Cello First Half 'Encouraging' Despite Revenue Dip

UK-based pharmaceutical and consumer insight / marketing group Cello has reported a £2.1m fall in revenue to £78.7m for the six months to 30th June 2017. Like-for-like, constant currency gross profit increased 9.3% in the Health division but fell by 5.0% in Cello Signal.

Cello Health comprises four capabilities: Insight, Consulting, Communications and Consumer, and includes agencies MedErgy Health Group, iS Healthcare Dynamics and Promedic. Cello Signal, which competes in two key markets: direct marketing, CRM, CSM and targeted brand communications; and market research and insight analytics, comprises agencies 2CV, blonde digital, Brightsource, Face, The Leith Agency, Leithal Thinking, Opticomm, Stripe Communications, tangible and TMI.

For the first half of the year, group pre-tax profits were £2.7m, compared with a loss of £0.8m in the first half of 2016. Cello Health Insight reported a flat year on year reflecting a weaker performance on the West Coast of the US, and a continued switch towards longer term tracker and quantitative studies where the revenue is earnt over longer periods of time.

At Cello Signal, the first six months were described as 'solid', and the business is said to be on track to 'achieve expectations': the 5% decline in gross profit reflects the impact of a 'significant one-off contract' in the first half of 2016, the Group says. Operating margin was also impacted by a reduction in operating profits from the research business in the US. Cello says necessary action has been taken here to reduce headcount and property commitments to restore operating margin.

CEO Mark Scott (pictured) commented: 'It has been an encouraging first half for the group. Cello Health's strategy of focusing on expansion in the US is progressing well. The acquisition of Defined Health in February this year has already made a good contribution and we are very pleased with its integration in Cello Health which is also achieving strong organic growth, particularly in the US. Cello Signal is on track to meet expectations. The Board is therefore confident of meeting market expectations for the year and is pleased to increase the interim dividend'.

Web site: www.cellogroup.com .