Cello sounds flat as it issues profit warning

Published on Friday 3 July 2009 21:26

CELLO, the advertising and market research company which owns the Leith Agency, issued a profits warning yesterday after a fall in demand.

The London-based company said appetite for qualitative research in the UK, as well as human resources research and training was lower.

Business was better in its direct marketing business Tangible, which includes advertising group Leith and Edinburgh marketing firm Navigator.

Cello said the unit had won a number of new pieces of business in the public sector, which has been resilient during the recession.

Tangible has also renewed its largest charity account, while the main financial services accounts had proved to be "resilient".

Aim-listed Cello said overall it expected gross profits in the six months to 30 June to be 10 per cent lower than last year, and it expected to write down the book value of some of its businesses.

In response to falling demand, professional costs had been cut by 7 per cent.

Cello shares dropped 14.7 per cent to 32p.