Next Fifteen makes solid progress in pandemic year

Next Fifteen Communications reported 7% growth in group net revenue in its final results on Tuesday, to £266.9m, with statutory revenue rising 8%, aided by acquisitions.

The AIM-traded digital communications company said its adjusted profit before tax was ahead 22% at £49.1m in the year ended 31 January, while adjusted diluted earnings per share improved 17% to 40.7p.

Net cash generated from operations increased 47% to £72.9m.

The board said the company had a “strong” balance sheet, with net cash of £14.0m at year-end, swinging from net debt of £9.3m a year earlier.

During the year, Next Fifteen said it received expanded briefs from a number of clients, including Salesforce, IBM and Amazon.

It made the “material step” into innovation consulting through the acquisition of Mach49 in August, and of CRE in July, which the board said brought a digital optimisation skillset into the group, with both purchases being earnings accretive in the year.

Following a review of its property portfolio in the light of plans to operate more flexible home working, a £10m property impairment charge was booked due to surplus office space, resulting in a statutory loss before tax of £1.3m.

That should yield around £5m in annualised savings, however.

The directors announced the reinstatement of their dividend policy, with a final dividend proposed for the year of 7p per ordinary share.

Next Fifteen also made a post-year end commitment to repay the government furlough support received in 2020.

Looking at its current trading, the company said it made a “strong start” to the new financial year, and was currently trading ahead of management expectations.

It recently announced the acquisition of Shopper Media Group, which specialises in commerce marketing activation at the point of purchase both online and in-store.

“Looking to the year ahead, the board is optimistic about the prospects for the group, despite the continued impact of Covid-19 on the economy,” said chairman Penny Ladkin-Brand.

“Covid-19 tested our business model but it also tested the character of the team that leads Next Fifteen and the people that work for the group across the world.”

Ladkin-Brand said the board remained confident of the group’s underlying prospects.

“We believe we have the quality of people, the strategy and the financial strength to continue to outperform our marketplace.”

At 0927 BST, shares in Next Fifteen Communications Group were up 2.52% at 799.68p.