Pharma marketing group earned £92.7m in gross profit, ahead of Singer's £88.1m forecast
Companies: Cello Health
Pharma marketing group Cello has given a robust set of preliminary results this morning, showing strong performance in 2016, beating gross profit forecasts, and increasing its full-year dividend by 19%.
The AIM-listed firm hit £165.3m in revenues, a 5.4% jump from the 2015 total of £156.7m, in-line with expectations. Gross profit jumped 7% to 92.7m (N+1 Singers forecast £88.1m) aided by currency tailwinds, whilst earnings fell marginally to 8.66p/share.
Cello Health, one of the firm's core products, grew gross profit by 6.2%, whilst Cello Signal grew 5.5%. Its newest product, Pulsar, has reportedly grown "very strongly" as it entered the US market.
Mark Scott CEO of Cello said the firm was in a strong position to accelerate global growth, focused on the US market:
"Cello Signal is making steady progress against its goals, with the Pulsar social media product continuing to grow strongly, as well as increasingly supporting the digital communications capability of Cello Health."
Broker N+1 Singer struck a positive tone in its note on Cello's update, saying the results and hefty dividend increase was not a surprise given the January trading update. Singers said the outlook for the firm was solid, with Health Consulting very strong and Health Research healthy:
"Cello has been making new highs as investors have backed the business to develop its core Health operation and the news flow on Pulsar has developed. The stock dynamics look very positive, as Cello deploys the £15m of cash raised, earnings will receive a large boost. It seems likely that we will see upgrades driven by this and potentially by upside surprise from Pulsar. With just cash investment in mind there is scope for the shares to exceed 150p. If Pulsar outperforms it could go substantially higher. BUY."
Shares in Cello have jumped 25% since late January, and are up c.1% today.