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Cello Group plc: THE INVESTMENT CASE

Cello Group - More to this marketing services specialist than meets the eye

One particular development of note is Cello Pulsar, a social media analytics tool that has, according to the experts, the potential to be a real winner.
Cello Group - More to this marketing services specialist than meets the eye
INVESTMENT OVERVIEW: CLL The Big Picture
Cello's latest development, Pulsar, which is a social media analytics tool

It has been a busy couple of weeks for the healthcare and consumer strategic marketing specialist Cello Group.

But while its successful £15mln fundraise hogged the headlines (along with the significant acquisition it funded) some other developments appear to have passed with little fanfare.

One particular development of note is Cello Pulsar, a social media analytics tool that has, according to the experts, the potential to be a real winner.

“In the right hands, social media data can inform, direct and optimise marketing campaigns,” said Guy Hewitt of City broker finnCap.

Pulsar, coupled with the company’s eVillage online community and its TriggerHub tool, mean Cello ought to be deemed as much a technology specialist as a services business.

finnCap’s Hewitt says the company has been given little credit for its innovations, pointing out that, on price-to-earnings basis, the shares currently trade at a 35% discount to the sector.

“Cello is increasingly leveraging the expertise within the group by developing technology-backed products,” said the analyst.

“This, in our view, significantly increases the potential for profitable growth and the value of the shares.”

Earlier this month Cello outlined plans to raise £15mln through a placing – cash it will use to acquire Defined Health, an adviser to big pharma companies.

It will pay up to £12mln in three separate tranches in a deal that should accelerate the Cello Health division’s push the biotech sector.

Two-legged beast

Cello has two legs to its business. Health provides expertise, processes, intellectual property and market knowledge spanning the pharmaceutical, biotechnology, diagnostics, healthcare equipment and consumer health sectors.

If you want to know what’s going on in a particular area of the pharma business, Cello Heath’s database should be able to fill you in.

The division is split primarily between the UK and US and included on its client roster are some of the biggest names in the pharmaceuticals and biotechnology industries.

Cello Signal, meanwhile, provides “web-centred marketing solutions for big corporates” in the technology, gaming, retail, consumer goods and charities sectors.

Its goal is to “humanise” brands. In other words, to make you realise that even faceless corporate behemoths are actually run by real people.

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