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I don't think anyone has noticed it period.
chinese and saudis not noticed this one yet?
yes, agree, seems plausible that it could take years rather than months to resolve. but i am choosing to ignore the issue as marginal to overall health/growth for cll. (which may be horribly, expensively complacent, but done ok so far, phew)
not sure if its a good example but I was looking again at Powerflute (POWR) on my watchlist (but now ditched), they've had an unresolved vat issue with the Finnish tax authorties for over 3 years, didn't prevent their sp taking off, but might give an indication of how long these issues can take to resolve
...21st July. http://www.cellogroup.com/investor-relations/financial-calendar/
zzzzz
.
Perhaps it's in anticipation of a trading update that must be due soon, not that Cello have updated recently with a date
is there some news leaking re the VAT issue? -- or perhaps just good price action from a chunky buy yet to show after hours? i like this share, but it's hard to get visibility on the s/t moves.
sorry, missing para: One concern may be that operating profit fell in Cello's signal division in 2014. But that reflected an exceptionally strong performance in 2013 due to a one-off contract, continued investment and a £0.4m operating loss from Pulsar as it began to scale up. Management has also set aside £2.9m to deal with a tax review in its signal division, but if its charity clients succeed in vetoing the new policy it could retain the funds.
but if its charity clients succeed in vetoing the new policy it could retain the funds. CELLO (CLL) ORD PRICE: 95p MARKET VALUE: £81m TOUCH: 94-96p 12-MONTH HIGH: 99p LOW: 83p FORWARD DIVIDEND YIELD: 3.3% FORWARD PE RATIO: 10 NET ASSET VALUE: 82p* NET DEBT: 10% Year to 31 Dec Turnover (£m) Pre-tax profit (£m)** Earnings per share (p)** Dividend per share (p) 2012 65.1 7.0 6.0 2.0 2013 74.7 8.5 7.0 2.3 2014 81.0 9.4 7.9 2.6 2015** 84.9 10.5 8.7 2.9 2016** 87.8 11.1 9.2 3.1 % change +3 +6 +6 +7 Normal market size: 3,000 Matched bargain trading Beta: 0.41 *Includes intangible assets of £74.9m, or 88p a share **N+1 Singer forecasts, adjusted PTP and EPS figures Share tip summary Cello's blue-chip client base, overseas expansion, niche-market focus and acquisitions should support growth for years to come. That doesn't look adequately reflected by the shares' lowly rating. Buy. Last IC view: Buy, 94p, 18 September 2014
Cello Group PLC Thu 11 June 2015 A A A Recommendation type: Value Theron Mohamed Healthcare and technology marketing group Cello (CLL) is supplementing solid organic growth with acquisitions while expanding into US healthcare, biotech and other exciting niche markets. Yet its shares trade at just 11 times forecast earnings for 2015, dropping to 10 times in 2016, and come with a tidy prospective yield. Cello's health division, which accounted for half last year's gross profit but 71 per cent of operating profit, provides highly specialised research and consultancy services to 21 of the 25 largest pharmaceutical companies worldwide. Its niche focus lets it charge a premium for its services - attested to by last year's 21.2 per cent operating margin - and demand is currently benefiting from a recovery in advertising spending among large US pharmaceutical companies. It has signed up Pfizer, Unilever and several other household names in the past year and is targeting the explosive biotech sector through acquisitions and new offices openings in Boston and San Francisco. Management recently integrated the health division's various operations into a single brand and structure. That has raised its international profile and helped its teams win large global contracts. The business has also hired technical health experts and made select acquisitions to broaden the range of services and break into growth markets. For instance, the purchase of iS Healthcare Dynamics has opened up lucrative cross-selling and referral opportunities, while the takeover of Worldwide Promedica has provided a foothold on the west coast of the US along with a bunch of biotech clients. The strategy has led to a surge of new business, including one contract worth at least $7m (£4.6m) in gross profit this year. Cello's signal business, meanwhile, offers social media analysis and other tech-driven marketing tools to the likes of Tesco, Oxfam and L'Oreal. It has prioritised higher-margin digital services, and to this end, acquired Line Digital last year to bolster its programming and technological expertise. This has helped it win larger, digital-focused contracts and improve revenue visibility. Moreover, its social media analysis software tool, Pulsar, grew its licensing client base from 11 to 88 in 2014 and its momentum has remained strong this year. And gross profits from its US offices and digital services soared 28 per cent and 36 per cent respectively. Cello looks well placed to prosper further. It has invested £800,000 in new client offerings and overseas offices in the past two years, which contributed £1.5m in gross profit in 2014 and should underpin future growth. Broker N+1 Singer expects EPS to grow by 10 per cent this year and pencils in a 12 per cent dividend increase. One concern may be that operating profit fell in Cello's signal division in 2014. But that reflected an exceptionally strong performance in 2013 due to a one
on a one - two year view.
