Cello Health Share Discussion Threads

[davidosh] 28/4/2011 13:40

Just to mention that the company have today announced that the AR and accounts are available plus date of the AGM. I will be attending as it is the morning after our monthly Mello event and I will have a large number of investors in town who may wish to come along too.RNS as follows;

Cello Group (AIM:CLL, 'the Group') confirms that its annual report and accounts for the year ended 31 December 2010 has been posted to shareholders and is also available on the Group's website: www.cellogroup.com

The Group also announces that the Company's Annual General Meeting will be held on Tuesday 17 May, 2011 at 12.30pm at the Group's offices, 11-13 Charterhouse Buildings, London, EC1M 7AP.

Any more from here coming to the AGM ? I will keep a running list...

Elwyn (TMF)
davidosh
GHF
devymaster (TMF)

[santangello] 28/4/2011 09:07

Buying momentumn gaining.....nice 50k buy gone thru.....and it wasn't me lol.

[santangello] 27/4/2011 23:37

Trading statement in May and AGM results due soon too.

A shrewdie tucking more away :) Ridiculous price to buy.

I have been adding for many months.

CLL are my core holding.

[qs9] 27/4/2011 22:52

Looks like lack of interest / low volumes IMO....have tucked a few more away for next RNS update.....

[grahamite2] 21/4/2011 17:58

I've just been looking at the dividend history with a view to a long term purchase. They are small, but at least there are dividends. This pullback seems to give a good time to buy.

[santangello] 21/4/2011 17:22

Nice price to pick a few more up. MMs fleecing tiny sells by PIs......

Company story is excellent, as is forecasted growth, as were results.....so a solid add for me.

[santangello] 06/4/2011 12:43

That looks like the last of the 'results traders' out then perhaps?

Now to regain the upward momentumn, following those results, and after seeing all the positive buy recommendations and revised brokers forecasts.....we will not be at these levels long, obviously.

[welsheagle] 06/4/2011 07:35

Cello Group plc

06 April 2011

6 April 2011

Cello Group plc

Senior appointment

Cello Group plc (AIM: CLL, "Cello" or "the Group") is pleased to announce the appointment of Stephen Highley as Group Corporate Development Director, reporting to the Board of Cello.

Stephen Highley was one of the three founders of MSI, which was acquired by Cello in 2007 and which is now the Group's primary pharmaceutical consulting business. He has spent the majority of his career in the pharmaceutical sector, working on a wide range of strategic and marketing related issues for major pharmaceutical clients. He has worked closely with the Board of Cello on the preparation and execution of the group's healthcare strategy, most recently including the acquisition of MedErgy HealthGroup Inc. in March 2011.

Mark Scott, Chief Executive of Cello, commented

"I wish to congratulate Stephen on his new role. Cello is committed to strengthening its position as a leading global service supplier to the pharmaceutical and broader healthcare sector and Stephen will bring both his detailed sector knowledge and huge energy to fulfilling this strategy."

[interceptor2] 29/3/2011 09:43

From Growth Company Investor = Buy recommendation see below..

Marketing research venture Cello Group (CLL) has unveiled a strong set of results for the year to December, driven by a growing number of pharma customers as the company moves away from the public secort

The AIM-quoted concern unveiled a swing into the black, reporting pre-tax profits of £4.9m (2009: loss of £5.7m) on turnover up one per cent to £125m.

Cello's Oxford-educated CEO Mark Scott told Growth Company Investor that there had been a number of changes that had taken place of late at Cello. 'Public Sector revenue has fallen from 20 to six per cent yet we have shown revenue growth.'

Scott added the company was focusing on growing in two areas: pharmaceuticals and the US. Opining that pharma was an area that was 'interesting, stimulating and driven by entry barriers' he remarked the target was to generate half of Cello's revenue from the healthcare and pharmaceuticals market in the coming years.

The Clerkenwell-headquartered outfit also announced the acquisition of MedErgy HealthGroup, a 'healthcare communications consultancy' based in Pennsylvania in a deal worth $5.5m. Scott remarked that with 20 employees already in San Francisco and 20 in New York, the deal represented a further step towards Cello's aim of growing further in the US.

Cello also announced that it would be issuing 5.33 million new shares at 52.5p to raise £2.8m, the placing shares have been taken up by new and existing institutional investors.

Following the results, analysts at Altium held their existing forecasts. For 2011 the analysts are forecasting pre-tax profits of £7.6m on sales of £67.3m. In 2011 Altium expects growth in profits to £8.5m on turnover up £3.4m to £70.7m. EPS forecasts of 7.3p and 7.5p are pencilled in for 2011 and 2012, respectively.

Last recommended by Growth Company Investor in January at 57.5p as a speculative buy following an encouraging trading update, the shares are currently trading at 55p.

Trading on less than eight times earnings and with some ambitious plans for growth in the US, we think the shares continue to represent good value. Following the latest results we now rate the shares as a buy.

