viewNext Fifteen Communications Group PLC

Recent acquisitions and big client wins boost Next Fifteen's top and bottom lines in first half

Overall, Next 15 saw revenues grow 16% to £93.5mln in the six months ended 31 July (H1 2016: £80.5mln), while adjusted pre-tax profits rose by 13% to £12mln (H1 2016: £10.6mln)

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Next 15's management is confident of hitting full-year targets after a "strong" start to second half trading

Fast-expanding digital communications group Next Fifteen Communications Group Plc (LON:NFC) has hailed the performance of its recent acquisitions as it notched up another period of double-digit revenue growth.

Back in July, Next 15 snapped up B2B content marketing agency Velocity and B2B market research consultancy Circle, while earlier this month, it acquired Elvis – an integrated digital agency.

WATCH: Another period of double-digit revenue growth for Next Fifteen

There was also news of another acquisition today, with market research specialist Charterhouse joining the ranks (more on that below).

Revenues boosted by important client wins as well

It wasn’t just the new businesses that drove the top line though, Next 15 also secured several big client wins with the likes of electronics giant LG and online food ordering platform GrubHub.

Overall, Next 15 saw revenues grow 16% to £93.5mln in the six months ended 31 July (H1 2016: £80.5mln), while adjusted pre-tax profits rose by 13% to £12mln (H1 2016: £10.6mln).

Because of the various acquisitions, net debt increased to £20.8mln (H1 2016: £12.2mln) although Next 15 is confident it will be below £15mln by the year end unless it decides to make more purchases.

Management confident

As for the dividend, that was hiked by 20% to 1.8p, which management said was a reflection of its “confidence in the group’s performance” for the year as a whole.

“The group has continued to invest in agile companies operating in this augmented value chain and in the first half, group revenue grew by 16%,” said chairman Richard Eyre in a statement.

“The addition of several businesses to the Group has been matched by some important client wins including LG Electronics, GrubHub, Marvell and NTT Data.”

Good start to second half trading

The strong performance looks to have rolled over into the second half as well, with Next 15 saying it has been “encouraged” by trading so far.

In fact, for August and the first few weeks of September, it has seen “high single digit” organic revenue growth.

“The prospects for the second half remain good. As a result, the board remains optimistic about the outlook for the group and is confident that it will meet its expectations for the full year.”

Latest acquisition unveiled

Alongside the results, Next 15 also confirmed its latest addition to the group: Charterhouse Research Limited.

Next 15, through its MIG Global Limited data and insights subsidiary, will pay £2.75mln upfront for the market research consultancy, plus possible performance-related milestone payments further down the line.

Of that initial consideration, £2.58mln will be paid in cash with the balance satisfied through the issue of new NFC shares.

The acquisition is expected to be “marginally earnings enhancing” in the current year.

READ: Next Fifteen Communications Group boss hails 'exceptional' US performance

For the year ended 31 August 2016, Charterhouse reported turnover of £2.69mln, adjusted profit before tax of £0.59mln and net assets of £0.78mln.

“Next 15 is committed to building a deep data and insight capability at its core. Charterhouse is an important step in that strategy, significantly enhancing our financial services offering,” said Next 15 chief executive Tim Dyson.

“The combination of MIG’s technology driven consultancy and data offering with Charterhouse, a leading specialist in financial market research, will help drive deeper and more actionable insights to the financial services industry.”

Quick facts: Next Fifteen Communications Group PLC

Price: 460 GBX

Market: LSE
Market Cap: £417.13 m

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