Good morning!

I hope you didn't miss me too much yesterday.


Cello (LON:CLL)

Share price: 97.6p (up 0.1% today)
No. shares: 86.6m
Market cap: £84.5m

Pre-close trading statement - this covers the 6 months to 30 Jun 2016.

This statement is ideally laid out - a brief description of the business first. Then a clear, and simple paragraph giving a summary. Then more detail below, for those who have the time & wish to read it. When we have lots of RNSs to read in just an hour, between 7-8 am, it's very useful when companies issue concise, and clear updates like this.

The Group has had a good first half, with robust performances from the core of Cello Health and from Cello Signal. Accordingly, the Board remains confident that the Group will deliver a strong full year result in line with current expectations.

More detail is given, concerning one division (consumer consulting) which is not performing very well, but this has been absorbed by better performances elsewhere within the group. Cost-cutting has been done, resulting in a £0.6m one-off charge.

Outlook - sounds fairly upbeat to me, and note the robust Brexit-related comment below;

The Group has delivered a good underlying first half, and the Board expects this to continue in the second half.

Whilst profits in the first half will be flat on the prior year as a result of the decline of the consumer consulting unit of Cello Health, overall revenue growth has nevertheless been good.

There has been no noticeable impact on client spending behaviour as a result of the EU referendum vote and income pipelines remain robust.

The Group will also continue to benefit from a stronger dollar in the second half if the dollar / sterling rate remains at current levels. The Board remains confident that the Group will deliver a strong full year result in line with current expectations.

My opinion - the big quandary at the moment is whether or not the UK economy is likely to go into recession? We've had very poor recent PMI data, which correlates closely with GDP. However, most companies that I've looked at are saying that it's broadly business as usual.

Also, a key question to ask with every company now, is what the geographic split of business is. A heavy UK weighting could be risky. Whereas a heavy overseas weighting…

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