CLL.L Share News (CLL)

A placing of 5.3m shares at 52.5p, well below the prevailing market price, to help fund an acquisition overshadowed a decent set of full year results from market research and consulting group Cello.The company, which is raising around £2.8m through the placing, is paying $5.5m cash plus 5.8m Cello shares for MedErgy HealthGroup, a healthcare communications consulting company based in Pennsylvania, USA. Cello's chief executive officer, Mark Scott, sounded fairly sanguine about the sharp fall in the share price that accompanied the acquisition announcement and the release of full year results for 2010."It's obviously due to the share placing rather than the deal we have announced," Scott told Sharecast. "It's a very good deal. It boosts our presence in the pharmaceutical market, and it's a very complementary fit," he added. "The business is doing so well, we had to buy it now or we might not have been able to afford it next year," he quipped.Aside from beefing up the company's presence in the USA, MedErgy's expertise on the pre-launch side of the drugs development business will fit in well with Cello's, which is stronger on the post-launch side.Key services provided by MedErgy include strategic consultancy, scientific communications, and medical education and clinician learning.The two companies share some clients, Scott revealed, but there are plenty of cross-selling opportunities. "MedErgy will accelerate Cello's expansion in healthcare research and communications and increase our exposure to international client briefs," Scott said. It's an area where Cello is keen to grow. "High margin, high barriers to entry, it's hard to think of a better business to be in, to be honest," Scott claimed.For the year ended 31 December 2010, MedErgy recorded net revenues of $9.0m and profits before tax of $2.3m. As at 31 December 2010, MedErgy had gross assets of $6.0m, and no debt.Turning to the company's results for 2010, Scott said business is more or less back to normal levels now after the trials and tribulations experienced in the final two or three years of the first decade of the new millennium.Revenue was stable at £125.0m, compared to £123.7m in 2009, and the company returned firmly to the black with a profit before tax of £4.93m, versus a loss of £5.75m the year before.Headline operating profit was up 21% to £7.3m from £6.0m, while like for like gross profit edged up 1% to £60.3m from £59.7m. Research and Consulting was the engine of growth with like for like gross profit growing 3.6% from a year earlier.The final quarter showed continued improving commitment to spend by clients in the group's core areas of expertise, the company said.Net debt was reduced to £8.8m from £11.5m at the end of 2010. "One of the key things we are really pleased about is we have reduced our dependence on public sector spending. Two years ago it accounted for 20% of our revenue, this is now down to 6%," Scott said.A final dividend of 0.905p has been proposed, taking the full year payment up to 1.43p, a 10% increase on 2009's payment.