Cello shares off key as pre-tax profits halved

16th Sep 2015 10:06

(ShareCast News) - Shares in healthcare marketing company Cello Group plunged as interim pre-tax profits halved on the back of an ongoing tax dispute with the UK government and an expansion of its US activities.Pre-tax profits at the media advisory firm slumped to £1.7m in the six months to 30 June on revenues of £77m compared with £78.3m last time. Administrative expenses rose to £40m from £35.8m.Cello made a £1.1m provision in relation to a dispute with the taxman over the way one of its divisions charged VAT to charity sector clients.The company added that other industry-wide issues have been informally raised by Revenue and Customs (HMRC) that "contradict their recent policy guidance"."If these issues are eventually upheld by HMRC Policy, then the group and its advisors will vigorously contest them," Cello said in a statement.The interim dividend is 0.84p, up from 0.80p.Chief executive Mark Scott said the company's progress as an advisor to the pharmaceutical and biotech industry is "progressing at a rapid pace".He said this was being driven by continuing strong growth from the core healthcare business, most notably in the US.Shares in Cello were down 8% to 85.5p at 1101 BST.