3rd July 2006
Pre Close Trading Statement – six months to 30 June 2006
Cello Group plc (‘Cello’) (AIM: CLL), the research and data led marketing services group, today provides the following pre-close trading update ahead of its interim results for the six months to 30 June 2006. As indicated in the trading statement made at the Company’s Annual General Meeting in May, the Board is pleased with trading in the first half and accordingly expects to announce interims slightly ahead of market expectations.
Cello operates in three sub-sectors of the marketing services industry; market research and planning, brand strategy and consultancy, and direct marketing, digital and database management.
The first half has seen an excellent performance from our research platform which has benefited from the investments made in staff and product offering in the latter part of 2005. We have seen significant revenue growth from existing
clients as well as a number of new client wins. Our international growth has been maintained with the opening of an office in Basel. Further start ups in key international locations are being appraised.
In overall terms our brand strategy and consulting businesses have traded at a satisfactory level in the first half. Based on current revenue visibility and the pipeline of potential new business, we are confident that the platform will
deliver another good performance in the second half.
Our response platform has performed well in the first half showing well above industry average organic growth in both revenues and profit. One of our direct marketing companies, Target Direct, which specialises in the charity sector,
traditionally produces a high percentage of its profits in the final quarter of the year. Based on current client commitments, we would expect that trend to continue.
We have recently strengthened our brand consulting platform with the acquisition of Farm Communications and have today announced the exercise of our option to take a controlling interest in Oomph, a digital and on-line marketing consultancy, formed last year.
In line with our prudent financing policy, Cello has maintained a strong balance sheet with no net debt and has cash available to invest. We are therefore well positioned to progress with our development plans which will include continued investment to accelerate our organic growth and a small number of strategic acquisitions which would enhance shareholder value/earnings.
As highlighted at the time of our preliminary results in March, we intend to commence dividend payments in respect of the current financial year.
The outlook for 2006 remains positive with all three platforms showing good revenue growth and forward visibility. This, together with increasing cross-group opportunities which are emerging, gives us full confidence for the future.
Cello expects to announce its interim results for the six months to 30 June 2006 on Tuesday 5 September 2006.