A good performance by its healthcare division kept profits moving higher in 2017 at Cello Group PLC (LON:CLL).
The marketer intends to underline healthcare's growing importance, especially in the US, by a name change to Cello Health Group.
WATCH: Cello Group name change reflects growing credibility in healthcare, says CEO Scott
Signal, Cello’s web-based marketing business, will also now focus more on pharma and healthcare corporates.
“Signal is successfully migrating into a position to support Cello Health and healthcare clients with its digital and consumer marketing services,” said Mark Scott, chief executive.
“In line with reinforcing this growth strategy, the group will be renamed as Cello Health Group plc to better leverage its positioning with all constituencies.”
Revenues in 2017 rose 2% to £169.3mln, and by 2.5% like-for-like, with underlying profits 12% better at £11.4mln.
Pre-tax profits came in at £5.8mln against a loss of £1.7mln.
Current year has started well
Scott added: “The current year has started well and the group is positioned for further expansion in healthcare in 2018 and beyond."
Cello Health picked up 49 new clients in 2017 and has now worked with 24 of the top 25 pharmaceutical companies.
The US contributed 45% of Cello Health's gross profit and 30% of group gross profit, with a stronger dollar also helping last year.
Signal’s profit contribution dropped to £3.87mln as two contracts in 2016 did not repeat.
The dividend for the year rises by 2.9% to 3.5p.
Finncap sets bullish price target
Broker Finncap said that since 2012, Cello has worked on developing a strong, core lead integrated global brand, creating a breadth and quality of service that others will struggle to provide under their disparate corporate structures.
"Cello has to prove the benefits of this move, but with net cash and the potential to also leverage its digital expertise into health there is clear opportunity and, for now, we value Cello at a 20% discount to peers, setting a 145p target."
Shares rose 3% to 120p.
-- adds broker comment, share price --