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Cello Health strengthens position in healthcare advisory market

Snapshot

  • Two divisions: Cello Health and Cello Signal
  • The group's dividend has risen every year for the past 13 years
  • Expansion in the US is key to future growth
  • Suitable acquisitions are being mulled to speed this aim
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Quick facts: Cello Health PLC

Price: 113.9999 GBX

AIM:CLL
Market: AIM
Market Cap: £121.63 m
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What Cello Health does:

Cello Health PLC (LON:CLL) calls itself a healthcare-focused advisory group.

It has two arms: Health, which provides expertise, processes, intellectual property and market knowledge spanning the pharmaceutical, biotechnology, diagnostics, healthcare equipment and consumer health sectors.

And Signal, which provides “digital, social media and branding expertise” to companies, and is increasingly focused on health having previously been focused sectors such as technology and retail.

Cello’s big claim to fame is that it works with 24 of the top 25 pharmaceutical companies around the world.

How it is doing:

In an update in early April, Cello said it will pay an interim dividend on 22 May and reported "in-line" trading in the first quarter of 2020 and “good revenue growth”.

The company added that it is aiming to declare a special dividend either before or alongside the next interim dividend, subject to future trading performance and outlook.

For the year ended 31 December, the healthcare advisory firm reported a headline pre-tax profit of £13.1mln, up 6.6% on the prior year, while net revenues jumped 6.7% to £107.6mln.

Cello also reported that profit margins had risen to 19.3% from 18.5% in 2018 and that the year had seen an “ongoing expansion” of its pharmaceutical and biotech client base.

As a result, the company raised its full-year dividend by 6.5% to 4.1p per share.

Inflexion points

  • In February, Cello reduced the consideration for the sale of its social media analytics business to Access Intelligence PLC (LON:ACC). Cello will make a cash payment of £1.6mln to correspond to a shortfall in the net assets of Pulsar Platform below the agreed target level at the closing of the deal, with Access Intelligence also buying back 4,076,238 of its own shares to reduce the purchase price for one pound. 

  • In October, Cello sold social media analytics business Pulsar to Access Intelligence PLC (LON:ACC) in exchange for £4.5mln worth of shares.

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What analysts say

House broker finnCap said in a note in April that Cello’s "ability to deliver the majority of its services remotely, the defensive nature of its healthcare client base (82% of historic net sales), management action and the strong financial position means the group is very well placed to weather the storm and then resume its established growth path".

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Cello Group name change reflects growing credibility in healthcare, says CEO...

Mark Scott tells Proactive that the name change to Cello Health Group PLC ([email protected]) highlights the sharpened focus of the group, while the US now accounts for almost half of profits. More acquisitions are likely, he adds, with the infrastructure and firepower in place to handle more...

on 22/3/18

2 min read