Market research and consultancy company Cello's (CLL) consumer business has in the past been something of a poor cousin compared with its fast-growing health business. But in these first-half results the consumer business had something to shout about, with a significant uptick in profitability. The division's operating profit jumped more than fourfold to £1.2m, helped by a pick-up in consumer market research spending and increased activity with financial services clients.
A big push to strengthen Cello's consumer market digital offering also helped as clients lapped up the company's new social intelligence platform, which analyses social media data. Chief executive Mark Scott says that clients like to use Cello's platform to see what the Twitter universe is saying about their products.
Cello Health, which works for nine out of the top 10 global pharmaceutical companies, and remains the company's core profit driver, saw a dip in operating profit from £4.1m to £3.7m as profitability returned to more normal levels. But Mr Scott says spending by its big pharmaceutical clients continues to be strong and he points out that the ultimate aim is to double the size of this business.
Overall, underlying earnings per share rose 5.2 per cent to 3.05p in the first half and, on the same basis, broker N+1 Singer expects full-year EPS to increase by 15 per cent to 6.9p.
CELLO (CLL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 67p | MARKET VALUE: | £55m | |
| TOUCH: | 65p-68p | 12-MONTH HIGH: | 69.5p | LOW: 35p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 739 | |
| NET ASSET VALUE: | 81p* | NET DEBT: | 17% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 62.6 | 1.59 | 1.37 | 0.58 |
| 2013 | 71.5 | 1.78 | 1.30 | 0.64 |
| % change | +14 | +12 | -5 | +10 |
Ex-div: 4 Dec Payment: 6 Jan *Includes intangible assets of £73.5m, or 87p a share | ||||
