Cello Health Share Discussion Threads

[stegrego] 17/5/2010 20:22

Hoodless B

Cello Group (CLL, 33p, £20.26m) AGM trading statement will confirm Q1 has continued the profits recovery seen in Q4 with a more normal trading pattern. Forecasts of between 6.1p and 7p EPS put the group on a very reasonable 4.7x to 5.4x, so we maintain our BUY stance with a 42.75p price target.

[interceptor2] 17/5/2010 16:13

It's nice to have a quiet thread sometimes, and no interest on a day like this. I took advantage this morning and had a modest top up, but plan to buy the rest of my holding into strength.

Eventually..........

[stegrego] 17/5/2010 15:09

Seems like a good update, but no one is interested it seems at the moment.

[glasshalfull] 17/5/2010 14:31

Thought we might have had some further comments on the thread but it appears that a few posters may well have departed.
I'll be interested to find out if Altium have upgraded on the back of today's positive statement.

Very good medium term proposition IMO and of course Director buying would
be the icing on the cake.

Regards
GHF

[interceptor2] 17/5/2010 08:21

I agree this is the kind of confirmation I was looking for, I like the tone of the statement which shows the increasing confidence in the business from the directors.

The price hasn't moved yet, but I'm not surprised looking at the price action of some other companies today who have fallen on some strong statements.

rm. and mto for example.........

[glasshalfull] 17/5/2010 07:19

Nice positive statement. Exactly what we hoped for.



AGM statement
 
Cello Group (AIM: CLL, 'Cello', or 'the Group'), the leading independent market research and consulting group, announces that at the General Meeting this afternoon, Chairman Allan Rich will say:
 
"We have continued to make a solid recovery in our profitability in the first quarter of the year, continuing the trend of our stronger fourth quarter in the last financial year.
 
"Client activity in research has settled into a more normal pattern after the disruption seen last year, with a notably strong performance in health related activity and from international research mandates. Our Tangible division is also performing as expected.
 
"Across the group we are benefiting from the overhead reduction programme implemented during 2009, particularly where we consolidated operations into larger professional hubs.
 
"The Group has therefore performed strongly during the first quarter of 2010.  While there remains economic uncertainty, we are growing in confidence about the Group's performance."


Regards
GHF

[glasshalfull] 13/5/2010 22:51

Huntsworth RNS today;



NED buy 10,250 @73.6p

Not a massive amount granted, but reassuring for the HNT shareholders.
It would be nice to see CLL Directors providing a similar level of reassurance - doesn't need to be a large purchase but several Directors buying would certainly provide the market with....what's the word....encouragement!

Regards,
GHF

[interceptor2] 12/5/2010 20:49

I like the fact that cll are placing focus on increasing business in the USA in the research division. This is where the best growth is imo, when I read statements from companies that have a presence in the US it is clear that the economy is growing over forecasts.

I admit that turnover in the US is small compared with the UK , but we normally follow them and I'm sure it won't be different this time.

"The research business has continued to grow worldwide, with international work now accounting for 46.4% of divisional activity (2008: 42.3%). The Group plans to expand its US presence organically in 2010, building on its successful existing operation in New York. The Group has appointed Simon Dannatt as Managing Director, Cello USA. Simon was previously Chief Executive of Optimisa PLC. "

[welsheagle] 12/5/2010 19:37

Figures look good, but will only buy when the Directors are doing the same.

[glasshalfull] 12/5/2010 16:30

7.0p EPS pencilled in for the current year with further 20% growth in EPS factored in for 2011.

So, PER 4.8 for coming year with PER 3.99 for 2011.
Far too low IMHO and if conditions/prospects do indeed continue to improve then I see potential for upgrades....Altium noted this very fact in their update of 2009 results.

Regards,
GHF

[glasshalfull] 12/5/2010 16:24

I agree re. Chime. It looks good value.

As for Cello, 46% of research revenues derive from abroad with MD recently appointed to drive growth in the US. I'm hoping that Next Fifteens comment re. strong recovery in its US business will therefore spill over to Cello.

The market has been (understandbly) concerned with CLL's earnout obligations and increasing debt levels while they were also hit with the double whammy of issuing shares as part of earnout obligations way below the price that would have been anticipated a few years back. As a consequence they have suffered disproportionate dilution to a degree given that they were not in a position to settle purely in cash.

