Cello Forecasts 20% Rise in Research Profits

In its 2010 pre-close update, UK-based Cello Group has recorded a 'strong second half' for its market research and consulting business, and says it expects to report a 20% plus like-for-like rise in operating profits.

During the year, performance in the research and consulting division - which includes Leapfrog, 2CV, MRUK, RS Consulting, Insight Research Group, and MSI - was 'particularly strong' in the pharma and health-related client sectors. Cello says these sectors now constitute the primary area of the group's research and consulting activity, and operate at a higher margin than its other client sectors.

The division's overseas revenues are growing faster than those for the UK and now comprise almost half of its activity. In particular, the group's pharma offering based in the New York office has performed very strongly and is said to be expanding rapidly.

Cello says that as a result of 'significant blue-chip client wins' in 2010, the group intends to expand its US West Coast office more aggressively in 2011.

'Revenue momentum experienced in the research and consulting business in the last quarter of 2010 means that the group is carrying forward a healthy pipeline of activity into the first quarter of 2011,' Cello said today in a statement. 'At this early stage of the year, the group is currently trading in line with management's expectations and the Board remains optimistic for the prospects in 2011.'

Cello expects to announce its preliminary results for the year ended 31 December 2010 on Wednesday 15 March.

As anticipated in Cello's interim results, which were announced by CEO Mark Scott (pictured) in September, Cello has incurred an exceptional charge of approximately £0.8m relating to the reduction of its public sector client spend.

To counter this, in November Cello announced that RS Consulting and mruk would be working in closer partnership to create a 'research powerhouse' for the public sector. This followed earlier news that mruk had closed its operations in Glasgow, Bristol, Cardiff and Newcastle, losing 90% of its staff including MD Jim Law, following public sector budget reductions.

Web site: www.cellogroup.co.uk .