NEWS28 January 2013

Cello hints at solid recovery in 2012 after restructures

Financials UK

UK — Cello Group, parent company of research agencies 2CV, Face, RS Consulting and Insight Research Group, has posted a pre-close trading update for 2012, indicating that the company achieved a “solid recovery, with the stabalising of headline profit margins.”

The company, which aligned its various businesses under a new structure which divides the group into Cello Health and Cello Consumer, last year, said it would be reporting solid trading for the year, in line with headline expectations. Preliminary results will be announced on 13 March.

The company says that Cello Consumer – made up of Leith Group, 2CV, Face and Brightsource Group – acheived a second half recovery “after a challenging first half to 2012, reflecting a marked slowdown in demand for insight services.”

Impacting on the full year figures are the charge of approximately £1m for restructuring costs incurred in response to the slowdown in the first half and £0.5m of pre-tax losses arose from discontinued activities, exited as part of the rationalisation process. This includes the re-organisation of Cello’s research division – which saw Leapfrog’s Windsor HQ shut down and the agency moving in with sister company RS Consulting in Battersea.

Meanwhile, the Cello Health division – made up of The Value Engineers, Insight Research Group, RS Consulting, Cello Business Sciences, MedErgy, MSI and e-Village – achieved a headline operating profit margin above 20%, thanks to a particular focus on the USA .

All of the core services of Cello Health are now represented in the US market and the company has also acquired Mash Health, a consultancy specialising in advising pharmaceutical and health clients on consumer related brand issues. Jane Ayton, Mash’s CEO, will assume a senior position within Cello Health.

The company, led by Mark Scott, chief executive (pictured), says: “Following the successful restructuring of the group into Cello Health and Cello Consumer, good momentum in client bookings in the last quarter of 2012 puts the group in good stead as we begin the new year. Although mindful of the challenging global outlook amongst multinational clients, the board is optimistic of a solid outcome for 2013.”