Lupo di mare
21 Mar 2017
Results Preliminaries tomorrow, chaps and chapesses. I'm not expecting anything dramatic, but...
Lupo di mare
14 Feb 2017
Re: info I was wondering why they raised the extra money. So brokers reckon its for further acquisitions. I hope so, but I was feeling a tad cautious and trimmed my holding a bit today; although that still leaves me with probably a larger holding than I should - one of the problems associated with a rising sp, lol.Why was I being cautious? Well, i reckoned that either they were expecting to make further acquisitions, or they were going to find that they had a slight problem to own up to; although for the life of me I don't know what that could be.They say that they'd only buy companies that they know well, and quite right too - don't want the consultants walking.Fingers crossed, as always.
forwardloop
10 Feb 2017
info Finn cap 132p tgt from shares mag Cello has US biotech opportunity in its sightsBig demand for shares as marketing firm builds war chest for acquisitionTom Sieber An oversubscribed fundraising (1 Feb) reflects healthcare marketing play Cello’s (CLL) scarcity value as means of gaining exposure to an attractive US pharmaceutical and biotechnology industry. The company raised £15m at 97p (a modest discount to the prevailing share price) alongside the $5.75m (£4.6m) acquisition of US biotech consultancy Defined Health.SHARES IN DEMANDThe company did not need to raise funds for the deal as it has limited debt on its balance sheet. However, it did so as a way of broadening its investor base and raising funds for further acquisitions which can accelerate growth ambitions across the Atlantic.Cello has two divisions: Cello Health and Cello Signal. Revenue-wise the split is roughly 50:50 but the Health arm delivers significantly better margins and therefore accounted for around 70% of first half operating profit.The marketing group trades on 12.5 times forecast earnings for the current financial year. That’s based on broker Cenkos’ estimates which factor in the impact of the acquisition and the placing of new shares.Cenkos analyst James Fletcher comments: ‘It is expected that revenue synergies will be extracted from the acquisition, as Cello cross-sells Cello Health Consulting services to Defined Health’s customer base and vice versa, as well as the other disciplines of Insight, Communications and Consumer services.’Cello chief executive Mark Scott says future acquisitions, like Defined Healthcare, will be focused on building exposure to US biotech in a market he says remains highly fragmented. building scale Scott reckons the business can win more work from US healthcare businesses in the domestic market where the contracts are typically larger.ACQUISITIONS PLANScott is mindful that acquisitions are capable of destroying value as well as creating value. He says: ‘We’re very cautious. Unless we know the company and people in question quite well we would be reticent (to acquire a business) and we’re not prepared to participate in an auction. We also need to ensure there’s a managerial fit and no client conflict.’The company’s increasing exposure to the US could be translate into a currency boost when it reports full year results on 22 March. There may also be an update on M&A plans alongside these numbers.Shares says: Buy "FinnCap has a price target of 132p implying upside of just over 30% at the current 101p. Progress in boosting its US presence should act as a catalyst for the shares."
Lupo di mare
19 Jan 2017
Today's update Hmm, more non-cash impairment charges and non-headine restructuring charge. Like to see an end to those. On the plus side, PULSAR into profit and do we see some retrieval of VAT from charity jobs?Debt below £5m is nice; although without further details we have to take their word that it's all straightforward.Holding.
forwardloop
23 Sep 2016
info shares mag buy - courtesy of alliance trust newsletterCello tunes in to US healthcareExciting expansion plans across the pond Tom Sieber Marketing firm Cello (CLL:AIM) looks enticing ahead of a push into a lucrative US healthcare market and with the distraction of a VAT dispute out of the way. At 107p, the £90 million cap trades on a 2016 price-to-earnings ratio of 12.9 which is a discount to fellow healthcare marketing plays UDG Healthcare (UDG) which trades on a multiple of 25.9 and Huntsworth (HNT) on 14 times forward earnings. A more generous dividend policy, with a commitment by Cello to pay out 40% of earnings, underpins a prospective dividend yield of 3.1%. Cello has two divisions: Cello Health and Cello Signal. Revenue-wise the split is roughly 50:50 but the Health arm delivers significantly better margins and therefore accounted for around 70% of first half operating profit. House broker Cenkos notes the performance of this part of the business, which serves big pharmaceutical companies and small cap biotechs, ‘is based upon multi-year drug delivery cycles rather than consumer sentiment’. It considers the business to be ‘relatively defensive yet high growth’. Chief executive Mark Scott tells Shares the company is looking to build capacity in the US and is considering acquisitions as a way of achieving this goal. There have been problems with the consumer side of its Health business. Scott concedes the company got over-exposed to the consumer goods healthy living space and says it will ‘stick to the pharmaceutical knitting’ in the future. Although action has been taken to reduce the cost base to match lower demand the problems will have an impact on margins near-term. The Signal business focuses on digital communications and social media for charities and a number of blue chip clients. It is emerging from the distraction of a VAT dispute which was settled through a £5.3 million payment to HMRC in May. Scott is excited by the potential of its proprietary social media intelligence tool Pulsar. The venture is now profitable, has 240 clients on a licence basis and is generating renewal rates of around 60%. Buoyed by its success, the company plans to launch the product in the US in 2017 and recently introduced a version for the healthcare side of the business. Scott cites this as an example of how the Health and Signal businesses complement each other, noting the company has historically faced pressure to separate the two divisions partly because the ‘healthcare business is easier to value’. Shares says BUY : "At 107p the valuation looks undemanding as Cello targets an attractive niche."
