Management (5.79%), TrinityBridge (5.74%), Charles Stanley & Co (Investment Management) (4.97%), Ennismore Fund Management (4.02%), Peter Simmonds (0.87%), and Bill Bruno, CEO (0.39%).

Broker Views

Analysts Andrew Darley and Kimberley Carstens at Cavendish Capital Markets have concluded that:

“With contracts, confidence, and visibility, here is a very interesting stock at the wrong price.”

They currently have a 275p a share Price Objective on the stock.

Their estimates for the year to end-March 2026, are for revenues of $23.5m, and a loss of $0.7m for the period, with negative earnings of 0.74c, but paying out a dividend of 3.39p per share.

For the 2027 year they look for $27.0m revenues, $0.8m adjusted pre-tax profits, with earnings of 2.04c, while paying out an increased 3.51p per share dividend.

Over at Canaccord Genuity Capital Markets its analyst Kai Korschelt has a Buy rating on the shares, with 290p as a Target Price.

The analyst is looking for current year, to end-March 2026, sales of $24.7m. an adjusted pre-tax loss of just $0.6m and negative earnings of 1.2p per share, but with the group paying out an uncovered 3.4p dividend.

For the 2027 year the analyst goes for $27.7m of revenues, a $0.9m profit with just 1.7p of earnings and a 3.5p dividend.

Then in 2028 the brokers see $37.9m revenues, $5.4m profits, with 10.5p earnings and a 3.6p dividend per share.

My View

As you can see, the group’s management is confident as it steams ahead under its new accountancy regime, carrying out totally uncovered dividend payments while it undergoes its new process.

Despite the temporary dampening of profitability, as it switches its dependence on to its ARR rather that software and hardware sales, I believe that there is a good run ahead for this group.

Its shares at 166p could well show investors, who understand the switch, with a useful capital growth situation over the next couple of years.

I now set a Target Price of 205p to be easily achieved over the next year.

(Profile 18.08.2025 @ 166p set a Target Price of 205p)