Recovering advertising spending among large US pharma companies drove a 16 per cent rise in constant-currency gross profits at Cello (CLL) in the first half. The healthcare and consumer marketing specialist, which earns three-quarters of its sales outside the UK, continues to expand overseas and sign up high-profile clients.
Sales rose 12 per cent at Cello's health segment as it targeted the fast-growing biotech industry and added the likes of Pfizer (US: PFE) and Shire (SHP) to its client list. It also acquired UK-based PR business iS Healthcare Dynamics, enhancing its domestic presence, while several clients appointed Cello Health as their preferred supplier worldwide. Those gains look set to continue as the division expands in Chicago and San Francisco.
It was a similar story at Cello's signal division, which provides digital and tech-based marketing services to clients such as Tesco and HP. Pulsar, its social media analytics solution, has now been licensed to more than 60 customers, compared with 14 last year. That nearly tripled the product's annualised licensing revenues to £1.1m. The signal unit remains far less profitable, however, with an adjusted operating margin of 7.6 per cent, compared with 21 per cent for health.
Broker N+1 Singer expects full-year pre-tax profit of £9.5m, giving EPS of 7.8p, up from £8.5m and 7p last year.
| CELLO (CLL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 94p | MARKET VALUE: | £79m | |
| TOUCH: | 92-95p | 12-MONTH HIGH: | 95p | LOW: 62p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 84p* | NET DEBT: | 14% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 71.5 | 1.8 | 1.3 | 0.64 |
| 2014 | 78.3 | 3.4 | 2.8 | 0.80 |
| % change | +9 | +92 | +116 | +25 |
Ex-div: 2 Oct Payment: 7 Nov *Includes intangible assets of £74.4m, or 88p a share | ||||
