12th May 2015
Cello Group plc (AIM:CLL), the pharmaceutical and consumer strategic marketing group, announces that at the Annual General Meeting this afternoon, Chairman Allan Rich will say:
“The Group continues to make good progress, with strong headline revenue growth particularly in Cello Health (www.cellohealth.com).
Cello Health has experienced a good start to the year, with strong headline revenue growth across the business. iS, acquired in May 2014, continues to benefit from new revenue referred from other Cello Health capabilities. Promedica, based in San Francisco and acquired in December 2014, has already enabled Cello Health to establish a foothold in key West Coast US clients. The Group is also delighted to announce the opening of a new Boston office to expand the consulting footprint of Cello Health. The combination of San Francisco and Boston will enable Cello Health to effectively target the high growth Biotech sector. The large contract win announced with the 2014 full year results is bedding in well and has raised revenue visibility levels for the full year and into 2016.
Cello Signal (www.cellosignal.com) revenue continues to grow well organically, benefiting from a number of large digitally led contracts secured in late 2014. The focus remains on the transition to a fully digitally focused platform trading at improved operating margin. Cello Signal has embarked on a series of efficiency measures which in due course will have a positive margin impact. It is expected that the first half of 2015 will be slower than 2014 due to investment in staff costs and the timing of revenues in the recently started high growth US business and a particularly strong first half 2014 comparator due to the one off contract which ran from 2013 to April 2014. The full year for Signal is expected to show good year on year progress.
The VAT issue covered in announcements made in 2014 and with the 2014 full year results, which resulted in a 2014 provision of £2.1m and a contingent liability of £0.8m, is as yet not fully resolved. This is due to the fact that the major industry bodies representing charities and their agency suppliers, The Charity Tax Group and The Direct Marketing Association, have mounted a strong public objection to the lack of clarification of HMRC policy in this area and its implications for charities. The Board will keep shareholders apprised as clarification is reached in due course.
The Board continues to be confident of a successful full year for 2015.