[welsheagle] 25/3/2011 19:25

Stock to Watch: Cello Group
Fri, 25/03/2011 - 00:00 | Edmond Jackson

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Since I drew attention to AIM-listed marketing services group Cello (CLL) in January 2010, its shares doubled from a 30p range and now settled back at 55p range as the company has just increased its shares in issue by 11.1 million to 72.8 million in order to finance a US acquisition.

This small cap sub-sector is unfashionable (hardly any brokers cover it), yet Cello merits renewed attention. It is a firm with a solid underlying financial record; a strategy to diversify its earnings intelligently abroad; and while investors may need patience its risk/reward profile looks favourable.

The development has encouraged small cap funds such as Ennismore European, which has a good long-term record, to increase its exposure above 6% of Cello shares. Although only involving a modest £2.4 million exposure, this is a relatively illiquid share, hence the move demonstrates confidence to become "locked in" like this.

The investment rationale might be summarised "top down" as marketing services being a cyclical play on global recovery, with a strong exposure to healthcare/pharmaceuticals possibly mitigating downside risk; and "bottom up" as scope for improvement in a forward price-earnings multiple of just seven times. Although the yield is nothing special, less than 3%, there is a consistent record of dividend payments; it is not as if a low P/E is warranted by periods of financial distress.

US expansion eyed

The 15 March prelims showed a £0.8 million exceptional charge related to downsizing the business serving the public sector, with strategy prioritising growth abroad - targeting multinationals outside the relatively mature UK market which represented over three-quarters of 2009 group revenue. International now accounts for 40% of revenue on the main research and consulting side.

Medergy HealthGroup Inc, a Pennsylvania/London based company in healthcare communications, is being acquired for an initial £6.2 million equivalent, split between shares and cash, with a £2.1 million equivalent earn-out. It is a relatively small deal in context of Cello's £39 million capitalisation, if one that builds exposure to healthcare and the US. In 2010, 75% of group revenue was UK-derived, with continental Europe about 15% and the US less than 10%.

From cellogroup.co.uk you can see a spread of industry client exposure.

A placing to raise £2.8 million was struck at 52.5p a share so it is quite likely, the price consolidates here until there is new information on progress. This could be a long-term buying opportunity after the price otherwise reached 62p in January.

The 2010 results need deciphering however since Cello's flat overall revenue shows the need to bolster performance - such as via acquisitions. Management will need to show it can offset the dilution with better top-line performance.

Highlights emphasise headline operating profit up 21% to £7.3 million and reported operating profit of £5.7 million against a prior year loss of £4.9 million; however revenue rose just 1% near £125 million and the profit "turnaround" largely results from a near £9 million goodwill impairment charge taken in 2009 also nearly £2 million in restructuring. These are main reasons why 2010 administrative expenses fell by over 15% to £54.5 million.

Earnings per share worked out at about 5.5p, hence a price-earnings multiple of 10 times currently. This is a tad below Cello's normalised EPS figure of about 7.5p since 2007, with a resumption projected for 2011-12. Alium Securities, the company broker, projects £7.6 million pre-tax profit this year, rising to £8.5 million in 2012, earnings per share rising more modestly from 7.3p to 7.5p as a result of extra shares issued.

The implied, lowly P/E multiple of seven times, looks to pretty fully factor in the risks. Company REFS shows an average P/E close to 20 times during 2007, then down below five in 2009 and 2010. Such volatility often typifies small cap cyclicals and can offer long-term trading opportunities.

Pallid recovery looms

Caution probably results from wariness over UK economic prospects which are in focus again after a difficult Budget with little room for manoeuvre. Recovery here may be anaemic, unlike from previous recessions in the early 1980s/90s. Even so, management's outlook statement is robust: "optimistic that the higher levels of client activity, particularly in the research sector, seen in the last quarter of 2010 and so far in 2011, will continue."

On the main research and consulting side, Cello's New York office "has performed strongly and is expanding rapidly" and there is intent to expand the US West Coast office more aggressively this year amid new client wins. A small office has also been opened in Switzerland serving pharmaceutical clients and 2011 marks a concerted effort to expand into Asia. The operating review cites a 27% rise in operating profit "reflecting continued strong spending patterns by our broad international blue-chip client base", especially in the second half, although I stand by my remarks regarding the drop in admin expenses turning around group operating profit.

In communications (the fourth-largest direct marketing company in the UK), profit was overall stable and a Beijing office is being opened also to serve as a hub for Research and Consulting.

As to be expected from a "people business" the balance sheet is goodwill-heavy with £71.2 million goodwill in context of £58.2 million net assets. Net debt has fallen from £11.5 million to £8.8 million as post-tax net cash flow from operations rose from £4.6 million to £7.1 million. This reduction should help the income statement as a net interest charge around £0.8 million has tended to clip operating profit by about 15%.

In conclusion, Cello is the kind of small cap cyclical that tends to get overlooked in challenging times; yet is repositioning itself well having taken necessary charges and dilution to address international opportunities - prudently, without a step too far. If management can show it can get EPS back to 7p with scope to build further, the rating ought to improve such that it becomes possible to target a 70p range for the shares.

