NEWS6 July 2011

Cello warns of retail losses, but says first half ‘good’

Financials UK

UK— Cello’s research and consulting division has seen “good” like-for-like revenue growth in the first six months of the year – but 1 July brought news that a “single large retail research contract” had been lost following a tender.

The identity of this retail client was unconfirmed at press time, however Cello also advised shareholders that a second smaller retail client – the DIY chain Focus – had recently entered administration.

These developments have prompted Cello to seek to reduce costs tied to the servicing of these contracts. This will include staff cuts, though CEO Mark Scott said the number of jobs to be affected was still being “quantified”.

It has earmarked £500,000 for severance payments and associated costs, and says that full-year headline profits before tax will be “slightly lower” than previous expectations.

However, Cello said: “Based on the group’s positive trading in other areas during the first half of the year, and its strong current pipeline of client activity, the group may be able to mitigate this impact.”