Next 15 FY results to be ‘materially ahead’ of current market views
Next 15 Communications said on Tuesday that full-year results are set to be "materially ahead" of current market expectations as trading in the first half has remained resilient and is well ahead of the management expectations set out in March.
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For the six months to the end of July, revenues are expected to have risen 6.5% from the same period a year ago to £126m, while adjusted pre-tax profit is expected to have pushed up 16% to at least £20m.
This has resulted in an improved overall operating profit margin of more than 16%, up from 14.7% last year.
Next 15 put the strong performance down to its B2B technology focused agencies, such as Activate and Agent3, and more resilient trading than expected in its brand marketing and creative technology divisions.
The overall organic decline in revenues for the period was around 6%, though it was less severe in the US where organic revenues fell by just 2.5%. The company said client budget declines were mostly related to those industry sectors most affected by Covid-19, whereas sectors such as technology and the digital services it provides have seen increases over previously budgeted spend.
"Whilst the group remains cautiously optimistic about trading as we enter the second half of our financial year in what is still a highly uncertain general economic environment, we currently expect results for the year to be materially ahead of current market expectations.
"We will continue to tightly manage our cost base and conserve cash."
Next 15 said it’s highly cash generative and has a strong balance sheet, with net debt as at 20 August, after recent acquisition related payments, of less than £1m.
The company also said it was reviewing the exact timing of a resumption of dividend payments and expects to update shareholders at the time of its interim results next month.
At 0810 BST, the shares were up 15.7% at 426.90p.