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Cello Health PLC

Cello is confident of a strong performance in 2019

The board believes that the pharmaceutical and biotechnology sector represents a stable and attractive market for the long term

Digital communications
2018 was a critical year in Cello's development, with the renaming of the group to Cello Health

Cello Health PLC (LON:CLL) has begun 2019 with good levels of forward bookings and has already landed a number of new business wins.

The board of the global healthcare-focused advisory group is confident of a strong performance in 2019, in line with the current market expectations.

WATCH: Cello Health Plc makes strong start to 2019 with good order book and new wins

In its results statement covering 2018, the company reported headline profit before tax of £12.2mln, up 6.4% from the £11.4mln reported for 2017.

Statutory profit before tax rose 44.7% to £8.4mln from £5.8mln the year before, on the back of a 2.3% increase in net revenue to £104.8mln from 2017's £102.5mln.

Overall, headline operating profit growth was underpinned by a strong divisional performance from Cello Health, with net revenue up 4.3% on a constant currency (CC) like-for-like (LFL) basis while headline operating profit margins improved to 18.5% from 17.7%.

The company had already flagged that Signal, which provides digital, social media and branding expertise to companies, suffered a dip in the top-line, partially reflecting tougher trading conditions in the UK in the markets Signal serves; Cello Signal's constant currency like-for-like net revenue declined by 2.9% and headline operating margins eased to 9.4% from 9.5% in 2017.

The group enjoyed strong cash flows in the second half of the year and ended 2018 with net funds of £6.3mln, up from £1.6mln a year earlier.

The full-year dividend has been bumped up by 10% to 3.85p from 3.50p the previous year, marking the 13th year in a row that the payout has been increased.

"2018 marked an important moment in Cello's development as we changed our name to Cello Health PLC to reflect our ongoing strategic focus and developed our board to support that strategy,” said Mark Scott, the chief executive of Cello.

“We now intend to build on this momentum to support Cello Health's position as a leading healthcare-focused advisory group globally,” he added.

In a note to clients, analysts at ‘house’ broker finnCap said: “We do not anticipate making any major changes to our forecasts (apart from improved net cash and higher dividend), and reiterate our view that the market backdrop for Cello’s technically based, strategic marketing services is strong and defensive, supporting good growth prospects.”

finnCap has a 145p price target on Cello Health shares, which in afternoon trading were changing hands at 122p each, down 1.2% on Wednesday’s close, with the stock up 10% in the year-to-date.

 -- Adds analyst comment, updates share price --

Quick facts: Cello Health PLC

Price: £1.27

Market: AIM
Market Cap: £134.73 m
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