Sold out first thing this morning at 90p. Not a huge holding but wanted to sit back and watch from sidelines. Half expected the retrace. It could have been far more. I too may buy back once the dust has settled, funds permitting. Just not enough certainty about the outstanding VAT issues for me to be fully at ease. This is a good company, there just happens to be many others out there too vying for my attention and funds. This remains on my watchlist for a possible re-entry point. Regards CM
from HL: "Results from marketing group Cello Group hit a bum note with investors despite pleasing profits growth, a healthy hike in the dividend and a solid start made to 2015. Shares in the AIM-listed company fell despite chief executive Mark Scott hailing the improvement in fortunes as Cello became established as a "global player" in the pharmaceutical space, as it was the first full year of trading under the unified Cello Health brand. Revenue rose 6.4% to £169.9m in 2014, with gross profit up 8.4% to £81m and headline profit before tax up 9.9% to £9.4m. Headline basic earnings per share climbed 12.3% to 8.14p and despite operating cash flow more than halving to £4.8m - reflecting excessive cash conversion the year before - the dividend was lifted 15.6% to 2.6p. Scott said the new unified operating structure had a strong positive impact on the ability to compete for and win large integrated contracts on a global scale, which underpinned Cello's ability to continue its rapid expansion in the core US market. "The new year has started well, with good income visibility and solid momentum from the end of 2014," he added. Broker N+1 Singer noted that the HMRC VAT review of the charity clients of Cello Signal, the non-health business, looked to be better than analysts had assumed, with a lower cash cost, and the business was now trading normally after some disruption. "The trading outlook is bright and Cello is continuing to progress the development of both units, Health through a planned expansion of consultancy activity and Signal through better solutions."
couple of massive buys late this morning, director buys ?
Thanks I didn't see that.
I think the point is being missed here, they've quite sensibly set aside an amount for vat liability of £2.1m and might be able to reclaim some of this back in a best case scenario if it is charged, and if it is charged there is no further hit to the accounts and a release to the bottom line if its improved. Its been provided for, and moving on at the end of the day we are a health company whose underlying profit has increased 20% this year with a year on year dividend increase, against a previous year that they envisaged would be tough to beat I sold half of my holdings at 93p yesterday (the same ones that I bought at 80p in the last fall), as I envisaged a bit of panic selling, I'll buy these back when the dust settles
They did within Contingent Liabilities - "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".
Folks. bit disappointed Cello have not been more forthcoming on VAT. The Qs I have are around 1. How far back does this VAT issue go or does it relate to a specific period/mix of products sold as that will be a pointer to any future VAT liability. 2. If they now have to add on VAT to charities this will make them appear less competitive as charity may not be able to fully recover themselves. 3. They say other amounts less material but what does that mean in £s overall, they could have given an an indication especially if it was less material. Very subjective. Seen this all before elsewhere - I think they will just try and bleed this one out slowly.
Think it is a one off, but there may be further charges, all be it less "material". Increase in divi may not balance out possible drop in share price today, emphasis on word possible, don't want to panic anyone; nor am I a deramper. Can't see anything to push this much North today since figures were already pretty much known from pre results statement in January; but who knows. Maybe I come out of this today, sit on the sidelines and then reinvest. Good luck CM
should be a one off. am annoyed the issue arose, but pleased to see agreement apparently reached - never good if these things rumble on with the magnitude unknown.
VAT bill of £2.1m cuts into profits here. May I ask the more clued up if this is a one off or will it be a recurring theme? Not long had it on the watch list and waited for results before looking into it further. Company making solid progress by looks of it, organic growth and growth through acquisition
Not sure how this is going to go today re. share price after results. Seeing nothing in there to set the world alight and being hit for £2.1m VAT although this may be recoverable to an extent. Will see how this opens and then make uip my mind. Good luck CM
Due on Thursday. Will be watching extremely closely re. VAT issue. Anything particularly negative I will be out for at least the short term. This may fall back to mid 80s if that is the case. Lets hope for plenty of positives and no negatives. Regards CM