However, the 2nd half of 2009 indicates that the markets worries are unfounded. Net debt was £14.8 million at the interim stage and this had reduced further to £11.5 million at year end. Earnouts are down to £6.1m which will be spread over the next 3 years.
Given their strong cash generation, £4.3 million of costs stripped from the business and prospects improving - especially research which accounts for 60% of the business at margins that have held up well in the mid teens - then I'm hoping that an AGM statement confirming the improvements will result in CLL coming off market lows in terms of share price and enjoying a re-rating which many of their peers have experienced over the last 6 months or so.

Regards,
GHF

[interceptor2] 12/5/2010 15:48

As you say many of these companies have seen a re-rating, but not with Cello yet even though the whole sector outlook seems to be improving. I was interested to read the Chime statement this morning which I have had on my watchlist for some time, but unfortunately missed the boat. But I think it still has further to go.

[glasshalfull] 12/5/2010 13:12

Good to see you inceptor2.
I'm also looking for confirmation from Cello that their trading has continued to improve on the 17th May.

You have mentioned 4 Imprint and I've listed a further 3 announcements below (plus Creston earlier in the thread) which suggest things are indeed getting better.

Interesting announcements from peers Chime and Huntsworth over recent days.

Chime



"Our new business pipeline is full with the value of new business wins in the first quarter of 2010 over 30% higher than the same period in 2009, which was a record performance for the company. 77% of forecast operating income for 2010 is now committed, compared to 75% at this time last year."

Huntsworth



"..reports significantly higher net new business activity in Q1 of 2010 compared with Q1 2009.
Net new business wins were up 33% on a like for like basis and the Group now has committed revenues of 80% against its rising revenues targets for 2010. The Group is trading in line with management revenue and profit expectations and expects to return to revenue growth during the summer."

Results were also relesed by Next Fifteen a fortnight ago which also confirmed improved market conditions;

Next Fifteen



"To date, the Group has seen a strong recovery in its US and Asia businesses with more moderate improvements in the UK and mainland Europe. A full recovery for all markets is expected by 2011."


Kind regards,
GHF

[interceptor2] 05/5/2010 12:07

Recently brought in here, and good to see some familiar names already here.

CLL seem to have been left behind by other Media companies, yet they have reported higher levels of activity particularly in the research sector in the last quarter of 2009 and in the early months of 2010 just like many others in this sector.

4 Imprint (four) for example also reported the start of a modest increase in business in November 2009. Once they confirmed this in April with a Trading update the price increased 25% on the day.

I know the companies are fairly different and have different geographic cover, but with the AGM on 17th May it could provide the confirmation of continuing improvements during Q1.

[stegrego] 30/4/2010 22:47

Well the announcement did nothing to the price.

Also, the shares are going to employees and the vendors.

Employees will presumably know how the company is doing so shouldnt sell if things are going well. Vendors may have a bit of inside knowledge.

Who knows - but i think theyd be a bit daft to sell near these lows.

[coopstock] 30/4/2010 17:28

Anyone have a view on what that increase in share capital will do to the share price - will it get in the way of the recovery or will impact be irrelevant compared with trading update.

[glasshalfull] 30/4/2010 17:06

We must be a patient lot ;-)
Far prefer the quiet threads.....no hype in the price.

I've not had time to complete a write-up (sorry) but it appears that a few have discovered the undervaluation here.
Content to await the trading update on 17th May. Hopefully find time in due course.

See the issued share capital increased by 5% today under earnout agreements in relation to the earlier acquisitions of Leapfrog and 2CV.

Regards,
GHF

[empirestate] 30/4/2010 16:09

funny how this board has gone relatively quiet when the share price has reasonably broken out

[empirestate] 28/4/2010 13:41

sp really moving with ease at the moment, am looking forward to the agm on 17th may and reckon with no weight on the share price now a decent statement would see this put 20% on from here atleast

[empirestate] 23/4/2010 11:12

maksud, 50p sounds about right to catch up with the rest of the mkt

[diku] 23/4/2010 10:39

Go on tell me who is the bidder?..

[golla] 23/4/2010 09:45

Unfairly treated.Looks very undervalued to me.

[maksud] 23/4/2010 07:54

this has not moved up with the markets .i expect this to be around 45-50p if markets stay at current level.
seen this with lot of stock i hold like yell jumped from 38p to 55p in a week.and others like swg pub eti.

[empirestate] 22/4/2010 18:48

diku, nothing doing there fella but wishful thinking. will post a full analysis of the fundamental scores here later.

[diku] 22/4/2010 16:01

Ok who is the bidder?..