Cello Dampens Expectations
January 19 2009
AIM-listed Cello Group plc has issued a trading update for the calendar year 2008, indicating that its results for the full year will be at the lower end of market expectations, but reporting a number of positives concerned with finance and operations.
Cello says that since the announcement of its interim results in early September, trading has tightened across some of its sectors, and based on client statements of intent and public sector client spend, it remains 'realistically cautious about the current outlook'. However, there are several plus points:
- ll of the group's start-up businesses are now trading profitably
- the second half of 2008 has seen very strong cash conversion to the point there the Board expects to report year end net debt of less than £10.5m
- the Group has agreed enlarged banking facilities with the revolving credit facility now increased from £18.0m to £20.0m for 2009, with its overdraft renewed at £2.0m.
- obligations from earn out agreements are now expected to be £15.2m, against previous estimates of £19.2m. £7.8m of this total is anticipated to be settled in May 2009.
- reduction of its cost base has been successful: in total over £2.0m per annum of staff costs have been removed during 2008.
The group also announced that the 2nd September appointment of Allan Rich as Non-Executive Chairman has now been made permanent.
Cello shares have lost about 70% of their value in the past year. Reuters reports that analysts are on average expecting the group to report a pretax profit, before special items, of £7.52m on revenue of £80.47m. Cello expects to announce its preliminary results for the year ended 31 December 2008 on Tuesday 17 March 2009.
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.
