International expansion buoys Cello research profits
LONDON - Cello Group has suffered a small decline in 2008 operating profits at its market research division but it said targeting multinational clients resulted in "a good year given the economic context".
Revenues from overseas clients grew by 25% in 2008, topping off total headline operating profits of £6.1m, down from £6.2m in 2007.
Operating income grew to £39.1m for the same period ending December 31 2008, up from £32.9m a year before.
With an employee base of 470 and revenue of £66.4m, growing 30% from £50.9m in 2007, Cello said the company ranks comfortably in the top 10 speciality research businesses in the UK.
Operating margins fell 15.7% as a result of investment in online research products and reduced profit performance in its business intelligence investment.
Cello said its healthcare business showed particular resilience in 2008, representing about 36% of operating income, growing 1% from 2007. Public sector work also grew strongly and now represents 11% of Cello's divisional activity, nearly double from last year's figures.
The company claimed a number of high profile client wins throughout 2008, including Pfizer, Unilever, Canon, Dyson, Xerox, Orange and Virgin, among others.
Current forecasts show that headline operating profit for the first quarter of 2009 will be similar to 2008, however given the economic conditions the company intends to "remain alert to the possibility of projects across a range of areas being curtailed or delayed in the future".
Mark Scott, Cello Group CEO, said: "In our core client specialisms of pharmaceutical, public sector, FMCG and quantitative business-to-business activity, we have continued to see growth.
"A substantial portion of these clients, particularly in those sectors less affected by the downturn, have had relationships with our operating units for a number of years.
"This provides us with considerable confidence going forward with what are, in effect, recurring revenues.
"We have made a good solid start to the year and have secured some notable wins. Furthermore, our relatively low exposure to cyclical sectors should benefit us as we continue to invest in expanding our core capabilities to gain market share."
At a group level Cello reported pre-tax profits of £3.8m, down 8.3% from 2007. Revenues totalled £139m, up 28.4% from 2007.
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