Given that the US is the world's largest market for new drug launches, marketing specialist Cello Group 's (CLL) drive to increase its stateside client base makes perfect sense. More than 60 per cent of healthcare consulting revenue came via US clients during 2016, compared with 40 per cent in the previous year. Overall, the pharma division made 35 per cent of its sales from the region.
To carry on this growth the company acquired Defined Health last month. This will help the group gain further access to the capital-rich US biotech market. A focus on greater collaboration between Cello Health's consulting, insight and communications division also yielded benefits - £11m in revenue.
There was also more cooperation between these divisions and Cello's non-healthcare digital marketing business, Signal. In particular, services offered by its Pulsar platform, which provides digital audience analysis, are becoming more in demand from healthcare clients. Software licence sales reached a yearly run-rate of £4m last year in the UK, while a US office will be opened later this year. Signal grew its operating profit 11 per cent in the reported period, to £4.5m.
Analysts at house broker Cenkos expect adjusted pre-tax profits of £11.4m, giving EPS of 8.1p for the 12 months to December 2017 (from £10.2m and 8.5p in 2016).
CELLO GROUP (CLL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 121p | MARKET VALUE: | £125m | |
| TOUCH: | 120-122p | 12-MONTH HIGH: | 121p | LOW: 87p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 65p* | NET DEBT: | 8% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 135 | 1.4 | 0.2 | 2 |
| 2013 | 160 | 5.5 | 4.4 | 2.25 |
| 2014 | 170 | 3.8 | 2.7 | 2.6 |
| 2015 | 157 | 5 | 3.9 | 2.86 |
| 2016 | 165 | 1.7 | -2.9 | 3.4 |
| % change | +5 | -66 | - | +19 |
Ex-div: 4 May Payment: 26 May *Includes intangible assets of £70m, or 68p a share | ||||
