Share price: 162.00p

Pre Close Trading Statement

19th January 2017

Cello Group plc

Pre close trading statement

Cello Group plc (AIM: CLL; “Cello” or “the Group”), the healthcare focused strategic marketing group, today announces a trading update for the year ended 31 December 2016. The Group has delivered an encouraging trading performance in the year, with gross profit and headline profits in line with consensus market expectations.



  • Good like-for-like gross profit growth at Cello Health, with the US remaining a key growth driver.
  • Strong like-for-like growth in gross profit and improved double digit operating margins by Signal.
  • Excellent performance from Cello’s growing suite of software-enabled products, most notably Pulsar,  providing increased future gross profit visibility.
  • Strong balance sheet, despite settlement of VAT liability in July, reflecting solid cash flow conversion for  the period.
  • Increased dividend pay-out in line with intention announced during 2016 to distribute c.40% of headline  earnings.


Cello Health:

In 2016 Cello Health made solid progress against its core strategic goals. Overall the core service lines of Cello Health Insight, Cello Health Consulting and Cello Health Communications delivered strong levels of like-for-like gross profit growth and maintained competitive margins.

The profile of Cello Health in the key S market continues to grow apace, with US gross profit further increasing as a proportion of total sales, driven by the addition of senior professional resource in strategic locations. Cello Health’s penetration of the faster growth biotech area in the US is progressing well, complementing the business’s primary focus on large pharmaceuticals clients.

Cello Health has also made strides in focusing on marketing its licensed and more recurring gross profit streams. eVillage, Cello Health Insight’s proprietary software research solution, continues to grow well and the contribution from tracker research products has continued to increase, improving longer term income visibility into 2017.

In order to facilitate shared business opportunities and reduce costs, Cello Health has consolidated a number of its core UK business lines into a single hub building in Farnham, eliminating two leases.

Following the tougher trading period experienced by Cello Health Consumer, which has had a dampening effect on the overall Cello Health margin during 2016, Cello Health has reduced its exposure to the consumer market. This action is likely to give rise to a non cash impairment charge of approximately £5.0m when the carrying value of this asset is reviewed for the full year results in March.


Cello Signal:

The consolidation of Signal’s activities behind the Signal Brand and a single board structure has produced clear benefits; gross profit momentum has been strong and operating margins are also stronger during 2016 as a result.

Cello Signal has also put a concerted effort into developing and marketing its technology product suite, both as pure licences and associated project sales. Pulsar has continued to grow very strongly; it is now trading profitably and trading has commenced in the US market. TriggerHub, Signal’s proprietary CRM solutions tool, is also selling strongly.

The overall size of client contracts secured in 2016 has increased. In addition, Signal’s franchise in the key technology sector has evolved strongly during the year, both with pure global technology companies as well as digital games clients.

The completion of the consolidation of businesses behind the Signal brand has given rise to a non headline restructuring charge of c.£1m for the full year.


Balance sheet:

Net debt at year end was less than £5m, reflecting solid cash flow conversion for the period.

Total liabilities of £5.2m were paid to HMRC in July, following settlement of the long standing dispute regarding the VAT status of supplies to charity clients. Regarding collection of a proportion of this amount, terms have been agreed with a number of clients, with other agreements expected in 2017. The ongoing VAT status of these supplies has now been agreed with HMRC.



The Group begins 2017 with good momentum from existing and new clients secured in 2016. The Board is confident that current consensus market expectations will be met.


Preliminary Results:

The preliminary results for the year ended 31 December 2016 will be announced on 22 March 2017.

This announcement contains inside information.


Cello Group plc (
Mark Scott, Chief Executive020 7812 8460
Mark Bentley, Group Finance Director
Cenkos Securities
Bobbie Hilliam020 7484 4040
Sophie McNulty, Jamie Hooper, Madeleine Seacombe020 7466 5000


Notes to Editors (

Cello is a healthcare-focused strategic marketing group.

The Group’s strategy is to create value for shareholders by building a leading global healthcare advisory business under the Cello Health brand, and a leading digital communications solutions business under the Cello Signal brand.

Cello has annualised revenues in excess of £150m, annualised gross profit in excess of £85m and employs over 900 professional staff.

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Cello Health plc

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