Lupo di mare
14 Sep 2016
Interims No great shakes. A lot of talk but don't expect a great leap forward this year, as "expectations will be broadly achieved", with UK problems holding back the group. That was described as "cessation of contracts" - one way of putting it. Yes, there's been an Interim divi hike, but a lot depends on the full year headline eps.At least we're assured that the HMRC issue has now been fully resolved. Would be nice if they could get some of that VAT back from their charity clients - without souring relations.
Lupo di mare
05 Sep 2016
Re: What ..... Yes, could well be someone sniffing around. The talk at the agm of increasing the payout ratio was, presumably, intended to boost the sp and make the co less vulnerable.Worth hanging on to for an each-way bet then, eh.Nine days to go.
patehan
05 Sep 2016
What ..... I did read a couple of weeks ago (give or take a few) that Cello may be a take-over target?
Lupo di mare
05 Sep 2016
Re: What ..... No idea at all, patehan. Results due on the14th., and maybe some careless buying ahead of that, unless they're getting a few bob back from their charity customers. Not particularly big volume. I'm not getting excited, m8.Btw, one doesn't like to brag, but I've been invested since it was 31p - ahem.
patehan
05 Sep 2016
What ..... What's just happened today?I bought in to this company at 60p. I read an article a year later. In this article Hargreaves (Miles) was asked which share he would buy and keep for over 5years. He stated Cello. It's just started to look brighter for Cello...Keep going....
Lupo di mare
16 May 2016
Re: Question ?? So now we're being stung for a total of £5.3m - up from £3.2 - but "before tax relief". So they get tax relief on the VAT that they owe HMRC. My brain's hurting.They now say that, "Following consultation with HMRC, The Group is comfortable that the business will be compliant with this new guidance going forward." That statement is not good enough, actually - either the Group is compliant or it's not. Have they employed tax consultants?Complex the matter might be; although the HMRC don't seem to see it quite like that, as they're saying that it's all quite clear and there's no room for interpretation.Next issue is recovery from clients, and good luck with that. As Cello is giving shareholders zero guidance on the matter, I'd say that we're going to get zero back, and the issue will be allowed to disappear from company reports.
mcescher
28 Mar 2016
Good analysis report on CLL Looking like a solid dividend payer [link]
Lupo di mare
23 Mar 2016
Re: Question ?? Just in case anyone's missed the 16.21 announcement today, here it is:-"Cello Group plc provides the following update regarding the ongoing dispute with HMRC regarding zero rating of certain supplies to charities clients by a subsidiary of Cello Signal. In December 2015, following extensive dialogue with HMRC, the Group made an offer of settlement to HMRC of £2.4m to resolve the retrospective position. Further detailed information was also provided to HMRC in January 2016. The offer was made following complex consultation with specialist advisors, and it was considered to fully satisfy the concerns that had been raised by HMRC. Accordingly, the provision of £3.2m made in the accounts for the year ended 31 December 2015 which were announced on 17 March 2016 was appropriate. This provision also included an estimate for penalties and interest, but it assumed no contractual recovery of VAT from clients. On the afternoon of 21 March 2016, Cello can confirm it received a letter from HMRC which disappointingly rejected the settlement offer made by the Group. Since receipt of this letter the Group has been in discussions with its specialist advisors to understand its impact on the dispute. Discussions with HMRC also remain ongoing. The Board will continue to assess and review its provision and will continue to update shareholders as the position regarding the dispute becomes clearer."
Lupo di mare
23 Mar 2016
Re: Question ?? Downloaded the statement from last year's Final Report, but couldn't download (nor find!) the Interim Report statement. Here's what they had to say last year, and as we know that figure increased in the Interims."During the year, one of the Group’s subsidiaries, Brightsource, was subject to a routine VAT inspection by HMRC. As part of this inspection, it was determined that Brightsource had inadvertently and in good faith, zero rated certain supplies which it believed were ancillary to wider zero rated supplies and Brightsource had therefore incorrectly not charged VAT on those supplies to its charity clients. A provision of £2.1m relating to uncharged VAT on these supplies, together with an estimate of interest and penalties, has been made at 31 December 2014 (note 21). On 6 February 2015, Brightsource received further correspondence from HMRC informing them that the scope of their review would be extended to include a wider range of supplies to its charity clients, potentially generating a larger liability on one particular type of supply. Subsequently, an agreement in principle was reached with HMRC, removing this potential larger liability and restricting the required provision to the zero rated supplies initially queried. The provision recognised reflects this agreement in principle. Other types of supply remain under query and discussions and negotiations are still ongoing with HMRC on these less material supplies. The Boards of Brightsource and the Group continue to believe, with the support of its advisors and industry bodies, that these further discussions are unlikely to result in further material liabilities in future years. Any further liability claimed by HMRC will be defended robustly. The Board believes that the maximum contingent liability that could be claimed by HMRC in relation to these other supplies is £0.8m."
Lupo di mare
23 Mar 2016
Re: Question ?? HMRC today rejected Cello's tax offer. Trying to find out just what that might mean - so are they, apparently. Couldn't download a full report from their website.
