Cello Creates New 'Health' and 'Consumer' Divisions

Research group Cello has revealed that it has spent £600k in the last year on consolidating operations and reducing headcount in its Research and Consulting division; and is now splitting its business into two new divisions.

The restructure aims to reverse a 'deterioration' in the division's performance in the first six months. In March, Cello reported revenue up 7.2% to £133m and a 6.6% increase in gross profit to £64.3m, driven by its Research and Consulting arm, which includes Leapfrog, 2CV, MRUK, RS Consulting, Insight Research Group, and MSI. At the same time, however, it has been cutting costs: in June, the group closed consumer specialist Leapfrog Research's Windsor-based headquarters and moved it into sister agency RS Consulting's offices in London, while last summer, research staff were made redundant, after the division lost two retail research contracts.

In a trading statement issued this morning, Cello said it had taken action to consolidate operations and exit leases where possible, while reducing headcount, following an industry-wide slow-down in some of its non-pharmaceutical research activity.

Despite this slow-down, the group said the Research and Consulting division had traded in line with expectations for the first six months of the year, and had reported a 'strong performance' in its pharma and health activities, off-setting a relatively weak performance in some areas of its consumer insight arm.

CEO Mark Scott (pictured) says the group is restructuring under two divisions - Cello Health, which will include certain elements of the company's general qual research capabilities - and Cello Consumer, which will encompass Cello Communications and consumer insight.

Interim results, which will now be reported under these two divisions, will be announced on 19 September 2012.

Web site: www.cellogroup.co.uk .