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Cello Group confident of meeting full-year expectations after solid first half

The Cello Health unit led the way as it grew organically and via the acquisition
Cello Group confident of meeting full-year expectations after solid first half
The company is a specialist in healthcare marketing

Healthcare marketing specialist Cello Group PLC (LON:CLL) said it was confident of meeting full-year market expectations after a solid first half.

The Cello Health unit led the way as it grew organically and via the acquisition of Defined Health for £15mln in February, which cements its focus on the US.

WATCH: Cello Group continuing their push into the US market

It also bought Advantage Health for £1.1mln after the period-end.

Cello saw headline pre-tax profits grow 8% to £4.6mln in the six months to June 30 on revenue of £78.7mln. Like-for-like gross profit growth was up 5%, revealing the underlying business is performing solidly. The dividend will rise 5% to 1.05p.

Outlook good

On the outlook, it said the group continues to trade well, with Cello Health once again the stand-out performer.

"It has been an encouraging first half for the group,” said chief executive Mark Scott.

WATCH: Cello Group 'resourcing up and expanding' - CEO Mark Scott

“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."

Cello has two legs to its business

Health provides expertise, processes, intellectual property and market knowledge spanning the pharmaceutical, biotechnology, diagnostics, healthcare equipment and consumer health sectors.

If you want to know what’s going on in a particular area of the pharma business, Cello Heath’s database should be able to fill you in.

The division is split primarily between the UK and US and included on its client roster are some of the biggest names in the pharmaceuticals and biotechnology industries.

Cello Signal, meanwhile, provides “web-centred marketing solutions for big corporates” in the technology, gaming, retail, consumer goods and charities sectors.

Its goal is to “humanise” brands. In other words, to make you realise that even faceless corporate behemoths are actually run by real people.

Pulsar has potential

It has also developed Cello Pulsar, a social media analytics tool that has, according to the experts, the potential to be a real winner.

“Pulsar continues to grow fast, backed up by an increasingly close and evolving relationship with Facebook, demonstrated by the recent confirmation as a Facebook Insight Partner,” the company’s results statement said.

It now has 290 clients in the UK and 20 in the US, including a growing number of pharmaceutical clients. 

READ: Cello Group enjoys strong first half, on track to deliver full-year results in line with expectations

Monthly recurring revenue at June 30 was just over £430,000. 

This has risen from £260,000 at the same point last year.

Extra investment in account management has grown the renewal rate to around 80% by the end of June,” Cello said.

“Further investment is planned in the US market which represents Pulsar's largest opportunity for growth,” investors were told.

A tech company 

Pulsar, coupled with the company’s eVillage online community and its TriggerHub tool, mean Cello ought to be deemed as much a technology specialist as a services business.

The shares, up 30% in the year to date, rose 0.98p to 132.48p, valuing the business at £138mln.

“It seems reasonable to assume the share price is supported by the core healthcare business,” said analyst Guy Hewett.

“As we argued when initiating, Pulsar is in for free despite its potential to be a very valuable asset in a rapidly evolving market (how would Silicon Valley value this potential?).” 


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