Cello Cuts Headcount after Retail Client Losses

UK insight and marketing group Cello has reported that its research and consulting division has continued to 'show good like-for-like revenue growth' despite the loss of two significant retail research contracts, but has meanwhile made a number of staff redundancies.

The research division - which includes Leapfrog, 2CV, MRUK, RS Consulting, Insight Research Group, and MSI - has lost one large retail research contract, and work from a smaller retail client, which has recently entered administration. Both clients were unnamed.

While the group has taken 'immediate action' to reduce costs associated with servicing these contracts, predominantly through headcount reduction, Cello expects to incur a full-year exceptional charge of approximately £0.5m. Headline profits before tax are also expected to be slightly lower than previously anticipated.

However, CEO Mark Scott says that like-for-like revenue growth in the research and consulting division has been driven by strong international client spend, particularly in the pharmaceutical sector.

Scott confirmed that MedErg, the US healthcare communications consulting business acquired by Cello in March, had a good first three months, and has recently opened a UK operation to service European clients.

'Cello is fast developing into a global research and consulting business, with a distinctive focus on the pharmaceutical sector,' Scott stated in the firm's trading update. 'Combined with a focused innovation drive, particularly behind social media based research, we are confident that this strategy will deliver strong shareholder value.'

For the six months to 30 June 2011, Cello is expecting to report more than 5% growth in headline profits before tax.

Web sites: www.cellogroup.co.uk .