StockMarketWire.com - Cello 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.

As previously announced, the group made a payment of £0.9m to the previous employer of a team of senior consultants which has established CelloHealth Bioconsulting in the US.

This business is starting to gain good revenue traction as a result of this investment which has enabled the key executives to operate free of legal restriction.

Also, as previously announced, following the final settlement reached with HMRC regarding the long standing VAT dispute, there will be a charge of £2.1m in the accounts for the first six months of the year.

The full provision of £5.3m has been settled in full in July 2016. Discussions are ongoing with clients regarding recovery of these balances.

In order to further improve the margin in Cello Signal and reduce costs in the consumer consulting unit of Cello Health, a number of further cost saving measures have been implemented. As a consequence, there is a non-headline redundancy charge of £0.6m in 2016.

The board is actively reviewing its dividend policy, with a view to increasing the payout ratio.

A further update will be given with the interim results.

OUTLOOK

The group 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.



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