Share price: 163.00p

Year end 2011 Prelim Statement

13th March 2012

Continuing strong performance

Cello Group plc (AIM:CLL, “Cello” or “the Group”), the insight and strategic marketing group, today announces its final audited results for the year to 31 December 2011.

Headline Summary

Gross Profit1£64.3m£60.3m+6.6%
Headline2 profit before tax£7.1m£6.4m+10.2%
Headline operating margin312.1%12.1%-0.0%
Basic headline earnings4 per share6.71p7.90p-15.1%
Proposed full year dividend1.72p1.43p+20.0%
Net debt£7.7m£8.8m-12.5%


Strong financial performance

    Headline profit before tax growth of 10.2% in line with market expectations.
    Gross profit growth of 6.6% driven by acquisition of MedErgy and like-for-like gross5 profit growth of 2.1% in Research and Consulting.
    Dividend increases by 20% to 1.72p (2010: 1.43p), the fifth consecutive year of dividend growth.
    Reported profit before tax of £1.4m (2010: £4.9m) affected by amortisation, impairment and restructuring costs. Reported loss per share of 0.88p (2010: 5.88p).Good start to 2012, supported by strong momentum from Pharmaceutical clients.

    Balance sheet considerably strengthened

      Strong operating cash flow drives net debt down to £7.7m (2010: £8.8m).
      Earn out provisions drop to £3.2m (2010: £7.3m).
      Enlarged, lower cost banking facilities agreed until March 2016.

       International and pharmaceutical focus enhanced

        MedErgy, acquired in March 2011, has excellent first year.
        International revenue rises to 33.9% of total (2010: 21.2%) driven by organic growth and MedErgy.
        Revenue from pharmaceutical clients rises to 50.0% of Research and Consultancy revenues (2010: 41.5%).
        Cello Business Sciences, Pharmaceutical analytics business launched in 2012 with immediate material new project win.

        Strong growth from digital offering

          Face growing fast, further investment planned
          Award winning online research products – eVillage and e-luminate
          Social media orientated research growing strongly


          1 Gross profit is identified as revenue less cost of sales. Cost of sales includes amounts payable to external suppliers where they are retained to perform part of a project. Cost of sales does not include direct labour costs.

          2 Headline measures are defined as being before restructuring costs, acquisition related employee remuneration expenses, share option charges, impairment charges and amortisation.

          3 Headline operating margin is calculated by expressing headline operating profit as a percentage of gross profit.

          4 Headline earnings per share is defined in note 6.

          5 Like-for-like measures exclude discontinued operations, the impact of acquisitions, and the impact of any reclassification of business between reporting segments.

          Mark Scott, Chief Executive, commented:

          “2011 saw a continuation of the Group’s solid performance and delivery on our strategy of internationalising revenues and growing our pharmaceutical expertise.  As a result we are seeing good momentum in the business, demonstrated by our strong cash flow and considerably strengthened balance sheet.


          “We are confident that our focus on servicing international clients in the pharmaceutical and other high margin sectors with our innovative digital offerings will continue to drive growth. We are pleased to be able to reflect this confidence by raising the dividend for the fifth consecutive year.”

          Year End 2011 Prelim Statement


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