Cello reports good year – all things considered

UK-- Cello Group's research arm had a “good year given the economic context”, the firm said in preliminary results for 2008, released today.

Revenue was up 30% to £66.4m in the division, which includes MR firms Insight Research Group, Leapfrog and RS Consulting. Operating income increased from £32.9m to £39.1m, but headline operating profit dropped slightly from £6.2m to £6.1m.

Operating margins were down from 18.9% to 15.7%, Cello said. This was down to investment in Digital People – which develops custom data analysis sites for clients – and a reduced profit performance in its business intelligence business. Cello said that Digital People was “trading profitably” in the early months of 2009.

The group said its research businesses “continued to grow internationally” with revenue from overseas clients climbing 25%. It named Pfizer, HM Revenue and Customs, Unilever, Dyson and Orange among major contract wins at home and abroad.

Public sector work was also on the increase, accounting for 11% of research activity last year compared to 6% in 2007. Cello said it expects this area to continue to grow and become “a larger part of our revenue stream”.

Factoring in results from Cello's response marketing division, the group reported a 17.2% jump in operating income to £66.6m – but like-for-like operating income growth was 2%, compared to 16% in 2007. Headline operating profit was down from £8.1m to £7.8m, while headline pre-tax profits fell from £7.6m to £6.9m

Author: James Verrinder

Related links:

Cello figures to be ‘at lower end of expectations'

Cello chairman Steeds dies, aged 50

Recession scuppers Cello acquisition plans