Next 15 trades in line, expects some US tax reform benefits

Digital communications group Next 15 updated the market on its trading on Monday, ahead of its results for the year to 31 January, which are due to be announced in early April.

The AIM-traded firm said it anticipated that the results would be in line with the board's own expectations, with the group set to make further good progress in the year ahead.

It said it had seen an improvement in organic revenue growth in the second half of the financial year, with organic revenue growth compared with the second half of last year expected to be in the high single digits.

That came off the back of the expansion of existing clients such as Samsung, and the addition of Slack and Nike as significant new customers.

The group added that it had continued to invest in the transition to digital marketing products and services, and had made a series of acquisitions including digital creative and content agencies such as Elvis, Brandwidth and Velocity, as well as data and research businesses, Circle and Charterhouse and the opening of an office for Publitek in the US.

It also took an investment stake in OnePulse - a low cost, high speed market research tool which it said was expanding rapidly.

Next 15’s balance sheet remained in “good health”, the board said, with net debt better than anticipated at approximately £12m as at 31 January.

Given roughly 60% of the group's revenues and profits come from the US, the company said it had experienced some adverse impact from the recent weakness in the dollar, but also expected the recent changes to US tax law to have a long-term favourable impact on its earnings.

However, it warned that the full impact remained unclear as the Internal Revenue Service was still detailing its revised guidelines.

The board said it was anticipating a small one-off non-cash charge relating to deferred tax, but it also expected a small improvement in the ongoing tax rate.

“The group continues to focus on data, content and technology,” said chairman Richard Eyre.

“We are pleased that data and analytics are increasingly embedded across the group; we believe that over time this will drive growth in our technology and content businesses as customers' marketing activities increasingly utilise these tools to predict campaign success and spend levels.”