Recession Takes Tithe of Cello Profits

UK market research and consulting group Cello has warned that gross profits are likely to be down by around 10% for the first half of the year, and says it has cut costs by around 7% to offset the effects of the economic downturn.

Cello's Research and Consulting arm includes Leapfrog, 2CV, MRUK, RS Consulting, Face and MSI. The group confirmed in a statement that while it continues to benefit from its focus on pharma, international, and public sector research as well as marcoms activity, a decline has been noted in qual research and other services where client activity has been slower in recent months.

Its quant UK research offering and its international research business - which make up around 40% of divisional revenues - have remained solid, while the group has also recently renewed two of its largest UK research quant contracts in the public and retail sectors.

In addition, its public sector specialist MRUK has been appointed to conduct a project described as the largest ever undertaken by Welsh Assembly Government, as part of a project planned to help develop and monitor a wide range of social policy activity.

However, the group has experienced a reduction in UK-based qual research work, and has also suffered a decline in its business intelligence and HR research and training units, where it has cut its cost base accordingly.

'The group has continued to take prudent action to adjust the cost base and remains alert to taking further action where necessary,' the company explained in a statement earlier. 'Therefore, the Board believes that full year headline operating profit in line with the current market consensus is achievable.'

Cello plans to announce its interim results on 15 September 2009, when it will also outline details of the cost-reduction actions it has taken.

Shares fell 11% to 33.5 pence in this morning's trading on the London Stock Exchange.

Web site: www.cellogroup.co.uk .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• 2CV
• All news
• MrWeb info