This implies about 50% upside, if still below Cello's 115p to 155p trading range before the recession. Meanwhile, the downside risk from 55p should be limited.

[qs9] 16/3/2011 07:12

Good astute use of placing IMO, keeps balance sheet under leveraged which is no bad thing, deal still earnings enhancing, boosts scale overseas.

[interceptor2] 15/3/2011 23:27

Investors Chronicle comment, found from another BB.

Cello changing its tune

Created: 15 March 2011 Written by: Malar Velaigam

Cello continues to drive its research and consulting (R&C) business as it moves away from traditional direct marketing.

This area of the business increased like-for-like profits by 27 per cent to £6.9m on flat revenues, mainly because operating margins improved 3.4 percentage points to 18.8 per cent as trading conditions normalised.

The group's healthcare sector focus helped to maintain sales levels in the R&C unit at £59.9m despite the slump in public sector spending.

Encouragingly, the public sector now accounts for only 6 per cent of the unit's revenues, down from 20 per cent 18 months ago.

This should shrink further as, alongside the results, Cello announced the acquisition of US-based healthcare consulting group MedErgy, which boasts Johnson & Johnson and Pfizer as clients.

Chief executive Mark Scott says MedErgy will help drive growth in both overseas markets and the pharmaceutical sector - two key areas for Cello.

Communications business, Tangible, generated a fifth of revenue from R&C which helped increase the unit's operating margins to 9.4 per cent from 8.1 per cent last year.

Altium are expecting 2011 adjusted EPS of 7.3p (2010: 7.2p), rising to
7.5p in 2012.

CELLO (CLL)

ORD PRICE: 55p MARKET VALUE: £33.9m

TOUCH: 54.5-56p 12-MONTH HIGH: 62p LOW: 27.5p

DIVIDEND YIELD: 2.6% PE RATIO: 9

NET ASSET VALUE: 95p* NET DEBT: 15%

Year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per

share (p) Dividend per share (p)

2006 75 3.50 7.4 1.00

2007 108 4.60 8.40 1.20

2008 138 4.20 6.5 1.25

2009 124 -5.75 -11.3 1.30

2010 125 4.93 5.9 1.43

% change +1 - - +10

Ex-div: 10 Jun

Payment: 8 Jul

*Includes intangible assets of £72.3m, or 118p per share Aim: media
More analysis of company results

More share tips and updates..
.
TIP UPDATE:

Buy

Cello is transforming itself into a niche international media business, which should bolster margins, and shield revenues.

The shares have gained 49 per cent since our buy tip (37p, 29 July 201037p, 29 July 2010) and, rated on 7.5 times 2011 earnings estimates, they remain a buy.

Last IC view: Buy, 46p, 14 September 2010

[santangello] 15/3/2011 08:05

Agreed Coop

[coopstock] 15/3/2011 08:03

Also worth noting that Alan Rich the Chairman, who's down a fortune buying in £1.20-£1.40 range, is picking up 400k more of new shares. Exciting times.

[santangello] 15/3/2011 07:58

Outstanding performance.

Institutions onboard.

Acquisition earnings enhancing immediately.

[interceptor2] 15/3/2011 07:55

Good results beating forecasts and a shrewd looking acquisition and placing, which will increase business in the USA where the growth is.

ic2..........

[coopstock] 15/3/2011 07:51

I couldn't work out why there wasn't more institutional buying. Now we know. 5m+ new shares placed at 52.5p. Quite a vote of confidence.

[interceptor2] 14/3/2011 09:49

One year chart is a classic example of base building consolidation before a major advance with 3 distinct bases.

Mid April 2010 to Mid 2010 before major break out.

October 2010 to end of December 2010 then another break out.

Mid January 2011 to now with a break out target at 63p.

If tomorrows results are as good as indicated in the last trading statement which was about the strongest I have seen this year. It should see another major advance.

Regards ic2......

[davidosh] 13/3/2011 01:05

Thanks Santangello I will take a look at STF if you think they are worth some research. My main holdings are LOQ,NPE,TFW and RGD. The first three I have held for five years each at least. What is it you like at STF ?

[santangello] 12/3/2011 22:34

Cheers dd.....30p was an astute purchase.........(as ever).

I am averaging from 44p upwards.

Here's to Tuesday.

May I ask dd, are you in STF?

[davidosh] 11/3/2011 23:27

I do not think we want to hear that they may take it private as that often means a delisting these days. Anyway the results will show the progress that is being made and having invested heavily at 30p when they did not seem to budge for months and months and nobody was interested in Cello I think I can cope with 60p for a little while longer !

[santangello] 11/3/2011 23:18

Stonking performance today....all things considered....

Results on Tuesday......

With a strong finish by the Dow, these should easily move up on Monday...MMs were keen to do that today............


s/p way too low for me (and the Directors, who may take the company private?)