Cello lowers expectations as public sector cuts bite

A SIGNIFICANT decline in public sector spending on last year, particularly in Scotland, was felt by communications and marketing group Cello.

The company, which owns the Leith Agency and Stripe Communications, noted that there had been a pick-up in business following the recent Scottish elections, although at a reduced level.

In a trading update, the company said it had traded solidly in line with the board's expectations for the first six months, with more than 5 per cent growth in headline profits before tax. The research and consulting division has continued to show good like-for-like revenue growth.

But the group has shed staff following the loss of a large retail research contract and a second smaller retail client entering administration.

The board expects a full-year exceptional charge of approximately 500,000 and says full-year headline profits before tax will be slightly lower than previous expectations.